Print Columns   |   Web Chats   |   Blog Archives   |  

Education Monday: Selling Off The Assets

Now Virginia's Supreme Court says Randolph College may not sell off its valuable paintings to try to claw its way out of financial crisis.

The struggling private, liberal arts college in Lynchburg--a good example of how most colleges are closer to the fiscal edge than to the unfathomable riches that Ivy League schools hoard--figures it can raise at least $32 million by auctioning off a chunk of its collection of 20th century art. But some alumnae, students and parents are seeking to get the courts to prevent any fire sale of the school's assets. For now, anyway, the court is indeed playing that role.

Randolph is far from alone in the Great College Sell-off. Most colleges, especially public ones, have few assets that they can easily sell to raise money to build their endowments or cover their operational costs. But as states have cut back on support for universities, and as many private colleges have found that the only way to attract students is to give them such huge discounts on the official tuition rates as to make it impossible to maintain services and staffing, administrators increasingly look toward art collections, radio stations and land as stuff they can sell. Public colleges generally don't have the ability to sell their land, so their options are even more limited.

Locally, at least a couple of colleges have looked toward their radio stations as potential sources of easy money. The University of the District of Columbia was forced by the city's congressionally-imposed financial control board to sell Washington's only jazz station; the money C-SPAN paid for the station went to the city, not the university. Columbia Union College in Takoma Park, a struggling Seventh Day Adventist college, this fall came right to the edge of selling its Christian-oriented radio station to Minnesota Public Radio before a rebellion by trustees and alumni forced the school to pull out of the deal.

But around the country, the most controversial sell-offs have been of art. Many rich alumni pass their collections on to their alma mater as a way of giving back--and avoiding big tax bills. Now the descendants of those alumni tend to get royally miffed when their dear old university decides to sell Daddy's gift to the highest bidder. Art curators don't look on the practice terribly favorably either:

As Suzannah Fabing, director of the Summer Institute in Art Museum Studies at Smith College, told the Chronicle of Higher Education, the trend toward sell-offs is "frightening. When a college professes to teach the liberal arts, its leaders should look at these art collections as a strong asset in their ability to do so. An art collection shouldn't be viewed as a cash cow."

Fisk University in Nashville is trying to sell a Georgia O'Keefe painting that could fetch $25 million for the struggling school. And Brandeis University is looking to unload 14 paintings that could bring in $5 million or so.

Inevitably, these efforts to raise cash lead to lawsuits, particularly from angry alumni who don't like to see their gifts be cast away by administrators more interested in making ends meet than in preserving great (or not so great) art. Courts tend to struggle over whether colleges are really eternally bound to fulfill a donor's highly specific wishes. And in truth, it's really not the courts' business. These matters ought to be left to the colleges, which, in turn, should show some responsibility both to the ideals of learning and to their ability to keep at their work. There will be times when selling off assets makes sense; the Columbia Union College example is a good example of a school that faces really rough going and could, by selling off an asset that has little to do with its educational mission, improve both the college's fiscal picture and the quality of broadcasting in the region.

And there are times when a selloff makes no sense: Neither UDC nor the overall community got anything out of the sale of that school's radio station, an asset that served an enormous public value and helped students as well.

In Randolph College's case, there are legitimate questions to be asked about whether the college is worth saving. Its accreditation was threatened for a time, it had to drop its historic status as a women's college this year, and it still faces a difficult financial future, even if it ultimately is permitted to sell the paintings. Not every college is necessarily a permanent institution. Certainly, the need for colleges will only grow with time, and that means there's likely a buyer out there who might turn Randolph into a success with a different concept.

But maybe Randolph's own administration can make the necessary pivot. And if selling off some paintings is the way to get there, fine. There's nothing inherently sacrilegious about selling art. And a gift from an alumnus is just that--a gift. If you exchange or regift a present from a friend, that in no way diminishes your gratitude to that friend for the generous gesture. As for the alumni, too bad--once you give a gift, that's the end of your part of the transaction. A college that willy-nilly sells off its gifts won't get as many such donations in the future, and that's the market at work. But a college cannot be prisoner to the whims of its donors. When you give something away, it's not yours anymore.

By Marc Fisher |  November 26, 2007; 7:23 AM ET
Previous: Redemption Roulette: I-Man Back In, Greaseman Still Out | Next: At Long Last, The Peace Talks Annapolis Craves

Comments

Please email us to report offensive comments.



Marc-

I disagree with you regarding the donor's right to attach "strings" to their gifts. They have every right to require that the recipient not hock their donation. Donor advised funds are growing in popularity because people are tired of their donations being squandered by the charity.

As far as universities struggling financially that is another issue. Schools who give their students an excellent education AND memorable college experience have no problem raising money. These graduates of these struggling schools clearly don't feel a positive connection to their alma mater (Latin for nourishing mother by the way). Either that or these schools need to do a better job with fundraising.

I would not villainize the donors here.

Posted by: JMU Grad | November 26, 2007 9:39 AM

If I recall correctly, UDC's radio station was sold to it for $1 by Georgetown years ago out of spite due to some disagreement between Georgetown's president and the radio station. Talk about NOT doing the best for the university...

Posted by: bb | November 26, 2007 9:43 AM

Marc:

Your assumption that donors give art to colleges and universities for self-aggrandizement or tax breaks is hardly fair. Donors acquire original works of the imagination because they inspire thought and emotion, and wish to share the enjoyment of them with future generations. Bequests of art almost always indicate this. If recipients cannot honor this wish they should not accept gifts of art in the first place.

