Harvey & Bernice Jones Trust ‘Frost' Bitten?

by John Haman  on Monday, Mar. 31, 2014 12:00 am  

Jack Frost was on hand when Bernice Jones created the Bernice Young Jones Educational Trust for Family & Community Studies in October 1995.

A letter from the KPMG Peat Marwick accountant, which was filed with the trust’s 1993 tax forms, instructed Frost to publish the availability of the tax return in the Arkansas Democrat-Gazette, but the words had been marked through with a red pen and “North Little Rock Times” handwritten out beside them.

The Harvey & Bernice Jones Charitable Trust 2, a much smaller sister fund whose assets have mostly fluctuated between $700,000 and $800,000 since 1990, does not provide a salary to Frost. The legal ads for Trust 2 were moved from the Arkansas Democrat-Gazette to The Times in fiscal 1994.

Shortly after the announcement in April that Frost was no longer working with the Springdale philanthropist, Hendrix College officials confirmed that a planned campus center to be funded by Mrs. Jones and named for Frost, one of the college’s trustees, would be delayed. Helen Plotkin, a spokeswoman for Hendrix in Conway, says Mrs. Jones confirmed she would fund the center, but a timetable wasn’t established.

“We’ve put the project on hold until we receive the funding,” says Plotkin, adding that she wasn’t sure if the center still would be named for Frost. Construction would have started in June if not for the announcement.

Company Sales Top $84 Million

The Joneses likely had already amassed a fortune when their Springdale-based trucking company, Jones Truck Lines Inc., was sold to Sun Co. in 1980 for the equivalent of nearly $56 million. But with the riches earned in the sale, coupled with $27.5 million Mrs. Jones made off the 1996 sale of the Springdale bank holding company Financial Investment Corp., Mrs. Jones’ philanthropic coffers clearly top $84 million — and that’s an extremely conservative estimate, based only on the sectors of Mrs. Jones’ financial life known to the public, and not including any investment returns she may have made on the principal. The Joneses have no children and no apparent heirs.

Of that $84 million, Mrs. Jones has given away at least $57.8 million to colleges, hospitals, religious organizations and other socially minded causes in the state. Some of the gifts, like the $2.35 million she has given to the Baptist Boys Ranch in Harrison, have largely escaped public notice, while others were announced at news conferences with fanfare but without financial specifics.

According to tax forms filed by the trust, the private foundation had $58.3 million in fair market value assets at the end of fiscal 1992. That year, the trust gave $11.1 million to charities and lost $6.1 million in the stock market — $6.6 million of it (they made money on some stocks) on Sun Co. stock alone. The Joneses ended up with about $45 million in Sun stock when they sold Jones Truck Lines to Sun in 1980.

At the end of fiscal 1993 the trust had $42.3 million in assets, as Mrs. Jones gave $7.7 million to charity. At the end of 1994 the trust had $79.1 million, having given away $23.5 million. That year, the trust spent $535,329 on interest, paid $1.6 million in “other liabilities” and took out a $20.3 million mortgage to make speculative investments.

“The logic was you can earn more money in the equity markets than the cost of borrowing,” says Carver, a close friend of Mrs. Jones.

Carver says the foundation’s debt has “been reduced substantially ... more than 50 percent” from its peak, but he wouldn’t reveal how much the foundation owed at that point. The trust is still invested, he says, and he and Mrs. Jones have budgeted an 8 percent return for the current fiscal year.

Accountants for the trusts have asked for time extensions to file their foundation-related income tax returns for fiscal year 1995.

 

 

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