32963 Homepage

Want to purchase reprints of your favorite 32963 or photos?

Copies of Vero Beach 32963 can be obtained at the following locations:


Our office HQ: (located at 4855 North A1A)
1. Corey's Pharmacy
2. 7-Eleven

(South A1A)
3. Major Real Estate Offices


1. Vero Beach Book

2. Classic Car Wash
3. Divine Animal
4. Sunshine Furniture

5. Many Medical

Harbor Branch Foundation fights for its endowment

Photo: An aerial view of the Harbor Branch Oceanographic Institute.

Just weeks before a mediator seeks to resolve a high-stakes financial dispute with Florida Atlantic University, the leaders of the Harbor Branch Oceanographic Institute Foundation maintain they are the best stewards of a $72 million endowment that was intended to fund marine research – not pay for new computers or software on a distant FAU campus.

The university disagrees about who should manage the money.

The Foundation came to be in 2007 when the Harbor Branch Oceanographic Institution’s laboratories and research realm were acquired by FAU.

John Seward Johnson Sr., the son of Robert Wood Johnson, one of three founders of the Johnson & Johnson Corporation, had launched the Harbor Branch Oceanographic Institution in 1971 with the help of inventor Edwin Link.

The two envisioned an independent institute which would use oceanographic research, innovative engineering and deep-sea exploration to preserve the environment and promote greater scientific understanding of the ocean. The Fort Pierce laboratory soon became a world leader in its field, attracting top scientists from all over the globe.

But over time, finances at the nonprofit began to falter. Expenses outran income in part because the Institute had acquired costly research ships and submarines and suffered extensive damage in the 2004 and 2005 hurricanes.

After founding visionary John Seward Johnson Sr. died, his heirs were less supportive. There was no longer an open checkbook to support Harbor Branch, said Michael O’Reilly, chair of the Harbor Branch Oceanographic Institute Board of Directors.

 “They weren’t paying enough attention on being efficient,” O’Reilly said of the board. When insurance payouts came, instead of investing in infrastructure, funding went to operations. “That got them a couple more years, but it didn’t really solve the problem.”

To save Harbor Branch, its board of directors agreed to let the storied institution be acquired by FAU, turning over land, buildings, laboratories and other assets valued at more than $90 million to the university, which incorporated the research institute into its academic structure.

At the same time, the old board became the new Harbor Branch Oceanographic Institute Foundation and refocused its energies on investment and grant-making, determined to protect John Seward Johnson Sr.’s endowment and use it for the purposes he intended. The new foundation board also maintained control over an annual $2 million stream of revenue from the sale of ocean-themed Florida license plates created to support marine research.

For a while, the arrangement that divided Harbor Branch’s assets and functions into two parts worked very well. FAU acquired new prestige as a research university and increased opportunities for its students, and the foundation’s work thrived.

Focusing exclusively on maximizing investment returns and making impactful scientific grants, the foundation over the past 10 years grew its endowment from $40 million to $70 million and channeled more than $28 million dollars to scientists, according to figures in an annual report set to be released this month.

“All we want to do is give money to Harbor Branch,” said Katha Kissman, president and CEO of the Foundation. “We want to make large, impactful grants that raise the visibility of Harbor Branch and we keep our overhead very low. We operate very lean, very efficiently so we can maximize the money to the scientists.”

The millions of dollars given annually by the foundation have gone to support graduate students entering the field of marine science, hire new world-class scientists and fund ground-breaking academic projects. Researchers at the Institute are now searching for cures for cancer in the depths of the Atlantic and developing robotic technology for more efficient sea exploration.

The Foundation also sponsors an annual Indian River Lagoon Symposium that brings together scientists and agencies to learn from one another and hosts a Love Your Lagoon event to raise funds for local ecological and environmental initiatives. The Foundation spent $560,000 in 2015 to develop three land/ocean biogeochemical observatories for real-time water quality sampling in the Indian Lagoon.

“We understand that Harbor Branch is an internationally renowned [oceanographic] institute that has had significant laurels in the past, but we also operate here and want to make sure the lagoon is healthy,” Kissman said.

The current dispute began earlier this year when, during budget negotiations, Daniel Flynn, vice president of Research at FAU, proposed the Foundation merge its staff, accounting, legal representation and other administrative functions with the university to save a projected $416,000. 

There is no need for an independent executive director, Flynn explained to the president of the Foundation’s Board. Administrators should begin transferring accounting and legal affairs to existing personnel at the university.

“FAU does a fine job proving staffing and services to its other ... [Direct Service Operations], some of which are far more complex than  ... [Harbor Branch Oceanographic Institute Foundation],” he writes an email.

The move alarmed the Foundation’s Board of Directors, which feared that, without independent oversight, funds placed in trust by John Seward Johnson Sr. and license-plate revenue designated by the state legislature for marine research could be diverted to other uses.

“Fundamentally, it comes down to intent. Mr. Johnson loved Harbor Branch and he founded Harbor Branch,” said Kissman. “Our foundation was not set up to support a university. We were set up to support the [marine research] Institute.”

The nonprofit filed a lawsuit in March to block the university’s takeover attempt, relying on a 2007  Memorandum of Understanding between the two parties that stipulated the Foundation’s distributions would be made at the “sole discretion” of the Board for purposes of defraying expenses, retiring debt and benefiting the Institute.

Responding, FAU argues in its court filings that the university has a legal responsibility to oversee the Foundation’s work, ensuring efficiency and the interests of the state.

The Foundation is a “direct support organization” of the school, writes Attorney Richard Mitchell. It “submitted to FAU a proposed budget that needlessly funds personnel to provide services that are redundant to service available from existing University personnel and departments, and diverts $400,000 from research purposes to pay for this litigation.”

FAU merely seeks to reduce redundant overhead and external expenses, thereby freeing up hundreds of thousands of dollars year after year to advance the Institute’s research and educational endeavors, Mitchell argues.  “This is not a hostile ‘takeover’ as the Foundation suggests.”

Sometime between now and the end of the year, a mediator will try to help FAU and the Foundation bridge the disagreement. If mediation fails, the lawsuit will proceed and a judge will ultimately decide who should control the tens of millions of dollars in endowment and license-plate funds.