Out of Nowhere: The Entrepreneur Behind a Huge Scholarship Gift

photo: Cory Woodruff/shutterstock

As the founder and majority owner of the beverage development company Flavorman, David Dafoe has one of the more unique CVs in a higher education philanthropy space increasingly flush with alumni cash.

And while his name may not ring a bell, that should change rather quickly: With his $30.1 million estate gift to Oxford, Ohio's Miami University College of Arts and Science, Dafoe has officially joined the growing group of higher ed mega-donors.

Born the small town of Pyrites, New York, Dafoe studied zoology at Miami before founding the Louisville-based private beverage consulting firm Flavorman in 1992. It soon grew to an international, full-service custom product-development and ingredient-supply company. 

Dafoe is active in the Louisville community and is currently on the Norton Healthcare Foundation Board, is a Miami University Community Outreach and Recruiting Programs volunteer, and an active member of the Kentucky Southern Indiana World Affairs Council. He was also a past member of the advisory board of the College of Arts and Science and the Alumni Association Board at Miami University.

Dafoe's recent gift, earmarked for scholarships for needy students, is rooted in personal experience. Without grants and scholarships, "I would not have been able to attend Miami," he said. "I want to offer those same opportunities to future generations of Miamians."

When you consider Dafore's CV in its totality, it points to a donor with an eye toward giving back to his alma mater. But to the tune of $30.1 million?

Ten years ago, Dafoe's gift would be an outlier. Mega-donors typically signal their intentions with a series of smaller gifts, strategically made across an elongated time frame. But things have changed. As huge gifts keep flowing to universities, particularly in regions once derisively called "flyover country," we're seeing more mega-donors arrive on the scene seemingly out of nowhere. 

Another example of this kind of "lighting-bolt philanthropy" comes to us from nearby South Bend, Indiana. While trustee Kenneth Ricci had provided the University of Notre Dame with previous support, including a $5 million for its marching band, few could have predicted his $100 million unrestricted gift to the school.

And therein lies another consequence of many of these unforeseen mega-gifts: When an under-the-radar donor lacks a deep publicly available record of giving, commentators like yours truly have to draw up a psychographic profile on the fly.

In the case of Dafoe, we can glean valuable insights based on some of his recent interviews.

Insight No. 1 should be pretty obvious, given the size of the Miami University gift. Having presciently tapped into the boutique spirits boom sweeping the country—he's been dubbed a "flavor architect"—Dafoe has amassed a small fortune. In 2015, Dafoe, who owns 75 percent of the company, told Forbes he expected Flavorman's revenue to jump to $14 million in the next 12 months, and that he makes "$125,000 a year, and I’ve had that salary for 10 years."

In fact, Dafoe said a potential buyer had offered to buy Flavorman for $20 million. He declined. "I’m not just going to sell and whisk my way off to the Caribbean and leave people here who have helped me build this business," he said. "I'm only interested in a purchaser who wants to come in and build the business."

Dafoe was also diagnosed with MS in 2004, and is a self-described ambassador for the Pfizer drug Rebif. It wouldn't be too far-fetched to envision Dafoe eventually giving big to health-related causes, especially given his seat on the Louisville-based Norton Healthcare Foundation Board.

We'll see what the future holds. Until then, here are some things that we know for certain.

First, Dafoe is the latest donor to put a college education within reach for needy students. (This is encouraging: The cost of attendance at Miami is $31,946 for in-state residents and $51,198 for out-of-state residents.)

Second, while donors keep the scholarship gifts flowing, tuition keeps rising and the student loan debt catastrophe continues to metastasize beyond anyone's wildest and most dire expectations. Despite the gravity of the situation, few donors are aggressively tackling the structural causes driving unrelenting and unsustainable tuition increases. This is understandable, given the complexity of the problem.

And so, at least for the time being, donors have concluded that writing a check or making an estate gift can have a more immediate impact for students in need.

Last but not least: Keep a close eye on David Dafoe. Having laid low philanthropically for most of his professional career, he's entered the ranks of higher ed mega-givers with a bang, forever indebted to the university that molded him into a wildly successful entrepreneur.

"The academic and social opportunities at Miami changed my life and shaped me as a person," he said.