PEC Update, August 22, 2007

Yesterday Randolph College filed a Complaint in the Virginia Circuit Court in Lynchburg to allow the sale or "sharing" of art purchased as part of the Louise Jordan Smith Trust. The college's filing can be found here. The art purchased by the trust includes some of the Maier's more well-known works such as Thomas Hart Benton's "Preparing the Bill," Mary Cassett's "Sketch of Mother and Daughter Looking at Baby," Edward Hopper's "Mrs. Scott's House," and Georgia O'Keeffe's "Yellow Cactus." According to the College's Complaint, the 35 works purchased with funds from the Smith trust are valued at more than $40 million.

The Complaint alleges that the College has been forced into considering the sale of art because of the warning issued by the Southern Association of Colleges and Schools ("SACS") last December. Specifically, the Complaint states that SACS "placed the College on 'warning' after finding that the College was spending its endowment at an unsustainable rate." Frankly, this is not an accurate portrayal of what the SACS warning entailed.

SACS did identify issues with the College's management of its resources. However, SACS clearly did not advocate nor require the college to engage in a sale of its priceless and irreplaceable educational assets as a remedy for those issues. The decision to sell the art is solely a decision of the Board of Trustees and it is disingenuous to blame SACS for this action. The potential art sale goes far beyond the scope of the SACS warning, and is clearly the least responsible of all the actions available to the College in response to that warning.

SACS actually placed the college on warning for failing to meet a core financial requirement of SACS. That core requirement states that an institution must have "a sound financial base, demonstrated financial stability, and adequate physical resources to support the mission of the institution and scope of its programs and services." As you can no doubt imagine, there are any number of ways to demonstrate financial stability. The most obvious is to cut expenses and live within a realistic budget. As the college's own consultant Campus Strategies noted in a May 2007 report, "the SACS financial assessment process is very subjective" and there "is no specific formula that can be used to demonstrate financial viability." In December, the college stated that SACS cited high tuition discounting, deferred maintenance, and operating deficits as areas of specific concern. Each of those concerns can be addressed without selling art.

Adding $40 million to a $140 million endowment by breaking an almost 80-year-old trust set up by a beloved faculty member to "form a permanent collection of art" does not appear to address tuition discounting or deferred maintenance. Arguably, adding substantial funds to the endowment will immediately decrease the endowment spending rate (if the trustees do not simply spend more money) but clearly this does not address the underlying problem: the college has simply failed to live within its means and has continued to run at a deficit. Given that only four private colleges in Virginia have larger endowments than R-MWC, others are well able to maintain their SACS accreditation with smaller endowments. SACS is not the motivating force here to sell the art.

Well in advance of the SACS review, trustees spoke of selling the art or monetizing it in some way. It was discussed on campus certainly as early as the end of the 2006 academic year, the faculty voted on a resolution to protect the art in August 2006, and articles about the art appeared in the Lynchburg press – all before the October SACS review or the December 2006 "warning."

In the College's motion they argue that Louise Jordan Smith's general intent was to benefit the College and that when she wrote her will she did not foresee the financial problems the College would face in 2007 or the monetary appreciation of art purchased by her gift. They imply that if she were alive today, she would countenance the sale of the art to bail the College out of its alleged financial problems.

We don't presume to know what Miss Smith would say today, but it is crystal-clear what she said in her will in 1928. She established a trust for the Art Department of Randolph-Macon Woman's College (not Randolph College) to "form a permanent collection of art." She specified that all purchases had to be approved by two "well recognized expert judges of pictures and works of art" in order "to keep a high standard of excellence in the things that go into the said collection." She instructed the trustee that she appointed – The Lynchburg Trust and Savings Bank (not the Trustees of the College) – to carry out her wishes. In the event that the bank became defunct, she stated that the trust should be administered by the trustees of Randolph-Macon Woman's College as other endowed funds, with the income to be used for the stated purpose – purchasing quality works of art to "form a permanent collection of art." Nowhere does she provide for the sale of art purchased through the trust for the "permanent collection of art."

