Community Foundation to receive
$23 million

Dr. W.E. Upjohn

On June 20 the Kalamazoo County Probate Court ordered a resolution in a case involving the W.E. Upjohn Prizes Trust that will result in $23 million being distributed to the Community Foundation, which will be the largest single gift in the foundation's history.

The order was the result of a settlement agreed to by all parties: Kalamazoo Community Foundation, Pharmacia & Upjohn Company, LLC (formerly The Upjohn Company and now a subsidiary of Pfizer), PNC Bank, and the Michigan Attorney General.

The agreement calls for a portion of the $44 million trust to be distributed to the Community Foundation. The assets remaining in the trust will continue to be used for the William E. Upjohn Prizes, an awards program under which Pfizer honors its employees for their special accomplishments. The Community Foundation’s portion is $23 million, the largest single gift in the foundation’s history.

PNC Bank is the trustee of the trust. The Michigan Attorney General oversees all charitable interests in the state.

“This is a great settlement, and we appreciate the positive relationships that made this resolution possible,” said Carrie Pickett-Erway, President/CEO of the Community Foundation. “This decision honors the legacy of W.E. Upjohn, who had a special interest in rewarding the pursuit of excellence while investing locally in both people and place.”

According to Pickett-Erway, “This amazing gift speaks to the importance of donor intent, the idea of legacy, and the power of unrestricted giving. This gift significantly heightens our flexibility in providing investments with area nonprofits to address the community’s greatest needs.”

The Community Foundation plans to endow the majority of these assets in a newly-established W.E. Upjohn Fund, an Unrestricted Fund allowing flexibility to meet needs in our community. The fund will generate approximately $810,000 annually to be used to invest in the most pressing needs of our community. This will increase that source of resources by approximately 15 percent.

Dr. W.E. Upjohn’s will established a prize trust in 1937 – five years after his death – to recognize special accomplishments of employees at his pharmaceutical company. Under a provision of the trust, the Community Foundation was the beneficiary of income not awarded as prizes and the beneficiary of all income should The Upjohn Company cease to exist or cease to function.

Dr. Upjohn (1853-1932), who started The Upjohn Company in 1886, inspired the creation of the Kalamazoo Community Foundation in 1925 and was its first donor. Dr. Upjohn’s will provided for numerous other gifts to the Community Foundation which today are valued at about $60 million of its $375 million of assets.

PNC Bank asked the Probate Court to provide it guidance on administering the trust in 2003 due to the changes in the corporate structure of The Upjohn Company. In 2007 the Probate Court ruled that Company had ceased to exist and ceased to function. The Court of Appeals overturned the decision of the Probate Court and remanded the case back to that court. After the Michigan Supreme Court denied an application to hear the matter, the parties have been in discussion to determine a settlement.

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