Alfred I. duPont Testamentary Trust

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Alfred I. duPont Testamentary Trust
AlfredDuPontTrust75.png
Trust's 75th anniversary logo
Abbreviation AIDTT
Motto "A Mission without End"
Formation April 28, 1935; 79 years ago (1935-04-28)
Type Charitable foundation
Purpose Improve the health of children.
Headquarters Jacksonville, Florida, US
Location
  • 510 Alfred Dupont Place
Coordinates 30°19′12″N 81°40′25″W / 30.319935°N 81.673632°W / 30.319935; -81.673632
Region served
Delaware, Florida, Pennsylvania & New Jersey
Chairman
Hugh Durden
Main organ
Board of Trustees
Budget
3% of endowment value
Staff
12
Website www.alfrediduponttrust.org
Remarks US$4.6 billion Endowment

The Alfred I. duPont Testamentary Trust is a non-profit organization created by philanthropist Alfred I. du Pont in 1935, devoted to supporting the Trust's sole charitable beneficiary, the Nemours Foundation. As of December 31, 2008, the trust’s value was $3.25 billion and employed nearly 3,500.[1] At the end of January, 2009, it had improved to $4.6 billion, but was still down from $5.5 billion in 2007.[2]

History[edit]

The Alfred I. duPont Testamentary Trust was created as per Alfred I. duPont's will after his death in 1935. At the time, duPont's assets included seven Florida National Banks, significant landholdings in Northwest Florida, E. I du Pont de Nemours Company shares, and the Nemours and Epping Forest estates. The value of the assets was approximately $40 million. The duPont Trustees, specifically Edward Ball, created the St. Joe Paper Company and began operating a paper mill in 1938. The trust had a 1939 value of $72.5 million.

A federal law was enacted in 1966 that barred non-profit organizations from owning both operating companies and banking institutions. Ed Ball fought the legislation for several years, even testifying before a congressional subcommittee, but in the end, he reluctantly sold the banks.[1]

After Jessie Ball du Pont died in 1970, Ball arranged the sale of Epping Forest to his friend, Raymond K. Mason.[3] Before Charter Company was broken up by bankruptcy in the late 1980s, Mason sold Epping Forest to Herb Peyton and Gate Petroleum in 1984. Peyton is presently a duPont trustee.

Before Ball's death, the trust and foundation signed a 1980 consent agreement with Delaware and Florida which stipulated that the Nemours Foundation would annually receive the greater of: 3 percent of the trust's net market value or the net annual income from the trust assets. Additionally, at least 50 percent of Nemours funds must be spent in Delaware, and a $25 million contingency fund must be reserved for Delaware's operations.[4]

Nemours[edit]

The Nemours Foundation operates the Alfred I. duPont Hospital for Children in Wilmington, Delaware; the Nemours Children’s Hospital in Orlando; the Nemours Children's Clinics in Delaware, Florida, Pennsylvania & New Jersey; and the Nemours Mansion and Gardens.

Leadership[edit]

Following Alfred du Pont’s death in 1935, Edward Ball controlled the trust until his own death in 1981. W.L. Thornton, former CEO of St. Joe Company and Florida East Coast Industries succeeded Ball and was chairman of the trust for 23 years. Hugh Durden, corporate trustee since 1997, now a retired executive from Wachovia Bank, was elected chairman on January 24, 2005.[5]

Trustees[edit]

Major investments shift[edit]

The Trust was valued at $1.9 billion in January, 1996.[1] The St. Joe Company was originally owned by the DuPont Trust. After the company went public, the duPont trust owned 70% of the 30.6 million shares outstanding. The company’s stock did well, rising from 53⅝ in February, 1995 to 115½ in December, 1997. The corresponding trust value increased from $1.1 billion to $2.4 billion. The problem was that DuPont’s will stipulated an annual disbursement of the amount equal to 3% of the trust’s value. St. Joe's annual dividend of 20¢ only generated $4.26 million and the required payout was over $72 million, so the trust was forced to sell 4 million shares to invest in a security producing substantially more income than St. Joe.[6] That left a 57% stake, which was reduced by additional stock sales to 23%. On May 28, 2004, the trust filed paperwork to divest as many as 12 million more shares, leaving an 8% ownership.[7] On October 9, 2000, St. Joe divested its 54% interest in Florida East Coast Industries by distributing FECI Class B common shares to St. Joe shareholders; the DuPont Trust received a large block of FECI stock.

