Dear Esther – Part 6

Dear Esther,

You stated in a blog post dated March 17, 2014, “We have repeatedly emphasized that what Chatham confronts right now is not primarily a financial question,” yet we all know that money is an unavoidable part of the conversation, given that enrollments drive the financial stability of both the endowment and the university in general. While we appreciate the college directing us to the IRS Form 990s for the (currently available) years of 2007-2011, a closer look at these documents has only led us to more questions about the use of resources and the impact those monies may have had on the College for Women (CCW) and the impending decision before the Board of Trustees.

What We Know…

There are several areas of “concern” present within the available 990s.

Marketing

According to a post by Bill Campbell on the official Chatham feedback blog, “As previously reported, we have spent 2.5 times ($4.5 million vs. $2.2 million) more on these activities for CCW compared to all graduate and online programs.” While we acknowledge that we do not have IRS documents from 2012 and 2013, for the last four years that would total the six that Mr. Campbell indicates include those expenditures, we can only find a total of $3,739,617 spent on advertising costs, and that is for the university in general, not segmented out by undergraduate, graduate, etc. Over the five years for which we have 990 access, Red House Communications was paid a total of $2,999,584 for marketing services (we assume out of that larger $3.7 million), and yet Chatham has failed to avail itself on any substantive level of the free marketing venues of Facebook and Twitter.

Travel

For 2007-2011, just over $3.5 million was spent on travel, with $1.7 million in just two of those years. There’s no indication of where these travels led, or who was doing all of that traveling, but that seems to be an exceptional amount when you have stated repeatedly that recruitment is largely limited by a 200-mile radius based on student preferences.

Building

From 2009-2011, the 990s list a total of $5,796,706 for contracts related to architects, contractors, and construction. From what we know, these costs could be related to a few things. First, those expenditures could be tied to Chatham’s settlement with the Department of Justice to bring the university campus up to ADA compliance, and we fully support that. However, given that the gift of Eden Hall was made shortly before these reporting years, it is possible that some of these expenses could be related to Chatham’s expansion on other campuses, and those costs are not insignificant, especially coming during the height of the recession and before the Falk Foundation’s closing gift, made in 2013, and the impact an entirely new campus has had on the undergraduate college.

Foreign Investments

The 990s for 2010 and 2011 list “foreign investments” for Central America and the Caribbean for almost $6.8 million, with almost $5 million for 2011 alone (the equivalent of 51% of the total expended on scholarships for that year), yet no further explanation for this is provided. Those 990s list funds held in banks in the Cayman Islands, and the two could be directly related, but there was not enough explanation in the documentation to be sure. That expenditure could also be related to a “substantive change” filed on July 01, 2008 with the Middle States Commission on Higher Education (MSCHE), Chatham’s accrediting body, to add a new location for Chatham at the Centro Universitario de Bayamon in Bayamon, Puerto Rico, however, again, more information is required. (Click on the link provided and then click on “Statement of Accreditation Status” toward the bottom.) This expenditure for foreign investment is different than those expenditures specifically listed as the study abroad program or scholastic aid.

What We Believe…

Significant monetary investment in projects not directly related to the College for Women have diverted time, attention, and much needed resources from the CCW and hindered its viability.

We concede that some of these expenditures have been necessary and have benefitted the College for Women, and we are not accusing the university of misuse of funds, but the totals and the vague definitions of some of the expenditures, particularly in a time where every dollar counts, is where we believe more answers are needed. Good financial stewardship is imperative in all areas of the college, and though you have made the argument that the university is not in “trouble,” you’ve also stated that the Standard & Poor’s 2014 rating for the U.S. not-for-profit higher education sector is “negative,” which directly places at least part of the onus on this decision on the financial level. Given that, any questions surrounding the finances of the university and its parts deserve clear answers.

What We Want…

A delay of the Board of Trustees vote.

Given the outstanding questions regarding the use of the university’s resources, we believe the co-ed vote should be delayed by at least a year. During that time we ask you and the administration to provide us with the following:

  • A detailed description of how the marketing funds have been divided between the College for Women and the other parts of the university, including monies used for creation of advertisements and placements of those ads.
  • An explanation of any and all foreign investments made by the university, including a description of the Puerto Rico location documented in the MSCHE’s Statement of Accreditation Status.
  • An explanation of all capital improvement/new projects included in the expenses included in the contracts for architects, contractors, and construction.

You have asked for our feedback, Esther, but are you and the Board really listening? If so, you will take this letter to heart and act upon our requests.

Sincerely,

The Save Chatham Movement

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