Florida A&M University has decided to “put on hold” a donation of $237 million from a Texas hemp farming executive.
The decision was made after the media and school leaders raised questions about the value and source of the gift. President Larry Robinson announced the decision at an emergency meeting of FAMU’s fundraising foundation on Thursday.
Board members expressed concerns about the donation, which has drawn national attention as one of the largest ever for one of the country’s historically Black colleges and universities. The donation came in the form of millions of shares of stock, according to an agreement released by the school. Although the shares have already been transferred to FAMU, it’s unclear how the university will proceed.
“With regards to the gift and the processing of it and so forth, in terms of future processing, we’ve already decided it’s in our best interest to put that on hold,” Robinson said during the meeting.
The alleged windfall donation to FAMU came from Batterson Farms Corporation’s Gregory Gerami and the Isaac Batterson Family 7th Trust and would’ve almost tripled the school’s endowment, helping students and faculty for generations. But after the announcement was made — with major fanfare during a Saturday commencement ceremony — skepticism quickly quelled the celebration.
For one, Batterson Farms Corporation appears to be a relatively small outfit based in Texas selling hydroponic hemp farm products, leading some to question how its stocks could be worth millions. The doubts have been heightened by reports about Gerami’s past dealings, including a $95 million donation to Coastal Carolina University in 2020 that was terminated by school officials only weeks after it was publicly announced.
During Thursday’s emergency meeting, FAMU foundation members raised these points while venting frustrations about how school staff transacted a nine-figure donation without telling them or the board of trustees. Some board members claimed to have learned about the donation from the university’s press release or friends after graduation. The board of trustees had already called a special meeting for next week to discuss the donation before Thursday’s shock announcement.
“How did we get this far without knowledge of the transaction or the donor?” asked Chekesha Kidd, a foundation member who is co-founder and CEO of Kinumi, a concierge service.
School leaders — including Robinson and Shawnta Friday-Stroud, FAMU’s vice president for university advancement — said they were barred from discussing the gift publicly due to a non-disclosure agreement. They defended accepting the donation from Batterson Farms Corporation, noting the potential upside should the company go public. Batterson Farms did not respond to a request for comment about the potential future value of its stock.
Still, the shares could be worth “$500 million or it could be zero,” Laurence A. Humphries, a member of the foundation’s board, noted at the meeting.
“Yes, there is clearly risk, and we are seeing that in everything that has shaken out,” Friday-Stroud said during the meeting. “But at the time that was the decision.”
FAMU did not reach out to Coastal Carolina University as they vetted Gerami’s gift, officials confirmed Thursday.
That failed donation was one of several red flags that should have been raised during the vetting of FAMU’s gift, according to finance experts.
The gift would have been paid out over the next decade, according to an agreement obtained through a records request Thursday by the Tallahassee Democrat. The agreement shows that Gerami “donated 14 million shares of stock of intrinsic value worth at least $239,000,000 and will donate an additional $61,000,000 over 10 years” — valuations that don’t match what the school announced only days ago.
The agreement, though, does not specifically name a company, and it’s unclear where and how the stocks were valued.
“Where does this valuation come from?” Rebel Cole, a professor of finance at Florida Atlantic University, said in an interview. “It raises more questions than it answers. If I were a dog, my hackles would be up.”
The Florida A&M Board of Trustees has called an emergency meeting for Wednesday, May 15, at 3 p.m. That meeting is open to the public.