It's one thing to gamble with an endowment, that can be couched as investment, and another to borrow money to gamble with and endanger the operational budget of the non-profit you are overseeing.
That may well violate the fiduciary duty of prudence under the New York Prudent Management of Institutional Funds Act.
I'm sure most endowments use some margin, but there are different leverage ratios. The Harvard endowment has since eliminated net levage, but before the crisis they were levered to 105%. The borrowing that Cooper Union did amounted to 30% leverage.
Further each the duty of prudence has to be measured against each sitution individually, according to the eight factors listed in the law:
(1) general economic conditions;
(2) the possible effect of inflation or deflation;
(3) the expected tax consequences, if any, of investment decisions or strategies;
(4) the role that each investment or course of action plays within the overall investment portfolio of the fund;
(5) the expected total return from income and the appreciation of investments;
(6) other resources of the institution;
(7) the needs of the institution and the fund to make distributions and to preserve capital; and
(8) an asset’s special relationship or special value, if any, to the purposes of the institution.
Which is not to say that other boards aren't also violating their duties of prudence, but an egregious case is a good place to start.
That may well violate the fiduciary duty of prudence under the New York Prudent Management of Institutional Funds Act.