What $20M Can't Buy

Judge says Paul Smith's College didn't present compelling evidence that a name change was necessary -- even in return for a large gift.

October 8, 2015

A New York State judge has rejected a request by Paul Smith's College to change its name to the Joan Weill-Paul Smith’s College in return for a $20 million gift from the philanthropists Joan and Sanford Weill.

The ruling was based both on the gift agreement that created the college and the judge's conclusion that the college has other ways to improve its financial health and never demonstrated that a name change was necessary.

It is unclear whether the college will appeal or whether the Weills will give any of their gift without the name change.

Ever since Paul Smith's in July announced the plan to change its name in return for $20 million, many students and alumni have been campaigning against the move. And the debate has spread beyond Paul Smith's, a small private institution in the Adirondacks that focuses on fisheries, hospitality, forestry and business. Experts on fund-raising have been citing the controversy to discuss how much would-be donors should be able to set terms of gifts, and how difficult pledges to long-ago donors may be to keep in financially troubling times. And many alumni argued that the controversy showed a willingness by the college's leaders to go too far to raise money.

The name Paul Smith comes from a man who built a hotel in the Adirondacks and served as a wilderness guide in the 19th century. His son left money to build a college in his father's honor. Phelps Smith, the son, specified in his will that the college would be "forever known" by his father's name.

John T. Ellis, the state judge who heard the case, explained that his decision was based on the legal principle of cy pres, a French term for "as near as" that is used to consider proposals to change bequests or donations that might otherwise fail, but to do so in ways that are close to the original intent of the gifts.

The college argued that it was entitled to change the name and the conditions of the original bequest because it badly needs the funds from the Weills. The college noted that enrollment has been decreasing, no small matter at a tuition-dependent college. Further, it noted that a student body that is 66 percent male and 87 percent white suggests that Paul Smith's needs to connect with a broader mix of potential applicants. The college submitted to the judge a $30 million plan to revitalize Paul Smith's and said that the gift would pay for a substantial portion of needed improvements.

Judge Ellis did not dispute that the college may want to try new strategies, but he said that was not enough to justify ignoring the original bequest. The college "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 graduates," he wrote. Further, he said that many of the college's arguments were "speculative" and not backed by concrete evidence that the current name is causing harm.

"This court does not find that the name change restriction is impractical, or wasteful, to such a degree that it frustrates the charitable purpose of the bequest of Phelps Smith," the decision says.

Cathy S. Dove, president of the college, released a statement that did not indicate the next move by Paul Smith's. "While we are disappointed in the court’s decision, the Board of Trustees and I truly appreciate the enduring connection our people feel to the college and our traditions," Dove said. "We look forward to working with faculty, staff, students, alumni and other stakeholders as we address the challenges that we along with many other colleges face in this environment, consider our options and shape our future."

Joan Weill could not be reached for comment, and the Paul Smith's news office did not respond to questions about her intention now that the judge has declined to back a name change.

Richard Ekman, president of the Council of Independent Colleges (of which Paul Smith's is a member), was critical of the judge's decision. "The judge is being overly nominalistic about the burden of proof. It would take many pages (and a lot of the college’s money) to put on the record the most obvious facts about the changing cost structures in higher education, the demographic changes among college-goers and the truisms of marketing that every college already knows well," said Ekman, via email. "The college no doubt assumed that … the court was already familiar with these matters."

Ekman added, "The most fundamental point is that this is a matter that should be decided by the institution. In considering the lawsuit, the court should have affirmed the college’s authority and its ability to make a well-informed decision -- certainly a better-informed decision than the court has made."

On social media, alumni of the college are celebrating, and some are challenging Weill to stick to her gift, or urging other alumni to give generously on the chance that the Weill gift does not materialize.

Michael A. Olivas, director of the Institute for Higher Education Law and Governance at the University of Houston, said he thought the judge had no choice but to block the name change. First, he said that the bequest was very specific, without vagueness that could create a question of intent.

He said colleges only tend to win cy pres rulings when they argue that they are "on death's door," or they can show that the original gift term (in this case a name) is causing damage to the institution. For example, he said that when Beaver College changed its name to Arcadia University in 2000 (which did not involve a dispute over a bequest), the college could have defended its need to change the name because the old one was frequently mocked as a vulgar term for female genitalia. But Olivas said there was no evidence that the name Paul Smith's College was hurting the institution in any way.

Further, Olivas said he was surprised to see a college offering to change its name for $20 million. "Twenty million [dollars], as generous as it is, is usually not enough to name an institution," he said. Olivas urged fund-raisers in such situations "that they have to be reasonable or they will end up looking like they are after so much vanity."

From the jokes on Twitter, perhaps some would-be donors agree. Consider the following from Brent Colburn, a College of William & Mary alumnus currently at the Harvard University Institute of Politics: "This precedence is a real blow to the future plans for the College of William, Mary & Brent."


Back to Top