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Moritz Family Fights Ohio State Over Using Endowment For Fundraising

Moritz College of Law

The family of an Ohio State University alumnus who endowed over $30 million to the school is fighting to keep the school from draining the money for fundraising purposes.

Attorney and Ohio State alumnus Michael Moritz donated $30 million to the university in 2001 to endow four faculty chairs and give 30 annual scholarships to needy law students, The Columbus Dispatch has reported. The gift made months before Moritz died was the largest gift to one of the school's academic units, and Ohio State renamed its law college in honor of Moritz.

The Moritz family now contends the university is illegally draining millions in "development fees" and threatening the endowment's survival, according to the newspaper. Michael's son Jeff Moritz has said the money should go to scholarships and not to help court more donors.

The endowment also was being used for only 12 to 16 full scholarships annually instead of the 30 grants mandated in the gift agreement, according to Jeff Moritz.

"My dad's legacy and what he wanted to do for the law school is evaporating. I find it sickening," Moritz said. "We want the money to go to scholarships, to do great things at the university — not to be spent flying around the country talking to wealthy donors."

The withdrawal of development fees was legally enacted by university trustees, according to Ohio State.

University spokesman Chris Davey said the gift agreement doesn't refer to a development fee, but said that's of "no consequence."

"Development fees are entirely lawful and recognized by Ohio law as a 'prudent' cost associated with managing an endowment," Davey said.

Trustees approved taking development fees from endowment principals in 2000, and such fees are a "respected and widespread practice among universities and charitable institutions" as a way to raise more endowment money, Davey said.

In 2017, Jeff Moritz filed an action in probate court in Delaware County, where his parents lived when his father died. It sought to reopen his father's estate and gain legal standing to challenge OSU.

Lawyers for Ohio State and the office of Attorney General Mike DeWine opposed the move, arguing that only DeWine's office has authority to enforce the terms of charitable trusts. A magistrate ruled Moritz's request was "arbitrary and unconscionable," finding he had no standing to intervene and enforce the terms of a gift provided by Michael Moritz prior to his death. That ruling is being appealed to the probate court judge.

The Moritzes lawyer, David Marburger, says they are spending their time, money and emotional energy to get Ohio State officials to "just live up to the agreement they signed.