Gov. Ron DeSantis' takeover of New College of Florida puts $29 million in donations at risk

A former trustee at New College of Florida says 13 major donors told her they are canceling more than $29 million in planned contributions since Gov. Ron DeSantis began transforming the school, a huge financial blow to the small college.

Charlie Lenger served on the New College board until Jan. 6, when DeSantis replaced her in a dramatic move that saw six conservative board members appointed with a mandate to transform the college.

The newly appointed board, after an emotional meeting Feb. 28, voted to abolish the office handling diversity, equity and inclusion programs at New College. DeSantis previously pushed through legislation governing how K-12 schools in Florida discuss race and gender identity and recently prohibited an Advanced Placement course in African American studies.

Lenger served on the New College Foundation board for 35 years, helping to bring in donors, and has been a longtime donor herself. A Sarasota, Florida, resident, she founded a plant-leasing company in 1981 that grew out of her senior thesis at New College.

After DeSantis’ takeover, donors started contacting Lenger to get more information about what was happening. A number shared their intentions to remove New College from their estate plans and stop other contributions.

After DeSantis board takeover: New College of Florida board abolishes diversity office

Lenger began keeping a list of canceled contributions. Of those who were willing to share the amount, she tallied more than $10 million from 11 donors as of Thursday. They all oppose what’s happening at the college under DeSantis’ appointees, and don't want their money to support it, Lenger said.

"I can’t begin to know all the donors, but 11 donors have told me, they either have or quickly will change their estate plans," Lenger said in an email.

After this article was published online Friday by the Sarasota Herald-Tribune, a member of the USA TODAY Network, two more donors contacted Lenger to say they are rescinding planned contributions of $50,000 and $18.8 million. Lenger said she was "pretty floored" by the donor who said he is canceling his $18.8 million gift.

That donor is somebody Lenger has known for a long time. He told her the gift to New College was in his will, but he is now removing it.

$29 million would be big loss for small college

The $29 million in canceled contributions would be big money for a small school with just 700 students and a relatively small donor base. New College's Foundation had $43.5 million in net assets in 2019 and received $2.4 million in total revenue that year, the most recent year that IRS records are available.

The new board members appointed by DeSantis say the changes they are pushing will help bring more taxpayer resources to New College. DeSantis and Florida's Republican-controlled Legislature will be more likely to fund a school that is more accommodating to conservatives, they say.

DeSantis already has steered an additional $15 million in state money to New College for the current budget year.

Yet Lenger's tally indicates that whatever boost New College gets in state funding could be partially offset by a big loss in private donations, hurting the school's ability to fund a range of programs that typically are financed by the Foundation, including student scholarships and faculty supplements.

Debra Jenks, a DeSantis appointee who now chairs New College's Board of Trustees, said there also will be a push to collect more private donations. That money likely would have to come from conservative donors who support DeSantis and his plans for New College.

So far, the Foundation has not announced any new major gifts.

Interim President Richard Corcoran sent an email to alumni Friday, after this article published online, asking for their financial support.

"We need your continued support and commitment," Corcoran wrote. "Charitable giving to higher education is an investment in the future of not only our state, but also our society. I understand that the past few months have likely led to your support of New College being in flux."

"I also understand that in order to continue to support New College through philanthropic giving, you must feel a connection to our success and be invested in our mission and our future," Corcoran added.

New College stand to lose more than the amount Lenger personally has documented through direct conversations with donors. Lenger's informal tally doesn't include many lost donations.

For example, a letter signed by 156 New College alums blasts the direction of the college under the DeSantis board appointees and states that the signees are "withholding any future... funding" until "such time as we are assured Foundation funds will not be used to support the newly appointed Board of Trustee agenda."

Among those who have signed the letter are retired neurosurgeon Dr. David Goldman, U.S. Army Major and flight surgeon Dr. Benjamin Stork, University of Oxford anthropology professor Eben Kirksey and former U.S. Securities and Exchange Commission enforcement attorney Dorothy Heyl.

Donors upset with reorientation of New College of Florida

Donors are upset that New College is being reoriented by DeSantis, with the school serving as an experiment in conservative higher education reform. Among the first big moves by the governor's board appointees was to abolish New College's diversity, equity and inclusion programs.

Another big concern for some donors is that Foundation money is being used to pay Corcoran's compensation package. The new board fired former President Patricia Okker and hired Corcoran, the governor's former education commissioner, at more than double Okker's salary.

