Bay Area Blues

The president of Sofia University, facing the prospect of a campus forum that might make him look bad, shut down the Palo Alto college for a day in December and posted guards to keep out students and professors, according to former senior administrators.

The afternoon forum was set up to expose the institution’s ailing finances and was bound to raise further questions about the two-and-a-half-year reign of Neal King, the embattled university president who was already on his way out.

Organizers moved the forum to a nearby church and it happened anyway. The campus reopened the next day.  But days later, on Dec. 19, which some now call Bloody Thursday, King fired several of those organizers, including the founder Bob Frager, who was then a professor and director of a master's program.

"It’s like the man just went crazy,” Frager said. “He locked the school down to try to prevent us from meeting and talking.”

King, who gave his side of the story in emails, did not comment on specific allegations or assertions by his critics. The chairman of the Sofia board declined to comment. The current president could not be reached for comment.

Besides firing the founder of the institution, King went through a lot of other people during his time at Sofia: five chief financial officers, two vice presidents and about 40 other people were all forced out or left during his relatively short tenure, according to former university officials.

The finances didn’t fare much better.

Now, Sofia is on the verge of ruin or being bought out. And several faculty and former administrators point the blame squarely at King, who came to Sofia in 2011 after time as president of Antioch University’s Los Angeles campus.

Events of the past year have shattered the dream of Sofia, which Frager founded in 1975 as the Institute of Transpersonal Psychology. The graduate institute was one of a handful of small colleges that cropped up around the San Francisco Bay to provide an academic outlet for a roiling counterculture movement. It awards undergraduate and graduate degrees and certificates to about 500 students who study nontraditional psychology.

A few of the other similar small institutes have lost accreditation or been bought out. Sofia, which was created to study a range of experiences beyond the confines of traditional psychology, is now facing an uncertain future.  

The university has forced across-the-board pay cuts on its faculty and staff and is still so short on cash it’s now juggling bills. At one point in March, it may have only $5,000 in the bank while it awaits more revenue, its chief financial officer said late last month.

The university’s board now only has three members after six board members quit late last year.

King, following a unanimous vote of no confidence by the faculty, also left at the end of December with a $300,000 severance package. Now it’s unclear if his successor, Frank Ellsworth – or anyone else for that matter – can put Sofia back together again.

'A Change Agent'

King came to the institute in May 2011 following the death of a beloved president, Tom Potterfield.

In an email, King described himself as a “change agent” for a board concerned about the life of the institution. Sofia has about 500 students, is dependent on tuition and has no endowment to speak of. In other words, it’s not the model of a stable organization. Yet, King’s critics said he destabilized it and left it deeply wounded. Searching for reasons, even former senior administrators have resorted to conspiracies.

One of King’s first ideas was to change the name from the Institute of Transpersonal Psychology to Sofia University. The goal of the name - Sofia is Greek for wisdom -- was to aid in broadening the institute's appeal. But this, his critics say, undercut the college’s main selling point: its niche appeal. King acknowledged this was the beginning of troubles.

"Looking back, I think it’s fair to say that the board and community were not fully in sync in terms of the charge given the new president, which became fully apparent to me only in the aftermath of the name change in 2012,” King said in an email.

In King’s telling, Sofia was already in a tricky spot. Its peers in the area, John F. Kennedy University and Saybrook University, have both been taken over by nonprofit chains.

In Frager's and others’ telling, King made things worse. Turnover was enormous, said Paul Roy, a former provost. About 45 people left the university from the middle of 2011 to the end of 2013, including about 17 people King hired, Roy said.

The head of human resources stayed busy. “They called him the grim reaper,” said Mimi Matossian, an instructional designer who worked at Sofia for four months.

Most notably, King went through five chief financial officers in less than three years. This seems to have caused problems.

A clear picture of last year’s budget is still being pieced together by auditors, for instance. The current CFO has only very recently been able to get a clear picture of the university’s balance sheet, she told board members in late January, according to a recording posted online of the meeting.

Roy and King perhaps had reason to be at odds. Roy was the internal candidate for president who lost out to King in 2011. But King kept Roy around as his chief academic officer only to fire him on Bloody Thursday. Eleven others were fired that day, including Frager and Sofia’s star professor and the noted author of books on forgiveness, Fred Luskin.

Another person to get the axe that day was Tracy Byars, who had been the university’s spokeswoman and vice president of advancement. Oddly, Byars said, King had told her not to raise money and said he also didn’t plan to look for donors.

"He asked me to stop fund raising, and I argued with him, but in everything it was his way or the highway,” Byars said.

Donations have never been very good. The university’s best year brought home just $600,000 in donations, the current board chairman said recently. But, after the name change, donors were even less likely to give, former officials said.

Most alarming to some was not that little money was coming in but that so much money was going out.