A new Chief Investment Officer was hired in 2000 to manage the trust's portfolio. David Gonino proposed a new investment policy and the board approved it: the trust would not own more than 5% of any company, and no single investment could account for more than 5% of the trust's value.[1]

Headquarters[edit]

Alfred I. duPont Testamentary Trust Headquarters

For many years, the trust shared a building with the Nemours Foundation in a building on Jacksonville's Southside. The new headquarters of the trust is a 40,000 ft², five-floor building on the St. Johns riverfront in Jacksonville, Florida which was scheduled to open October 1, 2008.[8] General contractor Elkins Constructors began work on the trust’s new home on July 17, 2007; noted architect Graham Gund contributed to the design as a green building according to LEED standards for environmentally sustainable construction developed by the United States Green Building Council. The most outstanding aspect of the $20 million structure is its ability to conserve.[2]

The building has a stone exterior, copious large windows, and was described in the local newspaper as opulent.[2] According to Hugh Durden, chairman of its board of trustees, "We were looking for a 100-year building...(with) timeless design that is both useful and enduring. If you're going to be here for decades, that becomes a cost-effective investment."[2] The bottom floor is actually a parking garage for workers, so that most of the property is landscaping, rather than parking lot. Three 10,000 gallon underground cisterns capture rainfall, which is then used for landscape irrigation, so a large retention pond is not required. The four-story atrium is capped by a pyramid-shaped skylight, flooding the interior of the building with sunshine and warmth during cool months. Some interior walls contain opaque glass to share light between areas; sensors turn off lights in unoccupied rooms. For employees who want to conserve gas, there is a bus stop within a block of the building, and bicycle storage plus locker rooms for cyclists. Lastly, heating and cooling systems are high efficiency and limit power usage during peak demand periods.[2]

Litigation[edit]

In June 2012, the state of Delaware filed suit against the Trust, claiming the trustees were not following duPont's intentions and Delaware was not receiving their proper yearly distribution. Furthermore, Delaware Attorney General Beau Biden asserted that the $72 million renovation of the Nemours Mansion and Gardens in Wilmington should not have been included in Delaware’s share of foundation distributions.[4]

For several years, the trust had been making plans to split the $4 billion asset portfolio into two segments, with a small portion going to a taxable annuitants’ trust for individuals named in duPont's will, and the majority of assets remaining in the tax-exempt charitable trust. Doing so would allow the foundation to avoid the yearly assessment of several million dollars in foreign taxes. The Delaware lawsuit may delay those plans until that litigation is resolved.[9]

References[edit]

  1. ^ a b c d [1] Zoom Info, Alfred I. duPont Testamentary Trust
  2. ^ a b c d e Patterson, Steve (January 29, 2009). "Its grand; its green, with lots in between". Florida Times-Union. Retrieved 6 March 2013. 
  3. ^ Raymond K. Mason and Virginia Harrison: Confusion to the enemy: a biography of Edward Ball, ISBN 0-396-07274-7, University Press of Florida, 1976.
  4. ^ a b Associated Press (June 18, 2012). "Delaware’s Nemours Foundation At Center Of Controversy". CBS 3 Philadelphia. Retrieved 7 March 2013. 
  5. ^ Basch, Mark (January 25, 2005). "Hugh Durden claims chair of Alfred I. DuPont trust". Florida Times-Union. Retrieved 12 March 2013. 
  6. ^ Basch, Mark (December 20, 1997). "DuPont seeks bigger dividend". Florida Times-Union. Retrieved 12 March 2013. 
  7. ^ Basch, Mark (June 7, 2004). "The St. Joe Co. and the duPont Trust are slowly growing apart". Florida Times-Union. Retrieved 12 March 2013. 
  8. ^ Karkaria, Urvaksh (July 17, 2007). "DuPont Trust begins on new building". Florida Times-Union. Retrieved 8 March 2013. 
  9. ^ Conte, Christian (June 29, 2012). "DuPont Trust plans to split as money-saving strategy". Jacksonville Business Journal. Retrieved 7 March 2013. 

External links[edit]