Lois and Ken Carpenter's gift of mineral rights, once thought worthless, is windfall to UUA.
UUA President Peter Morales stands with Lois and Ken Carpenter in Durango, Colo.
Loving County, in West Texas, is the least populous county in the United States: barren of people, trees, water. In 1992, when Ken and Lois Carpenter donated mineral rights to 480 acres in Loving County to the Unitarian Universalist Association, it was unclear whether the gift held any value at all.
But 22 years later, that seemingly valueless gift turned out to be a boon to the UUA, one that couldn’t have come at a better time: just when the board of trustees, facing a budget deficit, was going to borrow $400,000 from the UUA endowment for operating expenses.
The Carpenters’ gift was announced at the October 2014 meeting of the UUA Board of Trustees, where President Peter Morales and the entire board formally thanked them. “We admire and appreciate the Carpenters and their loyal, sustained attention to our faith, both in their service and financial generosity,” said the Rev. Mary Katherine Morn, the UUA’s director of Stewardship and Development.
The Carpenters got into the oil business in the mid-1960s upon joining Lois’s father in West Texas. They were longtime members of the UU Church of Midland, Tex., before moving to Durango, Colo., 10 years ago, where they are now members of the UU Fellowship of Durango.
In 1992, UUA President William F. Schulz asked the couple—who had been named as co-chairs of the newly created President’s Council—to make a donation to the capital campaign. With no cash to contribute, they said, they decided to donate the mineral interests in 480 acres they owned in Loving County. The land had never been drilled, and the mineral rights were appraised at $100,000—but they worried the gift might turn out to be worthless.
“I always thought if it doesn’t work out we can buy it back from them and give them their hundred thousand,” said Ken.
For 12 years, the gift sat on the UUA books and eventually was written off by the UUA’s auditors as worthless. Then, in 2004, the mineral rights were leased and the UUA received $225,000. “We were pleased because they finally got some money,” said Lois, laughing.
A few years later, drilling began and spurred interest from oil companies. The Carpenters advised the UUA to sell the mineral rights to most of the acreage,* which, in addition to the lease, netted the UUA about $1 million. There were also some royalty payments coming in.
Then last spring, with even more companies interested, the Carpenters recommended the UUA sell the rest of its rights, which, combined with another lease, netted another $940,000. “I encouraged them to do it; I don’t think they have any business speculating,” said Ken. All told, the Carpenters’ generosity has brought just over $2.25 million to the UUA over the years.
There was no legal way the UUA could keep the minerals in the ground, Carpenter explained. The UUA did not own a 57-acre lot, but rather a 57/640th undivided interest in the minerals beneath a 640-acre piece of land known as Section 11. If the owners of the other 583/640ths interest in Section 11 leased their mineral rights, drilling could begin no matter what the UUA wanted.
Photograph (above): UUA President Peter Morales stands with Lois and Ken Carpenter in Durango, Colo. (Mary Katherine Morn).
Correction 10.29.14: An earlier version of this story said that the Carpenters’ gift would eliminate the need to borrow from the UUA’s endowment in fiscal year 2015 and fiscal year 2016. The board had only approved a loan from the endowment in FY2015. The story also reported that “the budget for next year already has a head start,” based on comments made at the October board meeting. Senior UUA staff have clarified that they were referring to fundraising for the upcoming capital campaign, not to revenue lines in the next budget. Click here to return to the updated paragraph.
Clarification 10.29.14: An earlier version of this story reported that Carpenter had encouraged the UUA to sell “two-thirds” of its mineral rights a decade ago, based on information he supplied to UU World. In fact, the UUA sold almost all of its stake in the Texas mineral rights 10 years ago, keeping only 12 percent of its original stake. Click here to return to the updated paragraph.