Addison Gibson Foundation restructures to focus on easing student debt
July 1, 2014 11:03 PM
By Joyce Gannon / Pittsburgh Post-Gazette
Armstrong County native Addison Gibson made millions in the oil fields of east Texas and Oklahoma in the early 20th century, but he wanted his fortune to help people of limited means in Western Pennsylvania who couldn’t afford medical care or a college education.
Through the Addison Gibson Foundation — established in Pittsburgh after the obscure oil baron’s death in 1936 — millions of dollars have been distributed for the purposes he intended.
But since quietly closing the foundation’s offices in December, its trustees have restructured the manner in which it will hand out money going forward.
Instead of providing low-interest school loans and medical grants to individuals, beginning this year the trust will allot about $500,000 a year directly to five colleges or universities to be used for student scholarships; and about $500,000 annually to five hospitals or health care institutions to treat people who lack insurance or cannot pay for services.
The institutions that will receive funds this year have yet to be identified, said Timothy Slavish, a co-trustee and attorney with Downtown law firm Clark Hill Thorp Reed.
The change in how the foundation distributes its funds is the result of the trustees’ agreeing to eliminate the overhead costs for an office and three employees; and their decision to help reduce college students’ soaring debt load, Mr. Slavish said.
“We came to the conclusion that what Mr. Gibson hoped to accomplish when he set this up certainly didn’t envision the world we live in today and the world of student debt,” Mr. Slavish said.
What is the Addison Gibson Foundation
“The administrative costs of what the foundation was doing were higher than we deemed to be appropriate given the size of the foundation.”
According to the federal tax return filed in 2012, the foundation’s assets were nearly $30 million and it paid out more than $900,000 that year in grants and loans.
In January, Allegheny County Common Pleas Judge John Zottola approved a petition by the trustees to modify the trust so that it could eliminate the educational loan program and distribute only grants. The foundation’s office in PPG Place, Downtown, was shut in December, and the trustees — which also include PNC Bank and Douglas Gilbert, another attorney with Clark Hill Thorp Reed — an outside firm to manage an outstanding student loan portfolio of about $7 million.
“Historically, we’ve had a very, very high rate of repayment and we fully expect to be repaid for virtually all the loans out there,” Mr. Slavish said.
Mr. Gibson, who by all accounts was largely unknown in Pittsburgh when he died and left about $2.5 million to launch the foundation, didn’t attend college.
According to the foundation’s website, he was born in 1861 in Elderton, a tiny borough in Armstrong County. As a boy, he began “scouting” oil leases.
Through that activity, he met and became a business associate of Joseph Pew, the founder of Sun Oil Co., which later became Sunoco. Apparently Mr. Gibson struck it big when he invested in an oil well near Tampico, Mexico.
When he had reason to be in Pittsburgh later in life, he stayed with an attorney friend, Earl Reed, and learned that Mr. Reed had obtained his law degree only because a friend loaned him money to prevent him from dropping out.
That may have inspired Mr. Gibson to direct some of his estate to education because in his will, drafted in 1935, he wrote that he wanted to help “worthy children of parents who are poor or of limited means [and who] cannot obtain the higher education which they crave and which, if they could obtain, might greatly increase their happiness and their usefulness and efficiency.”
Among those whose loans from the Gibson Foundation helped them afford college or graduate studies was Neil Capretto, medical director of the Gateway Rehabilitation Center based in Aliquippa.
For medical school, he considered entering a federally-funded program through which the government would pay his tuition, but he would have been required to live and work in another part of the U.S. With the Gibson Foundation loan, he was able to pursue opportunities in the Pittsburgh region.
“It was like a life line,” Dr. Capretto, a native of Vandergrift who borrowed money from the foundation while he attended the Philadelphia College of Osteopathic Medicine in the late 1970s. “It allowed me to return to my dream of practicing medicine in Western Pennsylvania.”
Though it has yet to identify the health care institutions and schools that will receive grants this year, Mr. Slavish said the trust’s plan is to select at least five in each sector and award $100,000 to each.
Financial aid officers at each school and officials at the health care organizations will identify potential recipients and submit those names to the trustees for approval. Students will likely receive a maximum $5,000 per year or a maximum $20,000 over a four-year stay in college, he said. Individuals who receive medical aid are likely to receive a one-time grant of $25,000 maximum.
Most of the institutions that receive money will likely be in Western Pennsylvania, Mr. Slavish said, based on the foundation’s history of directing its giving to the region.
“Our core borrowers are classic, needy students from working class families,” he said. “There was no limit in Mr. Gibson’s will as to where the schools might be but the students had to be from Western Pennsylvania.”
While the recipients must still meet the requirement of being from the western side of the state, a couple of other stipulations of Mr. Gibson’s will have evolved with the times.
Originally, he said, “preference should be given to sons of men engaged in the oil industry, but I do not limit my trustees by this expression of preference.”
For years, the provision that recipients be children of oil workers has not been a factor in awarding money, Mr. Slavish said.
Nor has the money been limited to male recipients, he said, because in 1992 a court ruling allowed the trust to alter the will’s wording so that loans could be made to “individuals” as well as “men,” “boys,” and “sons.”
After World War II, when the federal government’s G.I. Bill provided money for veterans to go to college, the foundation directed part of the surplus in its educational fund to local hospitals which pooled their grants and created a research laboratory at the University of Pittsburgh. The lab focused on research for cardiovascular disease and conducted biology education programs for high schools students.
Joyce Gannon: email@example.com or 412-263-1580.
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