Howard Schrott won’t be handing Butler University President Bobby Fong an oversized check for the gift that put his name on the school’s first major performing-arts venue since Clowes Memorial Hall opened in 1963.
Instead, Schrott’s $6.5 million will go to Butler through a package of financial-planning tools, which allowed the former Emmis Communications CFO to give more than he thought possible.
Though Schrott’s gift isn’t the largest in Butler’s history, he hopes it is repeated among his peers.
“Maybe what it will do is convince people, ‘There’s a creative solution out there for me that will allow me to do something significant,’” said Schrott, a 56-year-old Butler alum and trustee who serves as president of San Francisco-based Schrott Consulting.
Butler announced in late January that its new 460-seat theater will be called The Schrott Center. Ground breaking for the $13 million building, east of Clowes Hall, is planned for this spring, and it’s expected to open in the fall of 2012. The Schrott Center will be the primary venue for Butler’s theater, ballet and School of Music performances.
Most pronouncements about naming gifts gloss over details, but Schrott is eager to talk about the anatomy of his donation. Schrott will provide the $6.5 million—and possibly more—through a charitable trust and a life insurance policy. Both are common tools for estate planning, but Schrott and Butler’s gift officers worked out a mechanism that also provides the university with ongoing gifts.
Schrott will use the income from a charitable remainder unitrust, which has Butler as the trustee, to make an annual cash gift. Some of that cash will pay the premium on a life insurance policy, which Butler owns. The rest will go toward the university’s ongoing needs.
Schrott declined to say exactly how much Butler will receive each year in cash, but Major Gift Officer Beatrice Cork said he put enough “skin in the game” to meet the university’s standard for naming buildings.
“That was the most uncomfortable part,” Cork said. “We had to show him how he could make an impact now without impacting his lifestyle now.”
Schrott served as Emmis’ CFO from 1991 to 1999. He was serving as CFO of South Carolina-based Liberty Corp. in 2006 when Alabama-based Raycom Media bought it for $987 million. Schrott had shares in Liberty, owner of 15 TV stations, worth more than $6 million.
“Butler has always been the focal point of my charitable giving,” Schrott said.
A native of Alexandria, Va., Schrott came to Butler in 1972 because of its broadcasting program.
“I had had a burning desire to be in the broadcast business since I was 11 years old,” Schrott said. “The radio-TV department was a little like its own fraternity. Everybody that was there was so interested in the business. We all had so much fun.”
Schrott has endowed a media-arts lecture series, supported the control room in the Richard M. Fairbanks Center for Communication and Technology, and made Butler the beneficiary of his estate, after his wife, Anne Martin.
He already was a member of the Cornerstone Society for lifetime gifts of $1 million or more when he contacted Cork last spring.
“I just woke up one morning and said, ‘I really want to do something that’s going to make a difference.’”
With faithful alumni like Schrott, colleges and universities make fund-raising look easy. Universities were on the receiving end of eight of the 10 largest gifts of 2010, as reported by the Chronicle of Philanthropy.
“The truth is that giving to education slipped 5 percent last year, the worst in 20 years. That’s really not all that much,” said Donald Fellows, president and CEO of Marts & Lundy, a New Jersey consulting firm.
But Cork and Kate Brinkerhoff, director of gift planning, know that it took nearly a year of back-and-forth with Schrott to arrive at the $6.5 million. That would be a small sum to Indiana University, which raised $342.8 million in the 2010 fiscal year, but it equates to more than half the total raised by Butler in the same period.
Uncertainty about future stock and real estate values has turned more donors toward planned giving, Fellows said. Schrott’s hybrid gift might end up being a rare case, as most donors like to keep things straightforward, Fellows said.
“The more complex a gift gets, people are less likely to do it,” he said.•