NEW YORK — It would have been the largest private donation ever to a historically black college or university: $237 million – far beyond the beneficiary’s donation. The money was pledged by a 30-year-old who recounted his rise from childhood in foster care to becoming, as he put it, “the youngest African-American industrial hemp producer” in Texas.
And so, on the first weekend of May, Florida A&M University celebrated Gregory Gerami’s extraordinary contribution with all the necessary pomp. He spoke at the beginning. Administrators dressed in formal attire posed with a huge check. Gerami also assured the public that “the money is in the bank”.
It wasn’t, and maybe it never will be.
Following public backlash over its apparent failure to adequately vet Gerami and the donation, FAMU said the gift is now on pause — frustrating expectations of greater financial stability for the 137-year-old institution and its 9,000 students. Gerami says everything will eventually work out, but other small universities he has approached with proposals for large donations have never received money.
Gerami contacted Florida A&M’s development office about a donation last fall, according to Shawnta Friday-Stroud, then vice president for university advancement. University officials, including President Larry Robinson and athletic director Tiffani-Dawn Sykes, began meeting with him virtually shortly thereafter.
In January, Atlanta Spelman College Announces $100 Million Endowment – then considered the largest donation to any HBCU. FAMU officials say Gerami wanted to surpass that number. They eventually agreed that this would result in 14 million shares of their fledgling industrial hemp company.
However, the value of the company – and these shares – remains uncertain.
Gerami founded Batterson Farms Corp in 2021 with aspirations of becoming a leading producer of hemp plastics. While Texas Department of Agriculture records confirm the company is licensed to grow hemp, little else suggests this is happening.
The company’s website is sparse. Affiliate links for purchasing HempWood products were broken and the shopping cart payment function failed when an Associated Press reporter visited the site in late May and early June. A mixed message for investors also warned of fines for being late in making monthly payments on time.
Kimberly Sue Abbott, a founding board member who told the AP she was incorrectly listed as co-CEO, cast doubt on Gerami’s self-reported stock value and said Batterson Farms is “not growing any hemp anywhere I think.” know. .”
She and Gerami met around 2013 during her time on the Birmingham, Alabama City Council. She felt he needed guidance on how to “do something good with his money.” Since then, he has invited her to participate in several ventures — none of which lasted, she said.
“He never follows a schedule. The information he has is always flawed in some way. Technical issues are always a problem,” she said.
Greg Wilson, founder of HempWood, confirmed that Gerami is a customer, but said he doesn’t buy much. High interest rates reduced home sales and interest in remodeling with products like his, Wilson said, making this a bad time for wood-alternative businesses.
Gerami described Abbott’s characterizations as “inaccurate” and outdated. Without answering whether or not Batterson Farms grows hemp, he said his company acts as an intermediary between farmers and consumers. He declined to provide details about the company’s contracts, revenue and personnel.
He also alleged that a third-party developer created the company’s website, which he said was never intended to be a place where people could buy flooring directly.
Florida A&M employees shared little about their knowledge of Gerami or its vetting process.
Friday-Stroud told FAMU Foundation board members last month that an “extensive screening” of Gerami’s background produced the same information that ended up “on social media,” apparently referring to the online uproar over his previously reported donation attempts. and the obscurity of his company.
Still, she said, they moved on after looping Robinson. Friday-Stroud signed a nondisclosure agreement on behalf of the foundation’s board on April 26 at Gerami’s request, according to a copy obtained by AP.
They also announced the donation pending a still-pending independent assessment of the value of the private shares, which Gerami said they valued based on existing but undisclosed sales contracts.
Officials acknowledged that the assessment could come back with a much lower rating.
Stock grants and NDAs are not uncommon for university advancement offices. However, according to some higher education fundraisers, these donations often come from wealthy shareholders of reputable public companies and NDAs must include the foundation’s entire board.
“You want to make sure those resources are always available before you make the announcement,” said W. Anthony Neal, a longtime HBCU fundraiser who has dealt with Gerami in the past. “Because you don’t want to come back with egg on your face.”
Companies typically obtain what’s known as a 409A valuation from an independent third party before donating shares, said Bob Musumeci, an Indiana University management professor with experience in corporate finance.
