University of Virginia Library

The undersigned Committee, appointed by Chairman Halsey at the meeting of the Executive
Committee held September 11, 1947, to investigate and report upon the best method to be employed in
the handling and administration of funds obtained through the efforts of the Development Fund
Campaign, respectfully advises as follows:

I. The Committee is unanimously of opinion that the Alumni Association of the University of
Virginia is presently without power to constitute a new and separate Board of Trustees to hold and
administer funds that may now be obtaining through the efforts of the Development Fund Campaign. Its
reasons for entertaining this view are as follows:

The Society of Alumni of the University of Virginia was incorporated by an Act of the General
Assembly of this State, adopted February 6, 1873. By an amendment approved March 7, 1903, the
name of the Society was changed to the General Alumni Association of the University of Virginia. By
Section Seven of this Act, the Association was given "power to raise an endowment fund for the use and
benefit of the University, to be held by the Treasurer of the State, in Virginia registered century
bonds, and all funds belonging to said Association in excess of $1,000, and all those donated for the
purpose of building a public hall, shall be similarly invested and only disposed of as they may be
deemed for the purposes of the Association or the University." By Section Eight of the Act the
Association was given power to receive and hold property and donations passing by grant, conveyance,
demise or bequest, "under the general powers of endowment created in the Seventh Section of this
Act ..."

It is thus seen that under the charter of the Association at that time in effect any endowment
fund raised by it for the use and benefit of the University had to be held by "the Treasurer of
the State, in Virginia registered century bonds." Your Committee is informed that when the Association
interested itself in the raising of an endowment in 1907 and 1908 at least one large donor refused
to give funds which would be subject to the political control of the State of Virginia. The
aforementioned sections Seven and Eight of the charter of the Association were therefore amended as of December
5, 1907, so as to authorize the Association to appoint by deed of trust a Board of seven Trustees,
to be known and designated as "The Alumni Board of Trustees of the University of Virginia Endowment Fund."
It was provided that this "Board and its successors shall be perpetual and its duties, powers, rights, privileges
and responsibilities shall be irrevocable, to hold, manage, invest and expend the funds now raised, or
hereafter to be raised, or any gift or grant heretofore or hereafter made to the General Alumni Association
for the use and benefit of the University of Virginia under the terms of this charter and the provisions
of said deed of trust herein authorized to be executed, which deed shall define the duties, powers, rights,
privileges and responsibilities of said Board."

Pursuant to the foregoing provisions of the charter of the Association, as amended, it
executed on February 15, 1908, a deed to Joseph Bryan, Thomas Nelson Page, Thomas F. Ryan, Alexander
P. Humphrey, Charles J. Faulkner and Williamson W. Fuller, and Edwin A. Alderman, President of the
University of Virginia, ex officio, Trustees, to be known as "The Alumni Board of Trustees of the
University of Virginia Endowment Fund" transferring and conveying "all gifts, funds, moneys, investments
or subscriptions now made or which may hereafter be made, to the said Trustees for the use and
benefit of the University of Virginia," together with "all such grants, gifts, funds, moneys, investments,
interest, credit, bonds, notes, or subscriptions that may hereafter be made of every character
or description whatsoever, including income, revenues, issues and profits thereof, either directly
to the Trustees, parties of the second part, or to this Association for the benefit of the University
of Virginia."

While the charter of the Association has since three times been amended, on August 4, 1922,
January 24, 1929 and September 9, 1933, the rights, powers and duties of the Trustees and their successors,
appointed by the aforesaid deed of trust of February 15, 1908, have been fully preserved, it
having been expressly provided in the amendment of September 9, 1933, that -

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It seems to your Committee, therefore, that title to any funds presently solicited by,
or obtained as a result of the efforts of the Alumni Association of the University of Virginia would
necessarily pass to "The Alumni Board of Trustees of the University of Virginia Endowment Fund"
created by the deed of February 15, 1908, and their successors presently in office. The execution
of a further or additional deed of trust at this time, whereby a new board of trustees would be
created for the purpose of receiving title to, possession and control of funds likely to be raised
in the present campaign would not, therefore, in the opinion of the Committee, be presently within
the power of the Association.

II. In this situation a majority of your Committee, Messrs. Scott and Hildreth, are of
opinion that a new non-profit, non-stock corporation should be organized under the provisions of
Chapter 151 of the Code of Virginia, to be designated as "The University of Virginia Development
Fund," that there be seven Trustees presently selected and named to manage the affairs and investments
of the corporation, and that the President of the University be at all times, ex officio, a
Trustee of the corporation; that the first seven Trustees be selected by this Executive Committee to
serve for terms of one to seven years, respectively, the term of each Trustee to be determined by
lot after their selection by the Executive Committee; that no Trustee drawing a term of more than
three years shall be eligible for re-election but that any Trustee drawing a term of three years or
less shall be eligible for election for one additional term of seven years, that the first seven
Trustees be selected without reference to their respective ages, but that all successor Trustees
shall be of the age of 57 years or less, so that upon the expiration of their respective seven year
terms of service they would have attained an age of not to exceed 65 years, that all successor
Trustees be nominated by a majority vote of the Trustees then in office, such nominations to receive
the approval of the majority of the Board of Managers of the Alumni Association of the University
of Virginia in attendance upon any meeting at which the selection of a successor Trustee shall come
before the Board of Managers for consideration and action; that for each vacancy the Trustees then
in office shall nominate three persons, one of whom shall be selected by the Board of Managers in
the manner stated; that the charter of the corporation provide that all securities held by it shall
be placed in the possession, as custodian, of some trust company or bank having trust powers, organized
under the laws of the State of Virginia and/or of the United States and doing business in
Virginia, with capital, surplus and undivided profits of not less than $2,000,000.00, and that the
corporation may in its discretion employ the services of some corporation or individual, or duly
accredited officer of the University, as investment counsel; that the corporation shall apply
faithfully the gifts or grants to the objects or purposes designated by the donor or grantor, but
when no direction, condition or limitation is attached to the gift or grant, the corporation shall
hold the same with full power to invest and reinvest in accordance with the discretion of its
Trustees, and the income from any and all funds at any time held by the corporation shall, except
as otherwise specifically required and provided by the donor or grantor, be applied to the needs of
the University of Virginia after full conference with the President, Rector and Visitors of the
University, and upon agreement with them as to the expenditure of all or a part of such annual
income, the Corporation shall pay the same, or the part as to which an agreement has been reached,
to the Bursar of the University, to be expended as agreed upon, but in the absence of any such
agreement, all of such income shall be accrued until such time as there be joint agreement and
used exclusively for the benefit of the University of Virginia; that the corporation, acting through
its Board of Trustees, shall have the broadest investment discretion and special care should be taken
in the preparation of its charter to see that its powers are expressed in terms in conformity with
modern investment practice.

If such development fund corporation is organized, Mr. Gay concurs in the statements in
this report as to the manner of its creation, the selection of its director-trustees and the manner
in which they and the corporation shall function, but reserves for further consideration any expression
of opinion upon the question whether, in the over-all interest of the University, it is
wise and expedient to create at this time a new agency for holding and administering funds procured
through the conduct of the campaign presently being undertaken.