Paul L. Caron
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Thursday, October 8, 2015

NY Times: Judge Rejects Request By College To Change Its Name In Exchange For $20 Million Gift

Paul SmithNew York Times, Judge Rejects Request by Paul Smith’s College to Change Its Name:

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 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. ...

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 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.”

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. ...

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.

“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.”

(Hat Tip: Mike Talbert.)

https://taxprof.typepad.com/taxprof_blog/2015/10/ny-times-judge-rejects-request-by-paul-smiths-college-to-change-its-name-in-exchange-for-20-million-.html

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Comments

Quote: "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."

It's a bit hard to see how that name will be enshrined "in perpetuity" if the school disappears without this money.

Posted by: Michael W. Perry | Oct 8, 2015 12:24:10 PM