Corcoran will earn $699,000 in base salary and possibly more if he receives the 15% bonus in his contract. He also gets $104,850 annually in retirement benefits, an $84,000 annual housing allowance and $12,000 annual car allowance.

Under state law, only $200,000 in taxpayer money can be used to pay a university official's salary. Private donations must cover the rest.

The donors Lenger spoke to did not want to be identified. But a donor who canceled a planned gift of $1.5 million sent the Herald-Tribune an anonymous statement through an intermediary mentioning Corcoran's compensation package as among the reasons for holding back the money.

"I feel both sad and angry about the recent events at New College," the donor wrote. "The Republican Party, the party of less government, has intruded in my life and the life of qualified and deserving students. As a donor, my bequests were designed to give financial aid to those individuals and not be used to pay obscene compensation packages to unqualified politicians infiltrating our New College campus. I had withdrawn any bequests because I cannot imagine one dollar going to individuals who are only interested in their political aspirations."

Lenger said Corcoran's compensation package has harmed the "goodwill" Foundation officials had built up with donors.

"It is painful to watch the goodwill the Foundation Team created over decades dissipate over the last 2 months," Lenger wrote. "First, due to the Board of Trustees members selected. And now due to the controversy that donor intent may be overridden to fund approximately $1 million of Richard Corcoran’s total Compensation Package."

Christie Fitz-Patrick, an associate vice president at New College who also is now running the foundation on an interim basis after former Foundation Executive Director MaryAnne Young retired recently, and Jenks did not respond to questions about the Foundation's finances, how Corcoran will be paid and the impact of donors canceling their planned contributions.

The donors Lenger spoke with had New College in their estate plans, meaning the college wouldn't have received that $29 million immediately. But those donors also are canceling smaller annual contributions, she said.

Questions about interim president Richard Corcoran's contract

Alumni canceling annual contributions could hurt the Foundation's ability to function, especially with the organization now bound by Corcoran's contract. The Foundation must raise a certain amount just to cover operating expenditures. It paid out $1.3 million in salaries and benefits to fundraising staff in 2019, according to IRS records.

Replacing those contributions could be difficult. The college likely will have to tap a new group of donors.

“It’s obvious it has to be an entirely new constituency of donors who are responsive to the new mission because this is not the traditional mission of New College," said Esther Barazzone, a former New College Foundation board member who left amid the recent controversy. "It’s no longer donating to the traditional New College, so it will have to be a whole new donor base."

Jenks said recently that "there are other donors out there who will donate, who will help us, they need to see that we're making that progress."

Lenger is skeptical.

"While I hope the Chair of the Board of Trustees is correct that wealthy Republicans will step up and make significant donations," Lenger wrote, " I think that’s uncertain since the smartest plan would have been pay Richard Corcoran $200,000 until the new wealthy Republican donors could be secured."

Barazzone was among the first two students admitted to New College. She graduated from the school in 1967 and went on to a distinguished career in higher education, serving as president of Chatham University for 24 years.

When Barazzone's classmates gathered for a 50-year reunion, they identified at least $2 million combined in planned contributions.

Now Barazzone is canceling her planned donation.

"I and most of my friends have removed, or are removing, our bequests and have stopped annual donations," Barazzone said.

Barazzone is deeply opposed to what's happening at New College. She also believes Corcoran is unqualified to serve as interim president and that money donated to the college before DeSantis overhauled the board shouldn't be used to pay Corcoran, arguing donors never intended for their money to be used that way.

"I think it's utterly outrageous," she said. “This salary is dramatically out of line with comparable liberal arts colleges, as indicated by the contrast with Pat Okker’s salary.”

Jenks has said the Foundation has enough money to pay Corcoran, but Foundation board members say that's not clear.

Larry Geimer, the finance chair for the Foundation board and a certified public accountant with Kerkering, Barberio & Co., said during a recent Foundation board meeting that 99% of Foundation funds are restricted and that it's "a very, very huge question" where the money will come from to pay Corcoran.

Lenger and Barazzone are concerned that New College's board will try to tap Foundation funds for Corcoran's salary that weren't intended to be used that way.

“I don’t believe any donor to the foundation would have intended that their money be used for that purpose," Barazzone said.

This article originally appeared on USA TODAY NETWORK: New College of Florida takeover by Gov. Ron DeSantis risks donations