$770 Million Infusion of Assets Makes the USA Group Foundation One of 60 Largest Foundations in the United States and Second Largest in Indiana.
INDIANAPOLIS, June 15 /PRNewswire/ --
When USA Group, Inc., and Sallie Mae (NYSE: SLM), two of the nation's preeminent providers of education financial services, today announced their agreement to combine their business operations, the stage was set for the USA Group Foundation(TM), a small Indiana grantmaker, to become one of the 60 largest foundations in the United States and the second largest in Indiana.
As part of the transaction, Sallie Mae will pay $770 million in cash and stock to acquire the student loan operations built over the past 40 years by USA Group(R). Because USA Group is a nonprofit organization, the proceeds of the sale will be transferred to the USA Group Foundation and continue to be used for charitable purposes. The Foundation will transform into a separate charitable organization with its own board of directors.
The USA Group Foundation's $770 million in assets will make it larger than every other Indiana foundation except the $11.5 billion Lilly Endowment. It will rank among such nationally known foundations as The Bush Foundation, The William Randolph Hearst Foundation, and The Henry J. Kaiser Family Foundation.
By focusing on expanding access to higher education, the USA Group Foundation also becomes a major player in a critical area of public need.
"USA Funds(R), the predecessor of USA Group, was founded 40 years ago with a vital goal in mind: helping more American students pursue higher education," said Edward A. McCabe, the current USA Group chairman who will become the first chairman of the USA Group Foundation.
"By establishing this Foundation, we've created a powerful new resource for furthering educational access across America. In many ways, it's a resource far greater than our founders ever could have imagined, and one that stands as a lasting legacy to the men and women of USA Funds, whose 40 years of hard work, dedication, and innovation made this public asset possible," McCabe said.
In addition to McCabe's appointment, the USA Group board of directors announced their intent to elect John M. Mutz -- retired president of PSI Energy, former president of Lilly Endowment, and former lieutenant governor of Indiana -- the Foundation's vice chairman and Martha D. Lamkin -- USA Group executive vice president of Corporate Affairs -- Executive Director of the USA Group Foundation.
Since it was formally established in 1997, the USA Group Foundation has been funded through the budget of USA Group, a nonprofit organization that has grown into the nation's largest student loan guarantor and administrator since the founding of USA Funds in 1960.
In 1999, the USA Group Foundation donated more than $2.1 million to improve higher education nationwide and to support other educational and civic endeavors in the communities where USA Group employees live and work.
As an independent charitable foundation with dramatically increased assets, the Foundation expects to spend approximately $40 million annually to support its mission of expanding access to higher education. It also will continue to play an appropriate role in its home state of Indiana.
"Access to education is a national issue, so the Foundation will focus its work across America," said Lamkin. "We also recognize that the USA Group Foundation has a special role to play in Indiana, whose men and women have worked to build this asset for the public interest."
Initially, the Foundation plans to support research studies by its own staff and experts at outside institutions to frame issues and explore new solutions in the higher education arena. The Foundation plans to gather and analyze information on matters affecting access to education, such as cost, affordability, and financing alternatives. The Foundation plans to share this information with the public -- including educators, students, and families - through publications, conferences, and special events. It also will provide grants that encourage innovative improvements in access to higher education. It will focus especially on the programs and practices of educational and other related institutions, as well as governmental entities.
The Foundation will have a 13-member board of directors, including representatives of the higher education community. Nine members, drawn from USA Group's current board of directors, were named today. They are:
-- Edward A. McCabe, currently chairman of USA Group and Of Counsel for
Hopkins & Sutter, Washington, D.C.
-- Gerald L. Bepko, chancellor of Indiana University Purdue University
-- Rev. E. William Beauchamp, executive vice president, University of
Notre Dame, Notre Dame, Ind.
-- Susan M. Boyle, former executive vice president, Xerox Financial
Services, Greenwich, Conn.
-- Norris Darrell, Jr., retired partner and senior counsel, Sullivan &
Cromwell, New York, NY.
-- James C. Lintzenich, vice chairman and CEO of the current USA Group,
-- John M. Mutz, retired president of Lilly Endowment Inc., PSI Energy,
and former lieutenant governor of Indiana, Indianapolis. Mutz was
also named vice chairman of the USA Group Foundation.
-- William R. Neale, partner, Krieg DeVault Alexander & Capehart, LLP,
-- Martha D. Lamkin, currently executive vice president of USA Group,
Designees to the Foundation board plan to focus on organizational issues, grant policy guidelines, and priority setting for several months. After the Foundation has set its course, it will communicate its guidelines and accept grant proposals later this year. The Foundation initially will lease office space in the downtown Indianapolis headquarters of USA Group.