Fisk University’s $30 million cash windfall from the sale of half its ownership in the prestigious Alfred Stieglitz Collection of art and photographs has yielded the university far less discretionary income than might have been expected based on the institution’s insistence for several years that the controversial sale could set the stage for securing the university’s long-term future.
In a statement released last week, the university said it paid $2.4 million in legal fees for the seven years of litigation it waged to win court clearance to sell the interest in the art collection to the Arkansas-based Crystal Bridges Museum backed by Wal-Mart heiress Alice Walton.
The university also agreed, according to court records filed last week, to deposit $3.9 million of the $30 million into a restricted endowment to support for perpetuity the cost of care and exhibition of the collection by Fisk or “any future owner” of its 50-percent interest in the new entity that will own the collection in conjunction with Crystal Bridges. The court document made no such stipulation with respect to a future owner of the portion of the collection now owned by the Arkansas museum.
Fisk also said it was paying $3.483 million to settle outstanding bills to various vendors, settling local bank loans of $1.6 million (it had mortgaged nearly all of the university’s property) and repaying its depleted endowment some $7.4 million in loans with interest. In the early 1990s, before current president Hazel O’Leary took the helm of the institution, the university borrowed regularly and heavily from its endowment as enrollment and fundraising began to decline.
Fisk also said it was putting $5 million of the $30 million into a fund to support “initiatives” of the university’s new president. O’Leary is retiring in December, and the university is on the hunt for a new chief executive.
Creation of the $5 million fund was seen by observers as an additional lure for prospective candidates wiling to take on the job of helping the university stabilize and secure its future. Its fundraising has been weak over the past 20 years, and enrollment has dropped to nearly 600 students, half the student count the school claimed in its heydays a few decades ago.
The university said that, once outside obligations were settled, it would have $22.4 million to “strengthen” the Fisk endowment. Once all the bills are paid and special accounts established, however, an analysis of the information suggests that amount shrinks to about $12 million in restricted endowment money whose income could be used directly to support the historic school.
