Thursday, October 1, 2015

Naming "Rights" - with two updates

First, an apology to any of my blogees who might have wondered where I have been. The quick answer is that I took August and September off.

In August, The New York Times reported that  Paul Smith's College in the New York Adirondacks region had been offered $20 million IF it changed its name to include the donor's. It would be re-named Joan Weill-Paul Smith's College.

Certainly there are plenty of examples of parts of institutions, stadiums,  professorships, buildings, even restrooms (see my "Blog Milestone" 12/3/14 in Archive)  being named in honor of a donor. The most recent and dramatic example was Harvard's re-naming its engineering school in honor of a $400 million gift -  thus the somewhat awkwardly named Harvard John  A. Paulson School of Engineering and Applied Sciences. But $400 million is $400 million, even to a university whose endowment, as of June 30, was valued at  $32.7 billion.

But I am hard-pressed to think of an example of a entire nonprofit institution's name being refigured as the result of a gift. We all know of universities being named at the outset in honor of a donor   (e.g. Harvard, Yale and Stanford). The distinction of this story is the public acknowledgment  that the $20 million gift to Paul Smith's College is conditional on the college being thus re-named.

Before I take to my soapbox. let's look at the players. Paul Smith's is a four year college with 1,000 students located on the shore of Lower St. Regis Lake in New York's huge Adirondack Park. The student body doubles the population of the rural community where it's located. It was founded in 1937 by Phelps Smith, with a gift of land (50,000 acres) and funds ($2.5 million),  and named in honor of his father, Paul Smith, a famous local hotelier. The college is well known for its programs in forestry and hotel management.

Joan Weill is the wife of Sanford ("Sandy")  I. Weill, the billionaire former head of Citigroup. The Weills, based in New York City, have property in the Adirondacks. Mrs. Weill  has been a long-time supporter of Paul Smith's and has served on its board for 19 years. The Weills have given millions to the college. A new student center and library are named for her. The couple are well-known philanthropists.

As required by law, the college petitioned the state (Board of  Regents and the Attorney General's Office) and the State Supreme Court to allow the name change. The reason: the will that bequeathed the property and funded the founding of the college required that  it  be "forever known" as Paul Smith's College. The state agencies have indicated they have no objection to the change.  A ruling from the State Supreme Court is pending.

In its filings the college cited that the reason for its wishing to accept the naming condition is financial. It operated at a $2 million deficit last year. Its endowment is small ($27 million), its tuition high. The college acknowledges the generosity of the Weills over the years. Its president also stated the addition of the Weill name could attract "other supporters of higher education."

The response of the local community, faculty and alumni has resulted in what a friend of mine likes to call a "SOP" - Storm of Protest. The milder comments question why the name change is necessary. But other terms like "leveraged buyout" and 'hubris" and "arrogance" populate the criticism on social media and in letters to the local paper. It is true that the Weills are not without controversy, especially Mr. Weill, whom Time Magazine cited as among "The 25 People To Blame for the Financial Crisis" of 2008.

There are a number of issues. One is the definition of "forever known" by the name Paul Smith's College in the will language. It seems pretty clear to me, but there are instances where courts have been persuaded by present day exigencies, usually financial, to overlook that condition in behalf of the appellant institution. And it will still have the name, though not exclusively. Besides, as some have pointed out, it will always be known  colloquially as Paul Smith's College, much as The Avenue of Americas will always be called Sixth Avenue by  New Yorkers.

But the larger issue is the conditional nature of the gift - you'll get the $20 million  if you change the name. This could be a chilling precedent. Will someone be tempted  to, say, give a struggling symphony orchestra millions if their name is added ?  The Geoffrey Platt _________ Philharmonic sounds nice. Or another condition:  you'll get my bucks if you promise "forever" never to program Bruckner symphonies?

Many have pointed out that this is the age of Me, symbolized by the present day antics of Donald Trump. So perhaps we shouldn't be surprised by this latest step in "naming rights." Philanthropy  means "love  of humanity" not love of me, but we are way past that now in the nonprofit sector.

Does the example set by the Weills represent a slippery slope? With the concentrated millions pouring into political campaigns, should we not be wary of the possibility, for instance,  of the re-naming of the U.S. Presidency?  Maybe ( you fill in the blank )  "The __________President of the United States of America."  A jest, but ...

p.s. On October 7, a judge of the State Supreme Court in Franklin County NY denied the college's petition to change its name, citing "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." It is unclear how this ruling will affect Mrs. Weill's gift of $20 million, which had been predicated on the name change. The ruling also may have precedent-setting implications regarding the issue of re-defining  "forever" (see above) regarding institutional names established by bequests or gifts.

p.p.s. On October 22, the Weills announced they would not be donating the $20 million to Paul Smith's College, after a NY State Supreme Court turned aside the college's petition that the college be re-named Joan Weill-Paul Smith's College as a condition of the gift. The college had decided not to appeal the decision, in consultation with its board and the Weills. So the deal from the outset : $ for re-naming, is a goner.