In this investigative monologue, the speaker examines Chatham University's recent financial maneuvers, highlighting a series of unusually large endowment draws that appear unsustainable. Starting with a $93 million endowment in FY2022‑23, the university took a one‑time $15 million extra draw, followed by an $8 million draw the next year—amounts representing roughly 19% and 11% of the endowment respectively. The speaker notes that the university had only $2 million in unrestricted assets, prompting a donor to release $6 million of restricted funds to cover the shortfall, and suggests possible reclassification of donor‑restricted money to unrestricted without clear board documentation. The investigation then uncovers a governance red flag: a board member who owns Parkhurst Food Service, the university’s largest vendor, also extended a $3.5 million line of credit to the university while holding $3.2 million in vendor contracts. The speaker argues this dual role creates a clear conflict of interest and should be prohibited, emphasizing that such practices are atypical and risky for higher‑education institutions.
Chapters
draw, and I actually stumbled on, uh, this is Chatham. I actually stumbled on something that was really interesting. So here's a really massive draw. So they have a $93 million endowment starting in 2022 fiscal year '23, and they, they have a normal draw here of $4.3 million, but they took this one-time extra draw of almost $15 million. So really they took what, like $19 million off of a $93 million endowment? That's a huge, huge draw, unsustainable. So So they start out the next year at $79 million and they take an $8 million draw on a $79 million endowment. Again, way too high. It's like 11%. Yeah. And then 5%. Okay. So they also were able to convince this donor to release $6 million to get over here. So, so the reason, the reason they had to do this, you can see really clearly, they only had $2 million left in unrestricted endowment assets. So there's no way you can draw $8.5 million. Unless you have a miracle year in terms of returns. So they had to basically approach a donor to get some of this money released so they could do this draw. You can't just draw the restricted money. At least there's laws restricting how much you can pull out of here. It also looks like the, the board moved some money from restricted to unrestricted, and that's interesting. There's no way to know if they move those funds from designated to unrestricted. There's no way to know, right? There's no way to know. Uh, I guess in the board minutes you wouldn't know. Is that what you're talking about? Um, uh, so there must have been— honestly, because so this is donor-restricted money, not board-restricted. So all of the like quasi-endowment stuff will be unrestricted. So there might have been some other negotiation here to get this unrestricted. I'm not sure what that would have been all about, to be honest. But, but they, they, this is well documented, this transfer of $6 million. I'll show you that. And I kind of stumbled on something else that may actually be even more important when I was investigating what happened here. So this is the— okay, okay. So there's like board members that are doing this. Okay, so this is interesting. So I found this So they had a board member who was the donor approve the release from the endowment of $6 million. Okay, so that's that money we just talked about. But then I was curious, I was looking at these others and I noticed this line. There's also a board member that owns an entity that has a $3.5 million line of credit with the university. So at first I was thinking this must be a bank. That's giving a line of credit to the university that's owned by a board member, which is a huge red flag for me personally. In my opinion, this should never happen. Turns out it's not a bank. This is the owner of Parkhurst Food Service. All right. Which is the university's biggest vendor. They have the $3.2 million draw or dollar contracts. And also giving a line of credit. So it's this loan right here. So Parkhurst is the food service vendor, and then they also issued a line of credit to university. And Parkhurst is owned by one of the board members at Chatham. Very much against this if I worked at this school. There's no reason to do this. Okay. Zero reason to do this. They have 27 other board members. There's no reason to have a board member that is also doing self-contracting to the university. It's completely a conflict of interest, and most schools just would not even deal with this, and I think that they shouldn't deal with this either.
