The board of the New College Institute in Martinsville signaled Friday that it’s prepared to file a lawsuit against its foundation.
The two parties have been at odds since the foundation, which was established to raise money for the state-run higher education center, rebranded itself in February in an attempt to broaden its reach in the community.
After a lengthy closed session, the board reconvened to vote unanimously to name board members Richard Hall and Hubert Harris as liaisons to the Office of the Attorney General and outside counsel. They will handle “the litigation against the foundation that has been approved,” to include retaining outside counsel “to resolve and/or ligitate the matters discussed in regard to the foundation.”
The institute’s foundation has been under scrutiny by the Virginia attorney general’s office to determine whether it can legally expand its mission beyond financial support of the New College Institute. The foundation changed its name to the Martinsville-Henry County Academic Foundation (MHCAF).
In February, the AG’s office — at the behest of NCI — asked the foundation to pause funding any projects outside of NCI until the legality of doing so was determined. At first, it looked like the foundation would pause all its activities. That would have included the scholarships it has awarded annually to students in partner school degree programs taking classes at NCI.
After another letter from the AG’s office, coordination resumed between NCI and the foundation to promote the 2023 application period for the scholarships, which closes in early June.
After the April 28 meeting, vice chair Richard Hall and MHC Academic Foundation Executive Director Kevin DeKoninck declined to comment. The spokesperson for the attorney general’s office also declined to comment.
Executive Director Joe Sumner, who joined NCI in February, gave his first report during the meeting, which was broadcast via Zoom. He explained he’s been on a “listening tour” in his early weeks on the job, asking everyone he can about “the good, the bad and the ugly” of NCI’s tenure. “Give it to me and let’s figure out what NCI can do to be an engaged member of this community and provide workforce solutions,” he said.
The higher education center, founded in 2006 by the state, has a broad mission: To serve as an economic catalyst, technology and workforce booster, higher education and workforce training facilitator, and public school partner.
That lengthy to-do list may be a factor in the institute’s struggle to find its footing in the Martinsville-area education landscape.
Correspondence obtained through the Virginia Freedom of Information Act indicates years of finger-pointing between the boards of the institute and the foundation. Members of the NCI board have criticized the foundation for the lack of funds it has raised for NCI’s benefit; meanwhile, foundation leaders have criticized NCI’s low enrollment, saying it doesn’t have much to fundraise for.
It’s also been about six years since the Harvest Foundation, a leading philanthropic organization in the area, withdrew its financial support from NCI for failing to become a four-year college in the time since it was established. Harvest had promised $50 million if it did so, and contributed about half of that by early 2017 before canceling the rest of the deal. (Disclosure: The Harvest Foundation is one of our donors but donors have no say in news decisions; see our policy).
There’s still a significant amount of money at stake, though it’s not from an outside benefactor.
In 2020, the foundation sold NCI’s Martinsville campus building on the Baldwin Block, which was completed in 2014 for a cost of $18 million.
The commonwealth bought the building for $7.5 million.
Now, that money — part of a total of about $12 million in assets held by the foundation — is on the line. In the foundation’s view, the money from the sale of the building isn’t restricted for use only for NCI. If the foundation is permitted to widen its support beyond the Martinsville campus, it could use the money from that sale toward other pursuits. But the NCI board believes the foundation and its fundraising efforts are beholden to the institute.
Scholarships for NCI students can’t be touched if it takes on other projects. The foundation manages 13 scholarship funds. For the past several years, the foundation has only received scholarship contributions of around $5,000 to $8,200 each year, but it has about $1 million in an endowment fund that’s earmarked for those awards.
Scholarship awards have varied from year to year, with some seeing close to $50,000 disbursed, while other years seeing far less given out.
It’s unclear at this point how many scholarship applications the foundation will receive and how many students will be enrolled in programs taking place at NCI in the fall.
NCI currently partners with Longwood University to provide bachelor’s degree programs in social work and education, Radford University’s master’s in strategic communication, Bluefield University’s master’s in counseling, and Virginia Tech graduate degrees in educational leadership and policy studies.
Sumner also noted efforts to reconnect with higher education institutions that previously had partnerships with NCI, along with growing the relationships it currently has. Sumner spoke in particular of his desire to establish partnerships with Historically Black Colleges and Universities (HBCUs). The closest HBCUs to Martinsville in the state are Virginia University of Lynchburg, a private school with about 750 students between undergraduate and graduate programs, and Virginia State University in Petersburg.