MARLBORO — Vermont Attorney General TJ Donovan has sanctioned Marlboro College's transfer of assets to Emerson College in Boston.
The Attorney General's Office (AGO) also okayed the sale of the campus to Democracy Builders Fund (DBF), which intends to launch a new school, Degrees of Freedom (DOF), which is designing a low-residency college program with an anticipated opening in 2021.
After the state approval was issued July 20, both transactions are expected to take place this week, according to Marlboro College President Kevin F.F. Quigley.
The college expects to “end all operations” on Aug. 15, according to an auto-reply sent from Quigley's email account.
This wind-down includes two parts. The first is a transfer of assets, including Marlboro's endowment, to Emerson.
Emerson has agreed essentially to a merger with Marlboro that allows current Marlboro students to finish their degree in Boston, and the proposed creation of the Marlboro Institute for Liberal Arts and Interdisciplinary Studies at Emerson College.
More than 20 Marlboro faculty have also agreed to teach at Emerson, where they will enter as tenure-track associate professors.
The second part is the sale of the campus to DBF.
The agreement with Emerson, released in redacted form as part of a public records request with the state Office of the Attorney General, is contingent on the sale of the 533-acre campus, which Quigley has said costs between $1 million and $1.5 million a year to maintain.
'Within its rights'
The AGO, after a review, found that the college is “within its rights to decide to wind down its affairs as an educational institution.”
According to the AGO, under state law, the office is directed to “ensure that charitable nonprofits use their assets in line with their charitable purposes and any relevant donor restrictions.”
The review was conducted by the AGO, headed by Attorney General T.J. Donovan, and concluded that “Marlboro College's Board of Trustees was within its rights under Vermont State laws governing public benefit corporations to wind down Marlboro College's affairs through an alliance with another educational institution.”
The decision was in part based on the college's enrollment and financial situation and its inability to restore either to a sustainable level. The review also noted that the college would likely lose its accreditation if it continued business as usual.
The AGO reviews the following aspects before a nonprofit's dissolution:
• the purpose of the relevant public benefit corporation;
• the corporation's assets;
• whether any of the corporation's assets are subject to certain kinds of specific restrictions, such as the terms of a charitable trust or gift instrument;
• how the corporation is proposing to dispose of its assets;
• whether the corporation's proposed disposition of its assets aligns with the corporation's purpose and asset restrictions.
“This transition has been difficult, but Marlboro College has acted consistent with its fiduciary duty and has done its best to address the interests of students and faculty,” Donovan said in a news release announcing the decision.
“The transfer of Marlboro College's assets is consistent with its mission and donor restrictions,” he continued. “As a result, there is no basis under Vermont law for the Attorney General's Office to intervene in the transfer of assets to Emerson College or the campus sale to Democracy Builders.”
The AGO stated that the campus' sale to Democracy Builders is consistent with state laws and that Donovan had no legal basis to object to the sale.
According to the AGO's 13-page notice, Marlboro College submitted its intention to enter into an agreement with Emerson College with written notice and documentation on June 26 and 29. The college also alerted the office to its intent to sell the campus to Democracy Builders with notice and documentation on June 2 and 5.
For its review process, the AGO considered its start date as June 29 for both transactions.
Under state statue, if the AGO had concerns that the asset transfer or sale was discordant with laws governing nonprofits, then it could “seek court intervention.” Absent concerns, the office's practice is to issue a Notice of Non-Objection, as it did on Monday.
The office conducted its review based on documents provided by Marlboro College. They also considered documents regarding the college's endowment and its 46 restricted endowment funds.
In its notice, the AGO stated that the college's enrollment and finances had decreased to unsustainable levels. The college has operated with a deficit since 2015.
In 2009, 310 students attended the college. The school's net tuition was $7.2 million. It drew $1.5 million from the endowment.
By the 2018 academic year, however, enrollment had dropped to 142 students - a 52 percent decrease - and net tuition to $2 million. The college drew $5.2 million from its endowment that year, a 200 percent increase.
