I have been affected by the actions of the Board of Directors (“Board”) of Sweet Briar College (“SBC” or “College”), a nonprofit institution subject to oversight by the Commonwealth of Virginia. I am concerned that your deference to the Board in the decision to close the College without a proper investigation is incorrect and should not stand. I respectfully request that you conduct a full and thorough investigation into the actions of the Board and administration of the College before working with those parties any further.
In addition, I would like to take this time to address some of the points in your response via my own form letter, though you will find that mine has been personalized.
Letter from the Attorney General: Sweet Briar has served a unique purpose in the Commonwealth for more than a century, and its closing has understandably been shocking and disheartening to thousands connected to the school and many more Virginians who proudly claimed the college.
Many thousands of people are more than shocked and disheartened. We are angry, hopeful, and determined. Three thousand Sweet Briar alumnae reside in Virginia. This number does not include our significant others, parents, children, or friends, nor the faculty & staff of the college or surrounding businesses. We are your constituents: people who campaigned, funded, and voted for you. We--I--helped you win the last election by less than 1,000 votes.The passion and commitment shown by the Sweet Briar family following the Board of Directors' decision has been a testament to the kind of education it has offered.
We are more than passionate and committed. Over 20,000 women have graduated from Sweet Briar with degrees across a wide spectrum, all based on a liberal arts education that prepared us for any and all challenges we face. Sweet Briar taught us to use our voices to confront injustices. I'm thrilled that your mother taught you the same: "if you see a problem, you've got a responsibility to try to fix it. And you keep working on it until you get it done." We have that in common, you and I.
As you know, Sweet Briar College is a private school,
As you know, on Tuesday, April 14, 2015, Bedford County Circuit Court Judge James Updike ruled that Sweet Briar is a non-stock corporation.and therefore is not a client agency of the Attorney General, who advises state officials and represents the various state agencies, departments, and colleges and universities.
The Attorney General also represents his constituents: the residents of the Commonwealth of Virginia.Last week, a Bedford County judge ruled that the Board has the legal authority to vote to cease operations when it has determined that it is no longer sustainable to continue.
In the same ruling, Judge Updike also noted that the Board has the legal authority to cease operations as long as it is acting in good faith.
He also ruled in favor of Attorney General Ellen Bowyer's motion to grant a 60-day injunction against using general funds, which he would not have done if he did not believe the case had merit in front of the Virginia Supreme Court.
It is extremely unfortunate that the Board could not find a viable path forward;
Collectively, hundreds of individuals have spent hundreds of thousands of hours over the past seven weeks researching, writing, advocating, and planning for the future of Sweet Briar College. Hours after Jones announced the closure, alumnae and supporters mobilized and formed Saving Sweet Briar, both in on-line and offline groups. The College has refused funds and ideas emanating from these stakeholders to prevent SBC’s closure.
but unless the Board has acted improperly or violated its duties, the Commonwealth of Virginia has no legal basis to intervene.
You have replied that there is nothing to do unless the Board acted improperly or violated its duties. It is specifically because I believe the Board acted improperly that you are receiving this request. Please pay special attention to the following evidence that has come to light:
- A letter from a Board member who was forced to resign because he did not agree with the chair of the Board.
- Board meetings leading up to the decision for closure were conducted in “Executive Session” without meeting minutes subject to review and analysis.
- A forensic accountant's report that shows that Sweet Briar is not in as much financial trouble as presented to the public.
- A Sweet Briar professor's analysis of the now-debunked study cited by the Board as a reason for closure.
- Solicitation of funds from Virginians by the College, for use in Virginia, as a Virginia nonprofit under false pretenses; misleading donors; and misusing donor funds. Between November 2014 and February 2015--while College administrators and Board members were taking steps to close SBC--the College was soliciting donations for its Annual Fund to be used for general operations. Moreover, to solicit Annual Fund donations during that time, the College indicated that SBC was viable and released information about a strategic plan for the future.
I would like to know how you are so sure that the Board of Directors didn't violate its duties, especially in light of your refusal to conduct an investigation.Because of the commitment of people like you, the size of the assets involved, and the significant economic and cultural impact of the closing, the matter is receiving the close attention and careful consideration it deserves.