We hope that this issue might help you to understand better the scope of the Charitable Trust suit that is currently awaiting oral arguments on appeal to the Supreme Court of Virginia. The art in the Louise Jordan Smith Trust is just one small part of the assets that PEC has fought to protect throughout all of the past year. All of the assets of Randolph-Macon Woman's College -- the art in the Smith Trust; the rest of the art in the Maier like the Bellows "Men of the Docks," the endowment, the campus itself and, indeed, all assets of Randolph-Macon Woman's College – were purchased through the donations of people like Louise Jordan Smith, people who believed in Randolph-Macon Woman's College and its mission to educate women in the liberal arts.

Randolph College is not the same institution as Randolph-Macon Woman's College and it does not have the same mission. The trustees of the college have taken the donations of thousands of people just like Louise Jordan Smith and are now using the funds for a purpose far different than those donors intended. While the trustees have realized the necessity of petitioning the court with regards to breaking the Louise Jordan Smith Trust, they see nothing wrong with using all of the accumulated donations that were given to Randolph-Macon Woman's College for the purpose of educating women to support the new coed Randolph College. The charitable trust lawsuit that is currently in appeal before the Supreme Court of Virginia seeks to address this wrong and force the trustees to do what they should have done all along – petition the court and explain why it is impossible, impractical, or wasteful to continue as Randolph-Macon Woman's College before using the donations of thousands of donors for a different purpose. Instead, they have taken the charitable assets of the college and used them to further their personal vision for a coed institution.

So what can be done? The hearing in the charitable trust appeal is next week, August 29. Like the student contract case, we do not expect to receive a decision for several weeks. In the meantime, the college clearly will proceed with its plan to break the Louise Jordan Smith Trust. Some of the other works, like the Bellows "Men of the Docks," that are not part of the Louise Jordan Smith Trust, are also in danger of being sold to fund Randolph College.

We believe that it is in the best interest of Randolph-Macon Woman's College to maintain all educational assets, not to keep squandering them to fund the misguided experiment that is Randolph College. Thus, the PEC Board has agreed to pursue whatever legal avenues are available to protect the assets of Randolph-Macon Woman's College. This will likely involve additional legal actions above and beyond the two lawsuits that are being funded. We are prepared to assist any plaintiffs who would like to intervene in the College's action to oppose the sale or sharing of the paintings in the Smith trust. We need your help.

As you are aware, legal representation is not free. Moreover, the College has chosen to use attorneys from the firm of McGuire Woods in Richmond as its counsel in this matter, one of the three largest law firms in Virginia. Accordingly, we have asked our counsel, Troutman Sanders (also among the three largest firms in Virginia) to prepare an estimate of the cost to support an intervention to preserve the Louise Jordan Smith Trust. We do not have that estimate yet, but we know it will be costly. In response, we have established a restricted legal defense fund for pursuing the Louise Jordan Smith matter and any other actions by Randolph College's Board of Trustees to sell art assets of Randolph-Macon Woman's College. As with the general PEC fund, any funds raised for this purpose that remain after defending the art assets will be donated to Randolph-Macon Woman's College when we win, or to support other women's colleges if our challenges are unsuccessful.

Donations to the PEC Art Defense Fund can be mailed to:

Preserve Educational Choice, Inc.
P.O. Box 29612
Richmond, VA 23242

Please make the check payable to "Preserve Educational Choice, Inc." and note on the check that it is for the "Art Defense Fund."

As always, we will keep you updated on the progress of the two appeals before the Supreme Court of Virginia as well as further actions by the Randolph College Board of Trustees to sell the art at the Maier Museum. Recent articles about the college, including articles from the Lynchburg News & Advance and the Chronicle of Higher Education about the art issue can be found on the PEC website here.

Please continue to write letters to the editor, letters to the trustees, letters to the new president (he officially started one week ago Wednesday), and letters to faculty - keep up the pressure. Let the trustees know that you still care about Randolph-Macon Woman's College and that you are willing and able to support the woman's college if only given the opportunity to do so. There is no need to sell educational assets if the fully engaged alumnae of the woman's college are allowed to bring our talents and gifts to bear on behalf of our alma mater.

Vita Abundantior,

PEC Board

Gail Ballou (R-MWC '64)
Carol Curcio Lang (R-MWC '68)
Diane U. Montgomery (R-MWC '85)
Chantel Sheaks (R-MWC '91)
Anne Yastremski (R-MWC '05)

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