In recognition of the shame inherent in dishonoring art bequests, the practice of selling off such art is called "de-accessioning" by practitioners. The doublespeak cannot disguise the fact that the action denies the experience of original art from students and the public. Any school that is not a diploma mill knows this is wrong.

Posted by: Mike Licht | November 26, 2007 10:16 AM

Marc-

You neglect to point out that the most valuable painting in the Maier Museum's collection, "Men of the Docks" by George Bellows was acquired directly from the artist with funds donated by the college, the alumnae and the Lynchburg community. The intent of the purchase was to educate RMWC women as well as the students and residents of the surrounding community. Selling the painting for funds to be used just for the college is a slap in the face to all who originally contributed to the acquisition.

Posted by: Diana Keating-RMWC '97 | November 26, 2007 10:44 AM

If the schools were selling their assets because of legitimate financial issues, I'll go along with it. But, if they are doing so so they can continue to increase faculty salaries by huge percentages every year, and can continue to retain bloated administrations, then no. Colleges are as bad as politicians at spinning things to their own benefit. And we are just gullible enough to believe them.

Posted by: jj | November 26, 2007 10:59 AM

"Men of the Docks" was not the gift of a wealthy donor. In 1920, a group consisting not only of R-MWC students, faculty and alumnae, but also of other Lynchburg residents, formed the Randolph-Macon Art Association of Lynchburg, "for the purpose of establishing at the college a permanent collection" of art. George Bellows, the artist, agreed to sell them his "Men of the Docks" for far below market value, saying that "artists cared less for money than for the placement of their work." The painting was bought with many, many small contributions from people who wanted to see an art museum established in Lynchburg, Virginia. To sell it away from Lynchburg now is to break faith with the town.

Moreover, the only reason "Randolph College" faces a difficult financial future is because of administrative incompetence.

In the year before it went co-ed, R-MWC had an ample endowment. NACUBO listed it as 292nd on a list of 765 four-year colleges and universities in the U.S, and most of those other schools had thousands of students rather than hundreds to look after with that endowment.

It was not even facing declining enrollment; its enrollment had stayed more or less the same since 1970, and indeed, if you ignore the peak years of the baby boom, more or less the same since 1935.

With decent management, there is no reason the school could not have thrived as a woman's college. And it certainly has no need to take such a drastic step as selling the art now.

Posted by: Meredith Minter Dixon, R-MWC 1984 | November 26, 2007 11:25 AM

The real story here isn't that "not every college is necessarily a permanent institution," it's that a local college with a historic past and great potential for the future is being run into the ground through administrative mismanagement. Alumnae dispersed across America--themselves living testaments to the value and effectives of an RMWC education--are coming together to fight and have already strung together several court victories with regard to the art and the coed switch. At the same time, all of the fanciful predictions that the administration and Board of Trustees made this time last year have, one by one, turned out to be false.

Posted by: Real Story | November 26, 2007 1:04 PM

Fisk's endowment? $7 million -- R-MWC's? $153 million. That doesn't make the sale of art ethical at Fisk, but at least they do appear to be struggling financially. In 2006, a mere month before the Board announced the College was going co-ed, a five-year, $104 million capital campaign was successfuly completed. All of those donors gave to the charitable purpose of R-MWC "to educate women in the liberal arts." So is it right for a college to take a $153 million endowment, a $100 million art collection, and other assets that were accumulated under one charitable purpose (educating women) and use them for another without first proving that the original purpose cannot be met? What if you gave money for a charity in DC whose stated purpose when you donated was to help the homeless in DC and the charity turned around and used your money to build houses for poor people overseas. Still a nice charitable purpose -- but not the purpose to which you donated. Wouldn't you see something wrong with that behavior? You have the same situation at R-MWC/Randolph College - and the art lawsuit to which you refer is just a small part of a larger charitable trust lawsuit before the Supreme Court of Virginia. That is where the really interesting story can be found.

Posted by: R-MWC Alumna | November 26, 2007 1:21 PM

I'd feel sorry for Randolph Macon, except for the fact that Hampton Sidney has NO problem with all private funding.

Posted by: GM123 | November 26, 2007 1:41 PM

Judging from the RMWC posters here, it looks like good 'ol Marc is keeping his "bogus column through poor / inadequate research" batting average up. At least he's consistent.

Posted by: Claudius1 | November 26, 2007 2:19 PM

GM123, what are you talking about? RMWC was/is a private school just as much as Hampton-Sydney is. They are not and have never been a state school.

RMWC didn't go coed because of money. It had plenty of money. It went coed because of trustee mismanagement.

Posted by: Hmm... | November 26, 2007 3:32 PM

Marc--That's a nice little slap you indirectly took at WGTS 91.9 FM, owned by Columbia Union College, by saying that selling the station would improve the quality of broadcasting in the region. As a Catholic family with small children, we are very happy and blessed to have this station constantly on in our cars, as many of our friends do. We never have to worry about the violence and smut that other radio stations peddle--we can address those topics at the dinner table. WGTS broadcasts upbeat music with a positive message--we gladly welcome this "alternative" format.
You really shamed yourself with this bit of condescension.

Posted by: WGTS fan | November 26, 2007 4:44 PM

The comments to this entry are closed.

 
 

© 2010 The Washington Post Company