Judge Rejects Request by Paul Smith’s College to Change Its Name

By BENJAMIN MUELLER and KRISTIN HUSSEY OCT. 7, 2015

In the rarefied world of multimillion dollar gift-giving, Paul Smith’s College, named for a 19th-century hotelier and tucked in the forests of northern New York State, carried little cachet. So when Joan Weill, the wife of the Wall Street

Paul Smith College Entrance

Joan Weill, the wealthiest benefactor of Paul Smith’s College, made an offer of $20 million with the requirement that the school change its name to Joan Weill-Paul Smith’s College. Credit Nancie Battaglia for The New York Times

billionaire Sanford I. Weill, proposed a $20 million gift that would lift the struggling college’s fortunes, its officials saw national prestige on the horizon.

Mrs. Weill’s only condition — one that experts say is becoming more common among major donors — was that the institution become Joan Weill-Paul Smith’s College.

But a state judge rejected that change, ruling in a decision released on Wednesday that Mrs. Weill’s money did not give the college license to violate a provision in its founder’s will that enshrined his father’s name on the college in perpetuity.

The dispute over the name is one of several such controversies that have reverberated through philanthropic circles in recent years, including the transformation of Avery Fisher Hall in New York into David Geffen Hall and the recasting of the Miami Art Museum as the Jorge M. Pérez Art Museum of Miami-Dade.

 The Joan Weill Adirondack Library at Paul Smith’s College. Mrs. Weill sought a bigger role at the school by donating $20 million. Credit Nancie Battaglia for The New York Times

The Joan Weill Adirondack Library at Paul Smith’s College. Mrs. Weill sought a bigger role at the school by donating $20 million. Credit Nancie Battaglia for The New York Times

The Joan Weill Adirondack Library at Paul Smith’s College. Mrs. Weill sought a bigger role at the school by donating $20 million. Credit Nancie Battaglia for The New York Times

And yet it is one of the few cases of its kind to yield a judicial ruling, experts said, putting the college at the center of a nascent legal debate over how long institutions must adhere to restrictions set at their founding. Uncertainty about such rules looms ever larger over groups that have grown reliant on big gifts that often come with strings attached.

The decision sent a strong message to other organizations that perpetual naming agreements would not be lifted easily, and it left the fate of Mrs. Weill’s gift in doubt. It also brought an end to months of sometimes vitriolic debate at the college, in Paul Smiths, N.Y., as the case provoked class resentments and clashing expectations about the very purpose of philanthropy.

“This decision is a big, big deal,” said Doug White, an adviser to philanthropists and nonprofits who teaches at Columbia University. “It’ll help define what the court system thinks of the idea of changing the name of an organization like this.”

The college, the only four-year institution in the six-million-acre Adirondack Park, was created in 1937 with a bequest from Phelps Smith, which required that it “be forever known” as Paul Smith’s College of Arts and Sciences, in honor of his father. Its student body of about 1,000 doubles the area’s population.

It also attracted the notice of Mrs. Weill. She and her husband owned a home nearby, and she fell in love with the idea of a school that helped students who were the first in their families to attend college “change their lifestyle”, she said in an interview around the time her gift was announced. The college is best known for its hospitality and forestry programs, and nearly all of its students receive some form of financial aid. “I felt, ‘O.K., I can make a difference here,’ ” she said in the interview.

Like many schools in remote locales that charge high tuition, Paul Smith’s has struggled with declines in enrollment and revenues, trends driven by shifting student demographics, the college argued in court papers.

The college operated at a loss in 2013, and over the last two decades, more than 85 percent of its donations were from fewer than 150 people, almost all of whom were not alumni. It came to lean in no small part on the largess of Mrs. Weill and her husband, who donated almost $10 million to help pay for a new library and student center, both of which were named for her, and also raised nearly $30 million from other donors. (The Weill name also adorns a medical college and a recital hall in New York City.)

Mrs. Weill sought to extend her reach with the $20 million gift, announced in July, which college officials cast as a lifeline that could allow them to recruit students nationally and draw more donations from the couple’s wealthy friends. The college argued in court papers that it in order to consummate the gift, it needed to undo the century-old naming restriction, which it said “nearly fatally impedes the ability of Paul Smith’s to seek large gifts from a single donor in order to make the investments it needs to remain viable.”

