Fate of $200,000 JA scholarship a mystery

The turmoil that now engulfs Junior Achievement of Central Indiana likely was spawned by questions that arose in 2008 about
the handling of a scholarship fund worth about $200,000.

“I couldn’t get information,” said Linda Byers Smith, whose mother, Aggie Byers, established the Charles
D. Byers Merit Award in 1998 in memory of her late husband. “It just aroused a lot of concerns and suspicions and things
I couldn’t put my finger on.”

Because of her unanswered questions, Smith decided last spring to move the fund to the Central Indiana Community Foundation.
CICF already was overseeing a charitable-remainder trust for Smith, and Rob MacPherson, vice president of development, agreed
to help her.

Smith wasn’t the only benefactor MacPherson needed to look after. One of CICF’s
major donor-advised funds, the Glick Fund, had granted $2 million to Junior Achievement to build an addition to its headquarters
at 7435 N. Keystone Ave.

In late November, about a month after MacPherson saw records showing the fund had been liquidated, CICF notified JA that
it was stopping payment on its grant. CICF also requested an outside audit of the money that had been paid out so far, about
$700,000.

Controversy mounted. Contractors who were working on the addition went unpaid and left the job in February. Then, in March,
retired Junior Achievement CEO Jeff Miller sued the organization, current CEO Jennifer Burk, CICF and its president, Brian
Payne.

Miller claimed in the lawsuit that Burk and Payne defamed him by making unfounded allegations to various people about misappropriated
funds.

Meanwhile, Smith still doesn’t know exactly where the scholarship money went, and she’s not sure whether JA will
continue the program. The four-year award of $1,000 to $1,500 goes to a high-school student participating in a JA mentoring
program.

Byers, a 67-year-old small-business owner, said she always looked forward to the May awards luncheon.

“That kept my father’s memory alive for me.” This year, she said, “I’ve heard nothing.”

The results of the CICF audit haven’t been made public, and MacPherson wouldn’t comment on the Byers fund. It’s
clear, however, that his work on Smith’s behalf provided a window into JA’s accounting.

After meeting with Burk last August, he wrote an e-mail to Smith explaining that an organization related to JA—the
Experiential Learning and Entrepreneurship Foundation—didn’t share records on the Byers fund with JA.

“Jennifer doesn’t even know where the funds actually are … doesn’t know who is holding them,”
MacPherson said in his e-mail. “This is a big problem!”

Finally, last October, MacPherson met with Miller, who produced a ledger for the Experiential Learning Foundation. It showed
the Byers fund was liquidated on Sept. 30, 2008.

Miller was CEO of JA as well as president of the Experiential Learning foundation at the time. The two not-for-profits have
different roles. JA takes curriculum about finances and business into area schools. It also operates Biz Town and Finance
Park, where students top off their classroom lessons through a day of role-playing.

The foundation owns the building on Keystone Avenue, and operates other businesses, most recently a catering company, with
the intent of providing support to JA.

Miller retired from JA at the end of 2008, but continued working for the foundation as its president and consultant through
last year.

Miller and Burk did not return phone messages.

Merger shifted funds

The Byers family originally set up the scholarship fund with the Executive Service Corps of Indiana. When that organization
agreed to merge into the Experiential Learning Foundation in 2006, the foundation assumed responsibility for the scholarship.

Executive Service Corps was struggling to pay its bills at the time, former Chairman Bob Parks said, so its members and former
executive director looked for one or more organizations that could take over its programs, the largest of which was mentoring
high school students.

About 60 volunteers, mostly retirees, worked either with groups of students or one-on-one, guiding them toward some sort
of post-secondary education, Parks said. Some volunteers would also donate $1,000 or more to create scholarships for students
who didn’t receive the Byers award.

The retired executives were pleasantly surprised when JA stepped in, Parks said. The foundation executed the merger and acquired
Executive Service Corps’ assets, while JA added two staff members to its payroll.

Executive Service Corps had tens of thousands of dollars in a bank account, a computer, and curricula that had been developed
over the years, Parks said. He said the largest asset was the Byers fund, established through a restricted gift of $200,000.

A statement Miller gave to MacPherson last fall shows the Byers fund was worth $210,809 at the end of 2006. Its value was
$166,997 when it was liquidated in September 2008.

Parks said he thought Executive Service Corps had permission from the Byers family to move the fund, but Smith says no one
contacted her until after the merger.

Smith wasn’t alarmed because JA had hired Executive Service Corps’ mentoring director.

“I trusted the process,” she said. “I had a high level of trust with the Executive Service Corps people.”

Asking questions

Smith started asking questions after August 2008, when JA reorganized the mentoring program and fired the staffer
Smith had known for years. The answers were not encouraging.

According to Smith, Miller explained that he took the money out of the foundation’s investment portfolio and loaned
it to JA at 5-percent interest. He argued that was a conservative investing move.

In a February 2009 e-mail to Smith’s brother in New Jersey, Charlie Byers, Miller explained, “The fund began
to lose value and ELEF decided to get the funds out of the market and invest them at least in the short term in something
safe and stable.”

Miller sent a three-line statement to Smith in March 2009 that said the fund balance as of the end of the prior month was
$170,647. Yet the statement did not include an account number, the name of a bank, or any other information about where the
money resided.

“That was unacceptable,” Smith said. That’s when she decided to move the fund to Central Indiana Community
Foundation.

The Experiential Learning Foundation may have been within its rights to liquidate the Byers fund, depending on what rules
were created to govern it, Indiana University law professor Lawrence Jegen said.

“I’d like to see the originating documents of that fund,” he said.

Smith’s copy of a proposed agreement creating the Byers award doesn’t say anything about what should happen to
the money if Executive Service Corps dissolved.

Dave Sternberg, a local not-for-profit consultant, said the fund might have been protected if the Executive Service Corps
had retained any seats on the board of directors in the merger.

“What they really wanted from ESC wasn’t their program. It was whatever money they had,” Sternberg said.
“The only asset they had was that scholarship fund.”•