Oil billionaire T. Boone Pickens’s $165-million gift to Oklahoma State University sports seven years ago, and his subsequent involvement in the athletic department’s financial moves, are a cautionary tale that demonstrate “the risks colleges take when they allow big donors to call many of the shots,” according to The Wall Street Journal.

Cowboy Athletics, the fund charged with investing and spending the money, lost 68 percent of its endowment value because it put the entire gift and additional assets into Mr. Pickens’ hedge fund, BP Capital, which took a significant hit in the 2008 market collapse.

Oklahoma State also spent $33-million on an unusual fundraising plan  engineered by Mr. Pickens by which the school took out life-insurance policies on aging alumni, and got nothing in return, the newspaper reports.

The liabilities of Cowboy Athletics now exceed its assets, and a major project started as a result of the gift—an athletic village with baseball, tennis, track, and soccer facilities, for which a neighborhood of 200 homes was razed—has stalled.

Mr. Pickens is paying off the endowment’s $84-million in loan obligations, and he provided a $35-million policy on his own life so that the university wouldn’t end up losing money from the insurance or investment plan. In an e-mail to the Journal, he said work on the athletic village is back on track and that delays in the project resulted from the 2008 crash.