University of Southern California

Three Major Donations Kick off USC Marshall Trust Program
IRS Ruling Opens New Shared-Investment Opportunity
December 19, 2007 • by News at Marshall

December 19, 2007 -- The USC Marshall School of Business has received more than $5 million in three contributions through a newly approved type of charitable remainder trust that gives donors the likelihood of much better investment returns while they support the school.

While many universities offer charitable remainder trusts, the University of Southern California's new program is one of very few that allows trust principal to be invested in the university's endowment. Traditional remainder trusts don't allow such investments in a university's endowment.

The USC endowment has consistently realized much higher returns than most private investors, an average of more than 12 percent per year over the past two decades. While much of the endowment is invested in traditional securities such as stocks and bonds, greater diversification is achieved through investments in private equity, real estate and emerging markets.

A recent IRS private-letter ruling authorized USC's modified program after a substantive review process.

The new trusts provide attractive payouts to donors, with growth in future payouts dependent on the performance of the overall endowment. Each trust's entire remainder value ultimately will revert to USC's endowment.

"This new program, thanks to the IRS ruling, allows our donors to show their strong support now for USC Marshall and the university, while receiving income with the likelihood of a much higher return during their lifetimes," said Courtney Surls, USC Marshall senior associate dean for external relations.

"It's a wonderful win-win for everyone, and we're delighted that some of our savviest, most prominent backers are using this as a way to endorse USC Marshall's strong new direction under Dean Jim Ellis," said Surls.

The contributions were made by:

  • Elaine and Kenneth Leventhal, naming donors of the USC Leventhal School of Accounting, which is part of USC Marshall. They have contributed another $3 million toward their $25 million naming pledge;
  • Dr. Robert R. Dockson, former USC Marshall dean and former chairman of California Federal Savings & Loan Association, contributed more than $1 million;
  • Steve and Maggie Judson, whose donated interest in a property is expected to generate more than $1 million when it is sold.

USC Marshall's three gifts are among the first under the new charitable remainder trust program. The USC College of Letters, Arts & Sciences recently announced a similar arrangement with Dr. Jerry Buss.

About the USC Marshall School of Business
Consistently ranked among the nation's premier schools, USC Marshall is internationally recognized for its emphasis on entrepreneurship and innovation, social responsibility and path-breaking research. Located in the heart of Los Angeles, one of the world's leading business centers and the U.S. gateway to the Pacific Rim, Marshall offers its 5,700-plus undergraduate and graduate students a unique world view and impressive global experiential opportunities. With an alumni community spanning 123 countries, USC Marshall students join a worldwide community of thought leaders who are redefining the way business works.