According to an independent audit released as public records by the AGO, the endowment was valued at $37 million in 2017. According to the AGO's report this week, the funds were valued at $14 million as of April.
Staff also corresponded with the school's accrediting body, the New England Commission on Higher Education (NECHE). Last December, NECHE agreed with the college that a merger with another institution would likely be the “only way” to address enrollment and finance issues.
Staff also looked at documentation related to the “information and records reflecting this decision's rationale,” including financial documents, consultants' reports, and the recommendation of a committee convened to explore the future use and sale of the campus.
The AGO explored the proposed merger with Emerson College and the creation of the Marlboro Institute for Liberal Arts and Interdisciplinary Studies at Emerson College, including minutes from meetings of the Board of Trustees.
In its press release, the office wrote, “The AGO acknowledged that Marlboro College's impending closure is an occasion of significant and challenging import for many of the College's students, faculty, staff, and alumni, as well as community members of Marlboro.”
Included in the tranches of documents related to the investigation released through multiple public records requests and made available at the AGO's website were multiple notes from alumni and others connected to the college imploring Donovan and his team to forbid the transaction.
While a number of these public comments argued that transferring the college's endowment to Emerson College would violate the intent in which those gifts were made, the AGO ruled that “the charitable purposes of Marlboro College and the proposed Marlboro Institute at Emerson College are substantially similar.”
In determining the “substantial and intentional similarity in charitable purpose,” the AGO cited the “near-wholesale transfer of the College's academic programming - through its core pedagogy, faculty, and supporting charitable assets - to a distinct division within Emerson College” and the integration of Marlboro representatives into Emerson's board governance.
A 'very messy, very complicated' process
The Marlboro College community locally and nationally has wrestled with its feelings of grief and other emotions since the college announced it would close after the 2020 spring semester.
These feelings have intersected with local actions to eliminate systemic racism in Vermont and nationally, spurred by the national movement that ignited in the aftermath of the death of George Floyd at the hands of police in Minneapolis in May.
Two groups have entered this fray.
The first consists of people involved with Degrees of Freedom and Democracy Builders Fund, the organization seeking to purchase the Marlboro College campus.
The second group, Black N Brown at DP, a collective of people connected to the Democracy Prep Charter schools that were founded by Seth Andrew, also the founder of Democracy Builders Fund and Degrees of Freedom.
Black N Brown at DP members have made allegations of trauma, abuse, and racism at the hands of Andrew, creating a tangled web of emotions, trauma, anger, good intentions, and opinions that came to the fore at a special Marlboro Selectboard meeting on July 20.
During the meeting, which took place over Zoom and stretched to more than three hours, public participants - by one count, 159 of them - spoke passionately in support of the respective groups.
Members of the Democracy Builders design team, as well as Andrew, also spoke - in a limited way, to the dissatisfaction of some listeners - about their plans for Degrees of Freedom, which they intend to open in September 2021.
To open a college program on Potash Hill, Democracy Builders will also need to be reviewed by the state Agency of Education and receive accreditation from an organization such as the New England Commission on Higher Education.
Tensions between the two factions translated into bursts of questionable behavior, including a verbal attack against Andrew and the revealing of an anonymous Black N Brown member's identity by an advocate of DOF.
As the meeting came to a close, board chair Jesse Kretzer thanked everyone who had participated in the conversation. He added that questions submitted to the board that night would be compiled, made public, and given to Democracy Builders.
Kreitzer asked members of the DOF design team to respond to the questions before the next Selectboard meeting on Thursday, July 23, if feasible.
“This is difficult and messy, and I think we're all trying to figure out how best to heal as a town and determine next steps,” Kreitzer said. “I guess what I would say is I would encourage the Degrees of Freedom design team - and I thank them for their participation and everyone who participated tonight - to be communicative.”
Kreitzer said this engagement could happen outside of Selectboard meetings. He suggested The Vermont Council on Rural Development as an organization that is versed with facilitating community dialogue “around these very messy, very complicated conversations.”
“So I just thank you all for being willing to come to the table and look forward to communicating with you down the line,” he said.