Brief History of the Texas Christian University Endowment
The finances of TCU in the beginning, as with any start-up operation, were quite precarious. Though enrollment growth was strong from the start, capital requirements and a difficult economy in the first year produced a negative cash flow. Property was secured at Thorp’s Springs (aka Thorp Spring) for the very full value of $9,000, a significant portion of which was a note held by “Old Man (Pleasant) Thorp”and his business partners. Randolph Clark began the Add-Ran Male and Female College at Thorp Spring in the fall of 1873 with 13 students at a tuition rate of $50, finishing the session in June of 1874 with 75.[i] Addison joined for the next term and their father Joseph A. Clark in 1875.
Though the Clarks were land wealthy just as the school began, the Financial Panic of 1873 was a huge setback. The Panic of 1973 was brought about by the failure of a major Wall Street investment bank (Jay Cooke & Co.), but it had profound ramification in Fort Worth Texas. When they began the endeavor at Thorp Spring, The Clark Brothers thought their Fort Worth real estate holdings would eventually cover start-up costs, future equipment and help establish an endowment. But The Panic caused Fort Worth real estate values to plummet, and as it turned out they had bought the Thorp Spring property at the very top of the market. Since all were having hard times, the note holders (Thorp’s partners) agreed to some debt relief in the form of deferred payment of interest. It is not clear that Mr. Thorp was aware of this arrangement. The Clark Brothers were committed educational visionaries with a good reputation and the college gained traction in spite of the economy. Nevertheless, Mr. Thorp either fell on hard times himself or perhaps had second thoughts about the viability of a college as the highest and best use of the Thorp Spring property. In June 1877 Thorp called the note after some testy quarrels with the Clarks’ father Joseph. To discharge the debt the school building was exchanged and the deed cancelled.[ii]
Heading into the 1877-78 session, the college was without a buildings or grounds. To buy property and construct buildings, Addison and Randolph Clark were forced to sell their Fort Worth real estate just as property values were beginning to recover “…at a price just equal to a year’s rent on them in 1873.”[iii] Some valuable properties belonging to Randolph Clark's wife, Ella Blanch Lee Clark, were also sold at less than favorable prices. Without buildings to begin the new session, what five years earlier would have been a corpus for an endowment had to immediately be transferred to buildings and grounds. But the land sales were still not enough to pay for the new building. In 1875 the board leveraged the school’s future with the sale of $500 scholarships. Though these notes helped with the bricks and mortar, they continually drained annual cash flow for years to come. In the next decade the school built a solid reputation and consistent enrollment, but remained on shaky financial footing. “Sessions passed in which the janitor received more money than the president of the college.” [iv]
These hard times in the early days clearly had an impact on the Clarks' ultimate decision to institutionalize what was essentially a family business by transferring the college to the Christian Church in 1889. The quest for an endowed college was a primary driver in this decision. As Randolph wrote in Reminiscences:
If the college was to continue beyond the lives of the present workers it must have an endowment. These might toil till worn out and others might not be found to take their places. It was decided to give the property to a board of trustees for the Church. This was thought to be the surest and quickest way to get the college endowed and firmly established…All assets, visible and invisible, were a free gift to the cause of Christian education…The charter was altered and the name changed to AddRan Christian University…The enrollment the year the transfer was made was 426, representing 82 counties in Texas and six other states. [v]
Clark’s gift of their life’s work in 1889 could be interpreted as TCU’s first endowment gift. In a way it was and a way it wasn’t. The value of the “free gift” was appraised at $43,000 but came with $5,000 in debt.[vi] At the moment of the transfer it was indeed an endowment gift to the Church “brethren”. But because it was a going concern on shaky financial footing, one could say that at the next moment it became a levered institution with negative cash flow and no endowment. An inventory of the University’s property at Thorp Spring in December of 1895 specifically noted “that the school had no endowment.”[vii]
Best laid plans do not necessarily work out as entrepreneurs expect, particularly upon transfer of governance. Though the transfer did help put the college on firmer financial footing initially, fires and an ill-conceived move to Waco (1896) led to “Seven Lean Years” and a 22 year delay in realizing an endowment. [viii]
1908 Chalmers McPhearson was appointed endowment secretary – he was more a Whelan than a Hille. An endowment company was formed, but again it was more of a development office.[ix] Investments were in the form of bank deposits (CD’s).
In March 1910 a fire destroyed the main building in Waco. Fort Worth seized the opportunity and offered the institution a fifty-acre campus and $200,000. In 1911 TCU moved onto its present campus in southwest Fort Worth.
The first direct gift to an endowment, $25,000 from Dr. Lucas Charles Brite II also came in 1911, and in 1914 Brite College of the Bible (renamed Brite Divinity School in 1963) was established. From History of Texas Christian University:
In his rounds of solicitation in 1910 and 1911, Dr. Llewellyn called upon L.C. Brite of Marfa, and Mrs. Brite, both of whom had been baptized by Addison Clark…record a gift of $25,000* to endow a Chair of English Bible in TCU which grew out of this visit…In less than three years the good Doctor had made a contribution which is seldom equaled in a score of years.[x]
The school's fiftieth anniversary in 1923 was marked by a gift that assured its survival: Mrs. Mary Couts Burnett left to TCU the majority of her estate, valued at $3 million*, plus half interest in several thousand acres of ranchland. Particularly when oil production began on the land, the Burnett trust became the heart of the university's endowment. The Mary Couts Burnett Library was completed in 1924, the same year in which the campus was expanded to 187 acres.
James Harrison, Trustee from 1910-1937 was trustee and perhaps first treasurer for the endowment.[xi]
B.M. and Francis Britain are the largest single contributors to the endowment. Their planned gifts totaled nearly $14million. B.M. Britain was a 1921 graduate of TCU.
Investment Committee Chairs:
Mark C. Johnson 2005 – Present
R. Denny Alexander – 2003-2005
Sub-Committee Chairs (Investment Committee was sub-committee of Fiscal Affairs prior to 2003):
G. Malcolm Louden – 1985-2003
Dick Lowe – 1979-1984
Jim Hille
Chief Investment Officer
January 18, 2007
Sources:
Randolph Clark, Reminiscences (Wichita Falls: Lee Clark, 1919).
Colby D. Hall, History of Texas Christian University (Fort Worth: Texas Christian University Press, 1947).
Jerome A. Moore, Texas Christian University: A Hundred Years of History (Fort Worth: Texas Christian University Press, 1974).
The Handbook of Texas Online:
http://www.tsha.utexas.edu/handbook/online/articles/TT/kbt7.html by John Ohendalski
[i] Reminiscences, pp. 42-44
[ii] History of Texas Christian University, p37
[iii] Reminiscences, p.53
[iv] Ibid, p.55
[v] Ibid p.57
[vi] Ibid
[vii] Texas Christian University: A Hundred Years of History, p.31
[viii] History of Texas Christian University, Chapter VIII
[ix] Texas Christian University: A Hundred Years of History, pp. 64-5
[x] History of Texas Christian University, p.103
[xi] Ibid, p.226