College’s use of Second Grant disputed by NH state representative

by Parker Richards | 10/20/15 7:09pm

A New Hampshire state representative is seeking to make Dartmouth more accessible for New Hampshire residents and students, and is bringing the College’s management of a century-old fund and the Second College Grant established by the state to help low-income students into question.

According to documents from 1807 when the New Hampshire legislature first gave 42 square miles of land in Coos County — now known as the Second College Grant — to the College, all revenues extracted from the property must be used to help low-income students from New Hampshire attend the College. Later, in 1883, the legislature appropriated $10,000 to Dartmouth with the condition that it create a fund for New Hampshire’s poor to attend the College.

The latter measure also required that the College submit annual reports on the use of the endowed fund — known as the 1883 State Fund — to the state government.

“Dartmouth is not above the laws of the state of New Hampshire, although sometimes it acts like it is,” state representative Renny Cushing (D-Hampton) said. “They took the money and ignored the law.”

Cushing has submitted a request for legislation to be drafted to bring Dartmouth in line with existing legislative demands, including the 1883 State Fund’s reporting requirement.

The College and Cushing are both discussing reporting options for the fund with the charitable trusts directorate in the state attorney general’s office, College spokesperson Diana Lawrence wrote in an email.

The current value of the initial $10,000 in the 1883 State Fund could be as high as $14,000,000 if it had been well-invested — as it should have been, according to the initial enabling legislation — Cushing said.

Cushing also claimed that the College has foregone a requirement that members of the state’s executive council, the president of the state senate and the speaker of the state house of representatives sit as ex officio members of the College’s Board of Trustees, as the governor currently does, when matters involving the management of the Second College Grant are under discussion.

The requirement may have been voided in the 1970s, however, after former College President John Sloan Dickey stepped down, history professor emeritus and unofficial College historian Jere Daniell said.

Even so, there was no record of any meeting involving the members of the legislature or executive council after the early 1920s, when the Trustees voted to allow the clearing of softwood forests by the Brown Paper Company of Berlin in the Second College Grant, Daniell said.

The harvesting of the softwood — which was meant to be carried out at 40-year intervals before forest management policies began to view clearcutting less favorably over the course of the 20th century — raised roughly $1 million for the College in the 1920s and 1930s, Daniell said.

The institution of land grants for colleges — even before the advent of land-grant universities in the latter half of the 19th century — was not uncommon, Daniell said. There exist several grants in New Hampshire for secondary schools and academies as well as a grant in Maine for Bowdoin College, he said.

Cushing began investigating Dartmouth’s use of state-appropriated funds during a broader look at college affordability in New Hampshire, an issue about which he is passionate. After recalling that Dartmouth had received numerous gifts from the state, Cushing began to investigate how those gifts were being used, he said.

In a pair of letters from Cushing to College President Phil Hanlon and Board of Trustees chair Bill Helman ’80, Cushing requested a variety of information about the reporting practices of the College to the state government in relation to both the 1883 State Fund and the Second College Grant’s revenues.

Lawrence wrote in an email that the obligation to use all funds from the Second College Grant to educate low-income New Hampshire residents was voided by a legislative act in 1919, when the state legislature began to allow the College to use surplus funds for general purposes.

Some of the funds from the grant were utilized to build the President’s House, Cushing said.

“I don’t begrudge President Hanlon living in public housing, but we’d like to see that students from New Hampshire growing up in public housing in Portsmouth or Nashua or Berlin have the same opportunities for education that President Hanlon had,” he said.

Dartmouth has more than two dozen endowed funds aimed at helping students from New Hampshire, Lawrence wrote. In total, these funds have accounted for $8,178,139 in scholarships for New Hampshire residents between 1999 and 2014, the years for which data are available, she wrote.

Over the same period, the College has awarded a total of $23,792,216 in financial aid to residents of New Hampshire, and at no point in the 15-year period has the total aid awarded to New Hampshire residents failed to exceed the amount awarded from the endowed funds by any less than $450,000, Lawrence wrote.

For nine of the years in the period, the endowed funds earmarked for New Hampshire residents accounted for less than half of the total scholarships awarded to New Hampshire residents, and in five of those years they were less than a third of the total, she wrote.

The awarding of scholarships to New Hampshire residents is “greatly in excess of the distribution from endowment funds earmarked for this purpose,” Lawrence wrote.

“Dartmouth has certainly done an immense good for New Hampshire as a whole and for students from New Hampshire,” Daniell said.

The Second College Grant has more often cost the College money than raised funds, Daniell said. Even when it is profitable, the limited income from forestry and rented cabins cannot support massive volumes of scholarship funding individually.

Cushing claimed that Dartmouth’s chief investment officer Pamela Peedin’s annual compensation — $1.074 million in 2014, according to the College’s tax returns — exceeded the amount of scholarship funds awarded to New Hampshire residents in the same period.

Cushing also raised objections to the current uses of the Second College Grant. While no provision had ever stated that the grant must remain open to New Hampshire residents, Cushing said the fact that the state paid for roads and bridges in the grant implies that some public use of the grant could be valuable.

“It seemed like it was turning into a wilderness theme park solely for the enjoyment of the Dartmouth family,” he said. “A graduate of the Tuck School who is a hedge fund operator in New York City can have access to the grant and the wilderness experience, rent a cabin at below market rates, but somebody who lives in Berlin can’t go up and rent a cabin.”

Cushing attempted to rent a cabin in the grant and was told he could not, since he is not affiliated with Dartmouth, he said.

Dartmouth general counsel Bob Donin declined to comment through Lawrence. His office will primarily manage the ongoing legal and legislative issues regarding the Second College Grant and the 1883 State Fund.