Sale of mineral rights brings $944K to UUA
Lois and Ken Carpenter's gift of mineral rights, once thought worthless, is windfall to UUA.
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.
“There’s nothing there,” said Lois Carpenter, whose father, an independent oil man, bought the land at a tax sale decades earlier. “It is flat, hot in the summer, dusty, dirty, with very little of anything growing on the top soil. You look at it and think it’s totally worthless—and it seemed worthless for many years, even underground.”
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.
Last spring, Ken Carpenter, chair of the UUA Finance Committee from 1995 to 2000, had urged the board to sell the rest of its minerals rights on the land (it had sold most about 10 years earlier), and suddenly, the UUA is $940,000 richer. A loan the UUA planned to take from its endowment this year to cover a revenue shortfall is no longer needed.*
“We are just really pleased and excited that this happened to bring this kind of money to the UUA,” said Ken. “Nothing has been more important in our lives, other than our marriage and family, than being Unitarian Universalists. The Principles and Purposes and litany recited weekly—‘Love is the doctrine of this church and the quest for truth is its sacrament’—define who we aspire to be individually and provide a vision of a better world. We believe that our city, state, and nation would be a better place if more people knew of and shared our views on governance, justice, peace, and love.”
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.
“It’s humorous to think you could give minerals to somebody and value them at $100,000 and be worried if we’re ripping off the people by putting that value on it,” said Lois, “and then it turns out to be so profitable.”
Some people have asked them if they’re troubled they gave away something that’s proved so profitable. Ken said, “The answer is, ‘Hell no!’ We’re delighted.”
Added 10.29.14: “I consider the lease and sale of the 57 mineral acres in Section 11 to be a very significant part of the UUA divestment from fossil fuels,” Carpenter said after this story was first published, in response to readers concerned that the UUA was profiting from fossil fuel extraction. “The UUA no longer owns any interest in these minerals. I believe the UUA and our family have acted in the best interests and in the spirit of the General Assembly to divest of investment in fossil fuels.”
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). See sidebar for links to related resources.
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.
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