A depleted legacy
Education | Two Baptist schools say a charitable foundation deprived them of millions
by Laura Edghill
Posted 9/16/20, 05:09 pm
Baylor University and Southwestern Baptist Theological Seminary say they could lose millions of dollars due to alleged misconduct by a charitable foundation established to support the two Texas schools. The institutions on Sept. 8 sued the Harold E. Riley Foundation and President Mike Hughes, claiming the board changed the organization’s bylaws to deprive the schools of money.
Harold E. Riley, the founder of Citizens Inc. insurance company, set up the foundation in 2002 to establish an annual funding stream to the two Baptist institutions. Riley funded the foundation, which essentially acts as a charitable trust, with shares of Citizens stock. The original bylaws reserved six of the foundation’s 11 board seats for the two schools, ensuring they would always have a majority stake in any decision-making.
The lawsuit claims that after Riley died in 2017, the minority group on the foundation’s board met secretly and revised the bylaws, stripping the schools of their six seats, substantially changing the organization’s charitable goals, and selling 700,000 shares of Citizens stock without giving any of the proceeds to the schools. After 2018, Baylor went from receiving more than $1 million annually from the foundation to just $250,000, according to school officials.
Ousted Southwestern Seminary President Paige Patterson reportedly maintains close ties with several of the foundation’s board members. The Fort Worth, Texas, school fired Patterson and stripped him of his retirement benefits in May 2018 over his mishandling of sex abuse claims while president of Southwestern in 2015 and of Southeastern Baptist Theological Seminary in Wake Forest, N.C., in 2003. The board changed the bylaws just days after the messy separation. Patterson, Hughes, and the foundation board have not commented publicly on the allegations in the lawsuit.
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Laura is an education correspondent for WORLD. She is a World Journalism Institute and Northwestern University graduate and serves as the communications director for her church. Laura resides with her husband and three sons in Clinton Township, Mich. Follow Laura on Twitter @LTEdghill.