Florida A&M University is putting a “pause” on the “transformational” and controversial $237 million donation that electrified the campus community before plunging the administration into a full-fledged crisis of confidence.
At an emergency FAMU Foundation Board meeting Thursday afternoon, President Larry Robinson announced the university would not move forward until it could determine the value of the stock options donated by Texas hemp farmer Gregory Gerami, who’s the CEO of Batterson Farms Corp and a trustee of the Isaac Batterson Family 7th Trust that supplied the donation.
Robinson said he spent most of the day reaching out to board members to share the university’s decision.
“With regards to the gift and the processing of it … We’ve already decided that it is in our best interest to put that on pause,” he said, noting he spent most of the day informing board members of the university’s decision.
FAMU will also examine the processes that enabled a little known entrepreneur to command the graduation stage and announce a gift that now appears to be too good to be true before a graduating class of seniors, their families and the Rattler Nation.
A non-disclosure agreement leads to a ‘very, very problematic’ situation
Several Foundation board members didn’t hold back their disappointment and concern for what appears to be a lapse of proper procedures, communication and vetting, along with decisions made to exclude board chairs of the foundation and the FAMU Board of Trustees from the donation information prior to Saturday’s bombshell announcement of the multi-million gift.
As a condition for his gift, Gerami imposed a non-disclosure agreement on the university.
That meant that outside of a tight circle of about half a dozen FAMU administrators, directors and others, no one was aware of the multi-million donation prior to the surprise announcement at Saturday’s commencement speaker, where Gerami was allowed to be the keynote speaker at his behest.
“And the money is in the bank,” he proclaimed to loud applause.
But it wasn’t. Instead, there was “14 million shares of stock of intrinsic value” with a schedule to covert it to cash over a 10 year period.
Board member Chekesha Kidd, a newcomer to the board, asked a series of questions about converting the stock to cash and said the liquidation process wasn’t clear.
“I just want to say how excited a lot of us were when we first saw this come through,” Kidd said, adding the major donor gift had the potential to take the institution to a transformational level.
However, she said the foundation has a fiduciary responsibility that includes protecting the university’s reputation.
“I’m here to really understand the process and the transaction itself,” said Kidd, adding she didn’t learn about the donor gift until she received information from a friend Saturday night.
“The board got no official notice about this until Sunday afternoon. That’s very, very problematic,” Kidd said.
Stock could be worth anywhere between $0 and $300 million depending on the buyer
Shawnta Friday-Stroud, the university’s vice president for University Advancement and executive director of the FAMU Foundation, revealed details that had not yet been shared publicly that include the stock valuation, how the university was first contacted about the gift and the decision to proceed with a partnership despite Google searches that revealed eyebrow-raising details about Gerami’s background.
That included an earlier news report from the Myrtle Beach Sun News that a $95 million “transformational” planned gift to Coastal Carolina University in Conway, S.C., fell through a year earlier. Despite that, FAMU officials admitted they didn’t reach out to their Coastal counterparts to discuss Gerami or his donation.
Shawnta Friday-Stroud said the main hailed as the youngest hemp farmer in Texas first called the university and he was transferred to the development officer, Audrey Simmons-Smith, director of development, in the fall of 2023.
“After having several conversations with Mr. Gerami, Ms. Simmons-Smith put together a proposal of certain programs that she thought he might be interested in supporting. She also had an initial screening done of him.”
Talks continued, along with virtual meetings with Friday-Stroud. Additional meetings included other areas of mutual interest and more of FAMU’s leadership, including Robinson, Athletic Director Tiffani-Dawn Sykes and Deborah Sullivan, who heads the Center for Disability Access and Resources (CeDAR).
“From there, we decided on an initial amount based on what he was interested in supporting here at FAMU,” Friday-Stroud said. “After having conversations with those individuals, we came up with an amount.”
But Gerami wanted to up the game when he heard about a historic $100 million donation to Spelman College, which was lauded as the largest donation in HBCU history.
She said Gerami came armed with a $237 million appraisal of non-publicly traded stock in his company.
Valued at $15.85 a share, the 14 million shares of stock meant the university stood to gain a donation that dwarfed Spellman’s and would become one of the most generous gifts in recent higher education history. But in Thursday’s meeting, officials said a proper third-party valuation could reveal the stocks to be worthless or anywhere up to $300 million depending on what a buyer might be willing to pay for it.
Board member Cecyl Hobbs closed the meeting with a motion to have an external audit of the foundation’s processes around evaluating and receiving major gifts.
After another board member expressed concern about spending money on an outside company, the board voted unanimously to bring the audit and development committee together to scrutinize and “formalize” the processes for major gifts.
The high stakes board meeting won’t be the last. The university’s Board of Trustees has scheduled a special meeting — open to the public — that will be held at 3 p.m. Wednesday over Zoom to take a hard look at the details of the donation.
“I think we all believe there was positive intent here,” Kidd said as the foundation meeting was coming to a close. “The university leadership … wants the university to excel, we want to be able to attract major gift donors. I think this was a huge learning opportunity for us, I hope.”
Contact Economic Development Reporter TaMaryn Waters at tlwaters@tallahassee.com and follow @TaMarynWaters on X.
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