LOUISVILLE, Ky. (WDRB) – Today’s University of Louisville Foundation is “unrecognizable” from the free-spending, opaque organization that existed under former U of L President James Ramsey.
That was the message the foundation’s interim executive director, Keith Sherman, had for a downtown audience at the Louisville Rotary Club on Thursday.
Sherman laid out more than a dozen reforms the organization and its new board of directors have implemented in the year since Ramsey resigned, including prohibiting any future president of U of L from leading the foundation, cutting a deferred compensation plan that cost the foundation more than $20 million and slashing spending from the university’s endowment.
“It is not the same foundation it was a year ago,” Sherman said. “It’s just not.”
The foundation is a charitable organization that is legally separate from U of L and exists soley to support the university.
Sherman, who has a law degree and formerly ran labor relations for the national Red Cross, was hired as the foundation’s first interim executive director in December.
Ramsey and his former chief of staff Kathleen Smith effectively ran the foundation. Ramsey served as its president, along with his role at the university proper, for 14 years.
Sherman told the Rotary audience that he has never met the “previous leadership” of the foundation and that he could not pass judgment on their performance.
At the same time, Sherman the university’s endowment – which the foundation manages – would likely be worth more $1 billion today, instead of $726 million, had the organization shown more fiscal discipline during the last decade.
“We spent at an unsustainable rate. That’s not an opinion, it’s a fact,” Sherman said.
A forensic investigation commissioned by the university found that Ramsey’s administration depleted the endowment with $42 million in excessive and unbudgeted expenses, plus overstated the fund’s value by up to $72 million through internal loans.
Since the report was released in June, the university and foundation boards have had dozens of closed-door discussions about litigation – either against former officers and board of members of the foundation or against the organization itself, which maintains insurance coverage on fraudulent actions.
Sherman said Thursday that no decisions have been made and whatever the foundation does, “ we will protect our interests.”
Sherman said now that all the reforms of the organization are in place, “The hard part is going to be making sure we don’t get lax again, and we adhere to all of these new things with rigor.”
Here is the foundation's list of its reforms in the past year: