Since first writing about the proposed name change at Paul Smith’s College of Arts and Sciences in Upstate New York, many people have written to me and provided more of the details surrounding this situation.
The college wants to make a change so that it can incorporate the name of a new donor, becoming Joan Weill-Paul Smith College. Joan and Sanford Weill have pledged a gift of $20 million. Many have written to me indicating that this is not a cash gift of $20 million, but actually will be paid like an annuity over an extended period of time. I have heard as long as 25 years. But the issue is not about the money.
Whether the donation is going to be made in one check or 25 is irrelevant to the central philanthropic issue. That issue is that the gift instrument of the original donor who established the college is being ignored so easily. The New York State Board Of Regents has already given its blessing on the name change. The New York attorney general has expressed no objection to the name change as noted in paragraph 8 of the college’s petition to the court. This is in spite of the fact that in paragraph 6 of that same petition, it is noted that pursuant to New York law, the AG represents the beneficiaries of dispositions for charitable purposes.
This is the first name change for which I have seen a petition to the court. This is the way these things are supposed to be done and I applaud the college for following proper procedure. As I wrote in my post about Lincoln Center changing the name of Avery Fisher Hall, the New York AG and the New York Supreme Court were not involved at all. The Fisher family, the most likely litigants, were simply bought off.
Take a look at the Paul Smith’s College petition to the Franklin County Supreme Court in Malone, New York. There is much to learn from this well prepared petition. Note also that if you would like to weigh in on this matter, you can write to Judge Ellis at his office at 36 Lake Street (P.O. Box 900) in Tupper Lake, New York, 12986. I wrote to him, so feel free to join in.
The petition is very simple. It seeks an order from the court to modify the restrictions on a bequest by Phelps Smith. The petition claims that the restrictions contained in the gift from the Estate of Phelps Smith have become impracticable and wasteful. Donors frequently make perpetual gifts and if the perpetual restrictions contained in those gifts eventually become impossible to adhere to, the courts are asked to modify the restrictions. The courts should do so in a manner that maintains the original purpose of the gift as much as possible.
In this case, Phelps Smith left land and money in his estate “for the creation of an institution of higher education… with the direction that the institution be forever known as Paul Smith’s College of Arts and Sciences.” Paul Smith was Phelps’ father.
Paragraph 12 of the petition quotes the New York law that grants the Supreme Court the authorization to grant the requested change to the terms of the bequest. The court should make changes when circumstances have changed so much since the execution of the gift instrument that it is now impracticable or impossible for a literal compliance with the gift terms.
Starting in paragraph 13, the petition attempts to make its case that changed circumstances since the founding of the school now make it impossible for the college “forever [to] be known as Paul Smith’s College.” What the petition claims is that the college needs the money from this new donation so badly (with the stipulation that the donor wants her name to appear as part of the college’s name) that it is impossible to continue unless Phelps Smith’s wishes are set aside.
In a recent article, Forbes performed a financial analysis of all of the private colleges in America. Paul Smith’s College was found to be as financially stable as many well-known and larger institutions. Among these are Marquette University, Drake University, Emmanuel College, Iona College and many others.
The petition claims that the Phelps Smith restriction “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.” Come on now! Should I be suspect of this claim given that the offered donation came before the claim occurred to the school’s board? The petition follows the law. That is worth noting here. But I believe the petition is flawed in its presentation and deserves to be rejected by the Supreme Court.
I also don’t believe that I should be the one asking these questions. This is the job of the New York attorney general. He is supposed to be keeping an eye on the charities, ensuring that they comply with the restrictions of the gift instruments they have accepted. Phelps Smith put his faith in the office of the attorney general when he made his gift, accepted by the college, stipulating that the name of the college “forever be known as Paul Smith’s College of Arts and Sciences.”
The case should have the college on one side and the AG on the other side, with the court deciding the issue. In some respects, I believe that if the AG did not object, there was no reason to go to court. Hopefully, the judge will not see it the same way and will do the right thing, even if the AG did not.
Next, I want the Supreme Court to ask Lincoln Center why it was not asked if Avery Fisher’s gift instrument could be overturned without the court’s blessing. As I asked before, do the children of Mr. Fisher have the ability to sell the naming rights back to Lincoln Center? The court should also ask the AG’s office, which is monitoring the legacy of Mr. Avery Fisher.