Shareholding, number of employees, financial projects and other details are considered in the evaluation. Outside investment from things like a family trust can also increase the value of a company beyond what sales figures – and public data, if available – might suggest.
Gerami did not violate any laws by violating this rule, Musumeci said, but the fact that the gift was not properly evaluated before being released is questionable.
“I would certainly be cautiously pessimistic about that. But I can’t say whether it is or not,” he said of the accuracy of the assessment.
Both FAMU and Gerami stated that the transfer of share certificates between their respective accounts took place in April.
A spokesperson for Carta, the stock management company they say completed the switch, would only confirm that the platform notified Gerami on May 14 that his contract was terminated due to “false statements” he had made. They declined to comment on FAMU’s claim that it had a Charter account and Gerami’s claim that the company sent documentation confirming the transfer.
Florida A&M is not the first school to receive a proposal from Gerami.
Neal, the HBCU fundraiser, was overseeing a $3.4 million 2023 fundraising campaign for the 150th anniversary of Wiley University in Marshall, Texas, when Gerami reached out. They discussed funding for new campus facilities in the $1 million to $2 million range, Neal said, and he began the “normal vetting process” as senior vice president for institutional advancement at the time.
But not much information emerged. After at least seven conversations, Neal sought a one-on-one meeting to personally verify Gerami’s legitimacy. Subsequently, communications were interrupted.
“Sometimes donors just give up,” Neal said. “It doesn’t mean anything bad.”
However, three years earlier, Coastal Carolina University also withdrew a $95 million contribution made by an anonymous donor because it “had not met an initial expectation of the agreement,” according to a press release.
Although CCU declined to name the anonymous donor in an email to the AP, Gerami was identified as the benefactor last spring by The Sun News in Myrtle Beach, South Carolina.
Gerami told the AP that he “considered” up to 15 colleges and universities in recent years as part of a strategy to establish research partnerships that he said would make his company eligible for grants. Although Gerami did not disclose the names of these schools, those documented are all small institutions with meager endowments. He said he was keeping an eye on institutions that needed funding and had the capacity for hydroponics, a method of growing plants without soil.
The consequences at FAMU are palpable.
The school ended its relationship with Gerami. Friday-Stroud resigned. University trustees — surprised to have been left in the dark throughout the six-month process — approved a third-party investigation that state officials joined.
Speaking May 15 before trustees, Robinson described Gerami’s donation announcement as “premature at best.”
“I saw in this unprecedented gift the potential to serve our students and our athletic programs in ways unimaginable at that time,” Robinson said. “I wanted it to be real and I ignored the warning signs along the way.”
Days after announcing the donation, Robinson withdrew a $15 million request from a local economic development board to improve FAMU’s football stadium, according to records obtained by AP.
Although he did not give a reason and the university declined to comment, the gift agreement shows a one-time allocation of $24 million from Gerami’s endowment for athletics facilities.
Millions annually are also expected to fund scholarships, nursing school and a student business incubator over the next decade.
The public embarrassment has worried some HBCU supporters, who hope the overwhelming negative attention doesn’t dampen an otherwise resurgent fundraising atmosphere.
“As someone who wants HBCUs to always be successful, this is really heartbreaking because there was so much enthusiasm,” said Marybeth Gasman, an education researcher at Rutgers University and a three-time HBCU board member. “Just real emotion for a transformative gift of this magnitude.”
There was a time when HBCUs might have taken a chance on an unknown miracle donor, but Gasman said that’s less common now. Far away ignored by foundations It is underfunded by some statesschools wooed and won new corporate interest in the last years.
Still, disparities in public funding persist. Historically, Black land-grant universities in 16 states have lost $12.6 billion over the past three decades — including $1.9 billion that should have gone to FAMU — according to a 2023 Biden administration analysis.
For his part, Gerami believes that doubts about his donation are unnecessary. He admitted that the value of his donation was his own estimate, but said he expects an independent valuation to confirm the value of the shares within a month. He said he also believes FAMU will accept the gift once its independent investigation is complete.
“Until a third-party assessment is done, this is all speculation,” Gerami said.
“We want to act very carefully because we don’t want to play games that lead to speculation without real, factual information,” he added.
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