In November I wrote here about “The Debacle at Conner Prairie.” The gist of that piece had to do with how one of our most important and, by all accounts, successful cultural institutions was being brought low through the short-sighted mismanagement of its trustee, Earlham College. At that time, Indiana’s attorney general, Steve Carter, was still looking into the relationship between Earlham and Conner Prairie for signs of potential conflict of interest. At the end of January, Carter’s office came forth with recommendations.
Earlham’s history and the quality of its educational experience are not at issue here. But this sequence of ill-conceived, seemingly desperate measures threaten to cast a pall over what would otherwise be a great Indiana legacy. This is a tragedy in the making.
The attorney general found that, yes, there was a conflict of interest in the way Earlham was managing the trust created by Eli Lilly for the creation and support of Conner Prairie. The A.G. also recommended that an independent entity be set up to oversee the living history museum and its endowment. So far, Earlham and its president, Doug Bennett, have rejected Carter’s recommendations. Bennett insists there is no conflict, as he put it to the Indianapolis Business Journal, “either as the law or common sense understands that term.” People who have had the misfortune to observe this sorry sequence of events since last June, when Bennett summarily fired Conner Prairie’s president, John Herbst, along with all but a handful of Earlham board members, have been understandably mystified by the precipitate nature of Bennett’s actions. Bennett said the firings were due to the budget deficit the museum was running. But Conner Prairie’s budgets were approved by Bennett and his Earlham colleagues. Not only that, nonprofit organizations frequently run deficits — particularly when they’re going through a period of investment and growth, which is what Conner Prairie was doing. This was a crisis without a context. Conner Prairie’s finances might have been a cause for concern, but they did not warrant the radical coup d’etat that Earlham imposed. And why, given the attorney general’s recommendations, did Bennett and Earlham continue to so stridently insist they were in the right? The background necessary to understand Earlham’s actions is suggested by an internal Earlham document, Report of the Strategic Planning Committee, prepared for “comment and discussion among faculty, students, staff and members of the Board of Trustees.” This report is dated Aug. 30, 2002 — less than a year before the takeover at Conner Prairie. While virtually all coverage of the Conner Prairie crisis has centered on the museum’s budget issues, no attention has been paid to the chronic financial problems that have been facing Earlham for years. To quote from the report: “Our most important weaknesses and challenges take financial form. We struggle to find the resources we need to sustain the distinctive educational experiences we offer. Compensation of faculty and staff has fallen below the levels of peer institutions. Program budgets are cramped; faculty and staff feel too busy; some buildings look shabby.” The Report of the Strategic Planning Committee continues, “These financial challenges derive from persisting weakness in enrollment … we struggle even to reach our target enrollment of 1,200 students. This shortfall in students robs the operating budget of needed resources. One hundred fewer students means $1,500,000 less for the operating budget.” Earlham College has been suffering from a situation afflicting many small, liberal arts colleges. Faced with increased costs as well as competition for students, Earlham has had to rely on financial aid to attract young people. It has had to pay students to attend. According to the report, the college awards more than $8,000,000 a year in financial aid, which “is now the largest single item in our budget.” Yet, the report goes on, “Looked at from the standpoint of students and their families, however, our financial aid offers are not always seen as sufficient, nor competitive with other colleges and universities.” Compounding Earlham’s financial problems has been the inability of its Earlham Fund — money contributed to the college by alumni and others — to become a truly effective source of financial support. “The percentage of alumni who give to Earlham, however, is relatively low and the Earlham Fund has grown sluggishly over the past decade,” the report says. Now, perhaps, we can begin to understand why Earlham has insisted on hanging on to its control of the charitable trust left in its care by Eli Lilly. Earlham’s financial woes also place the attorney general’s concerns about a conflict of interest in higher relief. But nothing cited here can excuse or justify the peril that Earlham’s actions have placed Conner Prairie in. The resumes of Conner Prairie’s nationally recognized professional staff are said to be in the mail. Three development officers have already left. The museum has reportedly lost the support of 12 corporate sponsors and other potential donors are withholding funds because they fear dollars might somehow be diverted from the museum to Earlham. Earlham’s history and the quality of its educational experience are not at issue here. But this sequence of ill-conceived, seemingly desperate measures threaten to cast a pall over what would otherwise be a great Indiana legacy. This is a tragedy in the making. It needs fixing — now.