 Joan Weill in 2012. Credit Cindy Ord/Getty Images


Joan Weill in 2012. Credit Cindy Ord/Getty Images

Justice John T. Ellis of State Supreme Court in Franklin County disagreed. State law says a court can change the rules attached to a charitable gift only if complying with them has become “impossible or impracticable.” After reviewing years of financial records as well as the college’s $30 million revitalization plan, he concluded that the college had not offered enough evidence to prove it would not survive without a name change.

“The petitioner falls far short of showing that its name is holding the college back from being a shining success both in enrollment and in producing successful college graduates,” Justice Ellis wrote. “Significantly, Paul Smith’s has failed to demonstrate the college cannot operate effectively within that changing demographic absent the requested relief.”

The ruling appears to complicate the college’s path to financial stability, jeopardizing its role both as an economic driver and a source of pride and identity in the rural northern part of the state.

The college’s president, Cathy S. Dove, who pushed for the change alongside the board of trustees, said the college was considering its options.

“While we are disappointed in the court’s decision, the board of trustees and I truly appreciate the enduring connection our people feel to the college and our traditions,” she said, apparently referring to alumni reaction.

Reached by phone on Wednesday, Mrs. Weill declined to comment on the decision. It was not clear whether she would go forward with her donation. A spokeswoman for the college, Shannon Oborne, said, “That’s an area that we’re really not fully prepared to talk about right now.”

Some students cheered the decision; others had recently expressed concern that the college needed money to educate students from low-income families.

“The name means a lot to people who come here,” Anthony Pernisi, a senior who collected 300 signatures from students opposed to the change, said on Wednesday. He and others said the resistance was to the name change alone, not to the college’s largest donor. “I don’t feel like it was a fight or a war against one side or another,” he said.

 A display at the college bookstore in the Joan Weill Student Center, another campus building paid for by the Weills. Credit Nancie Battaglia for The New York Times

A display at the college bookstore in the Joan Weill Student Center, another campus building paid for by the Weills. Credit Nancie Battaglia for The New York Times

A display at the college bookstore in the Joan Weill Student Center, another campus building paid for by the Weills. Credit Nancie Battaglia for The New York Times

The reaction had been somewhat stronger among alumni, who had said in scores of online posts and public comments that the proposed change undermined the college’s integrity and called into question Mrs. Weill’s motives as a philanthropist.

In comments submitted to the state attorney general’s office, which oversees nonprofit organizations and had to approve the college’s request for a name change, graduates described themselves as a scrappy lot who tended to dirty their hands in the course of their work. They said they did not understand why Mrs. Weill felt she had to attach her name to the gift.

“The petition not only fails the truth test, the philanthropists fail the good-will test,” a 1980 alumna, Sheila Strachan, said in an Aug. 12 email to the attorney general’s office.

Philanthropic experts and advisers said Mrs. Weill’s stipulation reflected the increasingly transactional nature of philanthropy, as institutions once named for people accomplished in their fields accepted that using a donor’s name was the only way to guarantee financial solidity.

While many attribute such requirements to ego, “I think that’s too simplistic,” said Charlie Brown, who has raised money for Johns Hopkins and Stanford’s medical school.

“There’s a natural human desire to leave behind some trace that we’ve had an existence here and that it mattered,” he continued.

Others said the anger expressed by those connected to Paul Smith’s was a sign of things to come, as development officers turn more and more attention to very wealthy donors, at the expense of more modest gifts.

“Philanthropy is becoming de-democratized in the sense that there are more and more large gifts,” said Mr. White, director of a master’s program in fund-raising management at Columbia. “That demand is going to become more and more prevalent.”

The judge’s decision about Paul Smith’s, he added, offered something of a road map as institutions tried to undo perpetual name agreements for the first time. It also, he said, served as a warning about making new naming promises, as the leaders of Lincoln Center did this year in pledging to preserve their concert hall’s new name, David Geffen Hall, forever.

“We’re treading on fairly fertile ground,” Mr. White said, “and this decision will start the process.”

 

Source: http://www.nytimes.com/2015/10/08/nyregion/judge-rejects-paul-smiths-colleges-request-to-change-its-name.html?_r=0

 

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning. She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about. Annino recently released her new book, “It’s More Than Money, Protect Your Legacy” available at Amazon.com. To download Annino’s FREE eBook, Estate Planning 101 visit, http://www.patriciaannino.com.

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