Former officials said the university had several million dollars when King arrived. Roy said there was still about $3 million in reserves in February 2013. Now, cash is so thin that to get by the university took out a line of credit, held checks and didn’t pay bills it didn’t have to in December, its CFO told board members recently during the meeting that is recorded and posted online.

A good chunk of the money went to lease and renovate a building next door to its existing facilities so Sofia could expand. Byars said she saw other high-priced expenditures, including a $75,000 inaugural for King, lawyers King hired to look into a merger with the European Graduate School in Switzerland and more than $500,000 for campus management software.

Contraction When Expansion Was Needed

But, rather than expand as planned, the university suddenly contracted. Officials found out in July that they were facing an enrollment shortfall. Roy said the college had expected 152 new students but was set to receive only 90. In a university that relies on tuition for 95 percent of its revenue, this was a huge blow. Byars said the admissions office, which she said reported directly to King, had 500 leads for prospective students “stuffed in a drawer” that it had failed to follow up on.

While staff scrambled to help plug the holes before fall, the shortfalls in enrollment still prompted King to announce 10 percent pay cuts for all of the faculty and the better paid staffers.

Roy said Sofia also lost some students when King ordered a change in the pricing structure.

“Neal arbitrarily raised the tuition on some programs without doing the math on it, and some students found it impossible to stay because they were so upset their tuition had gotten so high,” Roy said.

But the largest known expense, more than $1 million by some estimates, went to the real estate expansion of an institution that was about to contract. “It looked like a good idea,” Frager said. “Now that we’re going bankrupt, it doesn’t look like such a good idea.”

(The university might at least be able to recover a bit from the real estate deal. In a recent board meeting that was recorded and posted online, Sofia's board chairman, Richard Hesel. said, “Rumor has it that Google is looking at this property and there might very well be a chance to actually make some money.")

Frager said he had tried not to look over King’s shoulders at first, but months after King announced the pay cuts, King said there was another shortfall and this time there would have to be layoffs. Frager said he went to the faculty and to the board. On Nov. 18, the full faculty backed a no confidence vote against King. Six days later, King said he would resign on Dec. 31.

In the meantime, Frager, Byars, Roy and others decided to host a forum in mid-December to explain the situation to people on campus who didn't already know. Despite the attempt to call off the forum and then shut down campus the day it was supposed to happen, scores of people attended and hundreds watched online, according to its organizers.

Bloody Thursday came a day before the end of classes and, with it, several organizers' jobs.

Frager said who King chose to fire was partly retribution.  "Basically, what King did was a big 'fuck you' before he left," Frager said. "You can quote me."

King said cuts were necessary. "Like the overwhelming majority of small private schools in the U.S. in recent years, Sofia fell short of its enrollment goals the last couple of years," he said in an email. "Before I left the presidency, and in concert with the board, a restructuring of the organization was enacted to address the financial realities presented by enrollment and budget shortfalls. This restructuring involved the painful but necessary laying off of 12 employees: administrators, faculty and staff."

In either case, the cuts have left professors scrambling to fill the gaps.

According to Frager, 23 doctoral dissertation committees were left without chairs, two programs were left without leaders, and courses were left untaught.

“The students are the ones who are caught in the middle of it,” said Ryan Rominger, a faculty member who teaches online classes at Sofia. “Students are wondering if they are going to have a school left. Students have paid tuition and are wondering if they have been set back in their academic careers.”

Rominger said professors were taking on extra work to help keep things running.

In the meantime, the university's governing board only has three members. The board, according to several people, has thus far refused to quickly find or accept recommendations for new members.

In the meantime, the campus is worried it will be taken over.

The president of the Chicago School of Professional Psychology, a system of nonprofit colleges based in Los Angeles, met with King and toured the campus in Palo Alto before King left the university. Sofia faculty and former administrators say this is the writing on the wall. “I am completely convinced that a merger would destroy over time the essence, the spirit of the fundamental mission this school is based on,” Frager said.

A spokeswoman for Michele Nealon-Woods, the Chicago School president who toured the Sofia campus, said she is “always seeking ways to exchange ideas and explore potential partnerships.”

Hesel, the board chairman, did not rule out a merger during a recent board meeting which is posted online.

Hesel, who was also a member of the board at Antioch when King was its president, may be known to some in higher ed circles as a principal at Art & Science Group, a consulting firm that advises colleges on strategic planning, enrollment management, branding, pricing and alumni relations.

King’s exit – and Hesel’s handling of it – has bred resentment, particularly the $300,000 severance package, which amounts to about 60 times the amount of money the university may have in the bank in March.

During a board meeting, Hesel defended the payment, noting King had signed a five year contract and was leaving before its end.

Others were shocked by the payments.

Asked to comment on the board’s actions and King’s presidency, Hesel said in an email “it’s totally inappropriate for board members to make any public comments about internal matters regarding the institutions they represent.”

A recent survey of 161 Sofia students – about a third of the current student population –  found their top concern was the board, followed closely by fears Sofia would be merged into another institution.