The $500 Million Endowment

In early November 2022, McPherson College announced that an anonymous donor had made an extraordinary endowment gift to the school. This record-breaking, potentially $500 million donation is the largest single commitment ever made to a liberal-arts college. This news thrust the small Kansas-based school into the headlines. It is notable in the collector-car community because McPherson offers the only four-year degree in professional automotive restoration.

The McPherson endowment gift is causing a lot of discussions, speculation and excitement within collector-car circles. While the funds are not specifically earmarked for the automotive part of McPherson’s educational activities, the money will nonetheless have a material, positive and lasting impact on the field of automotive restoration and the overall collector-car industry.

Origin story

Founded in 1926, McPherson College is a four-year accredited private college. It has 825 students, with 150 enrolled in the Automotive Restoration Technology Program, which provides graduates with not only a Bachelor of Science but also a sophisticated and comprehensive restoration education.

The program began in 1976 when a local entrepreneur named Gaines H. “Smokey” Billue donated a facility on campus along with modest operating funds. In addition, he gave the school a handful of classic cars from his collection. In 1997, McPherson almost shuttered the Automotive Restoration Technology Program, given its narrow focus and high operating costs. However, Jay Leno stepped up and became a financial backer, joining the program’s National Advisory Board. Leno’s support provided critical funding and his involvement raised awareness of the school and its restoration program.

Incoming students can apply for eight scholarships, which are supported by Leno, Peter Heydon and the Pebble Beach Concours d’Elegance. The program’s board is currently chaired by Paul Russell and includes industry luminaries McKeel Hagerty, Wayne Carini, Tom Cotter and others. From an academic perspective, the program emphasizes rigorous research, comprehensive documentation and a thorough understanding of automotive history. From a technical perspective, it teaches students expertise in specific areas such as welding, paintwork, engine repair, drivetrain, electronics, woodwork, upholstery, trim and final assembly. The Automotive Restoration Technology Program has stated its goal is to compete and win at Pebble Beach.

The gift

The anonymous donor has given McPherson an endowment commitment of up to $500 million, using a unique mechanism called a double-match estate gift. The donor’s approach involves contributing two dollars for every dollar given by others, up to the combined total. Upon the death of the donor (or possibly before), the college receives the two-for-one match, ensuring a transformative impact for generations to come.

Donors can make gifts today in cash or securities, or they can be made via an estate pledge commitment to be paid at an unknown future date. Donors can also gift collector vehicles in their wills today, and the value of the donated car or motorcycle qualifies as a matching gift for this campaign. In an unusual twist, estate gift commitments can be non-binding and revocable — in essence, estate gifts are viewed as an estimate of what a donor wants to do for McPherson in their estate.

The college has until June 30, 2023, to accumulate matching gifts and has already raised over $130 million, putting it within striking distance of its $500 million total combined goal. The anonymous double-match gift is cleverly architected to create awareness of McPherson, build credibility, broaden the donor base and increase estate-plan gifts.

The road to $500 million

Overnight success takes decades. A brief call with McPherson’s Provost and Executive Vice President Amanda Gutierrez revealed the institution’s long-term approach to building excellence. For the past decade, the college has been patient and thoughtful about capital allocation, resource allocation, program planning and an endowment-growth strategy.

“This endowment gift is historic for small, liberal-arts education — for higher education,” said Gutierrez. “It underscores that McPherson College is on the right path. We have a track record of good stewardship, financial stability, balanced budgets and a clear, disciplined vision — all of those things that people who are giving want to see in an institution they support.”

While the $500 million benefits the college at large, the donation still represents a legitimate milestone for the collector-car hobby. McPherson’s automotive programs will significantly benefit, and the endowment gift has already substantially raised the college’s profile both outside of and within the collector-car community.

McPherson’s fundraising had already begun to pay dividends this past year. The Automotive Restoration Technology Program recently received a generous grant from Richard and Melanie Lundquist to create the Paul Russell Library. This donation was followed by the Lundquists’ gift of a 1972 Ferrari 365 GTB/4 Daytona to the school’s growing car collection. The Lundquists also committed $25 million for the college building fund in May 2022.

Looking forward

In the decades ahead, many restoration experts and highly skilled automotive professionals will be retiring. McPherson can play a critical role in ensuring that esoteric and specific restoration techniques are not lost to history. As the automobile evolves into an electric self-driving appliance, maintaining and restoring complicated historically significant internal-combustion-powered cars becomes even more urgent.

“This is a great thing for the future of the collector-car industry, because there is a shortage of young people qualified to work on these cars professionally,” said Cam Luther, a senior at McPherson. “The growth of the program will help to fill this gap. This will be fascinating to watch as an alumnus.” ♦