During recent hearings in Bedford County, attorneys from your office stated that in bringing suit against the College, “the Amherst County Attorney seeks to ignore the process that the General Assembly provided through [the Uniform Prudent Management of Institutional Funds Act (“UPMIFA”)] for institutions to properly use gifts restricted for one purpose for another consistent purpose.” I have reason to believe, however, that the Sweet Briar College Board ignored these standards in deciding to shut down the College and dispose of its assets.
Though an organization is permitted to make bad decisions, it is not permitted to violate law. I have questions about the Board’s actions as it relates to the business judgment rule’s requirement of “good faith, loyalty, or due care” as the Board, in requesting donations, did not provide information or concerns about its financial condition. It is now clear that the College harbored such concerns. I also question if donations from thousands of Commonwealth citizens were mismanaged.
In his Inside Philanthropy article entitled Is Sweet Briar College Complying with Virginia Law?, Frank A. Monti shares:
"Dissolving a nonprofit charitable corporation is a matter of law. The Virginia Nonstock Corporation Act governs the dissolution of nonprofit corporations in the state. In addition, the organization’s articles of incorporation and bylaws are also likely to address the contingencies of a dissolution. Although I do not know what these documents contain in the case of Sweet Briar College, one basic requirement that I am sure is present in these documents is the IRS requirement that, upon dissolution, all assets of the corporation will be given to another charitable, tax-exempt entity with a mission as closely related to the Sweet Briar mission as possible. It would have been impossible for Sweet Briar College to obtain tax-exempt status from the IRS without this provision in its organizing documents."As the process moves forward, we will maintain that commitment to collaboration and communication, and will continue to encourage the parties to be open and transparent with one another and all interested parties and stakeholders. Even in this difficult time, it is important that the school's leadership and its community communicate openly and honestly about the challenges confronting Sweet Briar and the Board's decision.
Students, faculty, staff, alumnae, parents of students, and donors had no reason to know that SBC’s financial situation was “dire” or “insurmountable,” as now described by the College. Recent news releases by the College emphasized record donations and expansions, and no major fundraising campaign had been undertaken since 2006.
Mr. Herring, if you truly believe that “transparency and accountability are the keys to good governance,” you will conduct an investigation and make public the reports, meeting minutes, and details that Jimmy Jones and Paul Rice are hiding. None of their actions with respect to the decision to close SBC have been transparent, and the Board and the College’s administration refuse to be accountable to its true stakeholders.
The Attorney General's formal role under the law will be to speak on behalf of the general public interest
Please let me know how the closure of the College benefits the general public. For the life of me, I cannot find the answer to this question.to ensure that Sweet Briar's remaining assets are used in a way that is in the public interest and as close as possible to the intent of the donor.
The only intent of the original donor, Indiana Fletcher Williams--and all of those who have come after her--is to educate young women on the Sweet Briar estate. Closure is in direct opposition to this intent.
The law also requires the Office to review proposed modifications to the use of certain gifts. No proposed modifications have been approved yet and Attorney General Herring personally commits to the Sweet Briar community that we will closely review the proposed use of remaining assets to ensure they will provide lasting educational benefits and carry on the legacy of Sweet Briar.
On Wednesday, April 15, 2015, the Attorney representing the College declared that $3 million in funds has already been released, meaning that you have, in fact, approved some proposed modifications.
If your position of support for an unchecked Board of Directors of a nonprofit without an investigation is permitted to stand, it will send a terrible message to Virginia citizens: that nonprofit Boards are untouchable, even when their actions directly contradict the organization’s mission and a donor’s intent.
I request that you investigate whether College authorities purposefully or intentionally deceived donors; whether the most basic of steps to improve the financial health of the College were taken; whether students, faculty, alumnae, and donors were misled or deceived; and whether mail fraud and wire fraud transpired because solicitations to donate to the College were made while those requesting such donations were acting and in belief or suspicion to the contrary.
An investigation will determine whether the Board and administrators of SBC acted properly or improperly. An investigation can also serve to preserve the integrity of donor intent for Virginia’s nonprofit institutions.
Thousands of Virginians believe that Sweet Briar can and should be saved, and that the Commonwealth of Virginia should allow for a new Board that is willing and able to continue the College’s mission.
A Vixen Says Moo
Members of the Saving Sweet Briar community created templates for letters to the Attorney General and legislators. I am using them with permission.