RALEIGH, N.C. – Angered by major changes designed to boost revenue at Peace College in Raleigh, including a name change and a decision to admit men, some donors are ending their long-term support of the school.
Betsy B. Boddie, a 1946 graduate who has contributed to the school financially for decades and served as a trustee for nine years, says she has removed Peace from her will and stopped payment on a pledge she made to the school during a recent capital campaign.
The wife of a founder of Boddie-Noell Enterprises, the Rocky Mount company that is the largest franchise operator in the U.S. of Hardee’s restaurants, Boddie describes the level of her support as “generous.”
Karen Sinclair, a 1980 grad who owns a public-relations company in Raleigh, says she has stopped making payments on a $10,000 pledge and no longer will be making annual gifts, which over the last 10 to 15 years have ranged from $500 to $1,000 a year.
Jamie Mitchell, a 2000 graduate and spokesperson for “Preserving Peace College’s Legacy,” an alumnae-based group opposing the recent changes, says she has stopped giving.
And Penny Spangler-Lambert, a 1979 grad who lives in Charlotte, says she resigned from the college’s board of trustees in early July, just weeks before Peace’s latest announcement.
Debra Townsley, who became president of Peace Aug. 2, 2010, says the changes are necessary for the 600-student private school because its revenue model depends more on tuition and enrollment than on fundraising.
“Change is always hard,” she says. “So people will have to make up their minds about which way they want to go with this.”
With expenses increasing every year, and unrestricted annual support accounting for only 2 percent of the school’s $18 million annual budget, she says, the board of trustees determined higher enrollment is necessary.
Julie Ricciardi, vice president of development and alumnae affairs for Peace, says that while the school depends on its alumnae, “enrollment is what’s driving our institution in terms of revenue. We believe to preserve Peace and make it stronger, we have to increase enrollment.”
Frustration among donors
Discontent with the direction of the college began shortly after Townsley’s installation a year ago as the school’s 10th president, says Jamie Mitchell, who cited “drastic, radical changes,” including firing of faculty and staff; elimination of a separate office of alumnae affairs, which the school says was rolled into the development office; and a reduction in the number of majors offered.
Karen Sinclair, immediate past president of the alumnae board, says the school’s alumnae all anticipated change.
“But the change has been constant and many feel it’s been reckless,” she says. “Alums have felt alienated and disrespected since the beginning of this president’s tenure.”
But the level of opposition surged on July 21, when the school announced the board’s decision to admit men to the day program beginning in fall 2012 and changed the name of the school to William Peace University, moves that alumnae and donors say they were told about only after the school announced them publicly.
“I had heard nothing,” says Boddie, whose daughter and two granddaughters also graduated from Peace. “They did everything in secrecy. They made huge decisions without consulting the women who graduated and supported this school for years. That upsets me more than anything.”
Spangler-Lambert, while believing that some sort of evolution was necessary, says communication of the changes made by trustees was poor.
“We all know change needs to happen,” she says. “But it’s how you go about it. The major word for me is ‘respect’ — respect for feelings and to be heard; that’s very important.”
Sinclair, who says she heard about the changes on a breaking-news alert, echoes that frustration.
“I’m most upset about the deceit and the secrecy involved in the change,” she says. “If it’s such a great idea, it’s a simple matter to engage all stakeholders and get buy-in. Instead, they’ve alienated the people who love Peace the most.”
She says she “can’t see why anyone would continue to give money to an institution that has changed its mission so drastically and has left people out of the conversation altogether. The board has not engaged stakeholders in an open and transparent way.”
Lou Mitchell, an alumna and co-chair of Peace’s capital campaign that ended last year and raised $23.4 million, believes change was needed and says some donors may come back.
“Once people get over the shock of it, I think they’ll still feel that loyalty,” she says. “I hope everyone will continue to be loyal to Peace, because it’s well worth being loyal to.”
The case for change
Tuition accounts for roughly 80 percent to 85 percent of revenue at Peace, while endowment generates about 11 percent and unrestricted annual fundraising generates about 1 percent to 3 percent, Townsley says.
Total unrestricted gifts in a typical year range from $200,000 to $600,000, and this year are expected to total roughly $500,000, she says.
With expenses increasing every year, the school needs more revenue, she says, and has only two ways to get it – higher tuition or higher enrollment.
“You can’t increase at the same rate we have been,” Townsley says of tuition. “We can’t continue to put the burden on families. So the number of students has to increase.”
The “driver,” she says, “has to be what’s best for satisfying student needs.”
The decision to admit men to the college is part of the plan to grow enrollment to about 1,000 students from about 600 over the next three to five years.
Ricciardi, the school’s chief development officer, says that while the decision may cost the college fundraising revenue, the move is necessary.
“Enrollment is pivotal,” she says. “We knew going into this we may see a decline in giving.”
The school so far has received calls from only two “major” donors, or those donating $25,000 or more, who will not continue to give, Ricciardi says.
And based on outreach to major donors, she estimates the school will have the support of about 70 percent of those contacted.
“Our alumnae are crucial for our future and preserving our history,” she says. “But we have to be realistic. Annual, unrestricted support is always a pretty small part of a budget when you’re operating a major institution.”
Megg Rader, a 1981 graduate who was a member of the strategic-planning task force that recommended the changes to the board of trustees, says she will continue her financial support of the college.
“I love and care for Peace,” she says. “I want it to succeed and be a better school. I don’t want it to close its doors.”
Townsley, noting that alumnae need time to adjust to the changes, says it is too early to tell how they will affect fundraising over the long-term.
“We understand their angst and are sorry they feel that way and we understand they wish is wasn’t so,” she says. “It was special for them when they were here and we understand that.”
That said, she says, the trustees’ decisions are driven by a commitment to Peace and a belief in the strong heritage of the school.
She also says change has been a Peace hallmark during its 150-year history.
“The school has been successful because of the changes it has gone through,” she says. “It’s gone through many iterations, which is what an institution does if it’s going to keep up with the needs of students.”
Still, some long-time donors and alumnae remain frustrated with the college’s leadership.
“A good trustee is not only a good business person, but they make their decisions with their heart as much as they do with their mind,” says Boddie. “And that’s not what this board has done. They have no heart. They have been ruthless.”