WC Voices

09/02/2025

Case Study: La Salle University – A Cautious Turnaround Narrative
What Went Right

Enrollment Surge – La Salle welcomed over 700 new full-time first-year students in fall 2025—an increase of approximately 40% over the previous year—marking its largest incoming class since 2018

Strategic Initiatives – Success was driven by introducing four new sports teams, expanding academic programs, and putting a strong emphasis on enhancing student experience

Selective & Leaner – The university simultaneously reduced acceptance rates and decreased its discount rate (grant aid) to improve financial sustainability

The Philadelphia Advantage

Urban, Dense, and Marketable — Positioned in Philadelphia, La Salle draws from a large—and diverse—applicant pool. Its proximity to major urban resources offers marketing leverage that rural campuses like Washington College can’t match.

Treading Muddy Waters

Financial Fragility – Despite the enrollment uptick, audited fiscal data isn’t finalized yet. Leadership admits the rebound will “help the school’s financial picture,” but cautions that challenges remain

Accreditation Warning – The Middle States Commission raised concerns about La Salle’s planning, resource management, and institutional advancement—threatening accreditation unless issues are addressed by February

Debt Restructuring & High Spending Rates – La Salle restructured debt to defer payments and conserve $24 million through 2028
Inquirer.com Year-over-year, its net tuition revenue plummeted to $45 million — about half what it was in 2015
Inquirer.com Meanwhile, the school has relied on endowment spending rates significantly above the norm (8.6% vs. a typical 5%)

Credit Downgrades – Fitch downgraded La Salle’s bonds to BB- with a negative outlook, citing financial uncertainties despite the university monetizing assets and retooling enrollment strategies

Operating Losses & Asset Sales – The 2023–24 operating budget still showed multi-million-dollar losses—partially mitigated by selling property and reserves. Cuts and restructurings were ongoing

Washington College vs. La Salle
La Salle Washington College
Location Urban, high-density, Philadelphia Rural, smaller applicant pool (Chesapeake/Chestertown)
Enrollment Strategy Added sports; expanded programs; improved experience Needs approaches aligned to place-based strengths (e.g., Chesapeake studies, environmental science)
Financial Health Still fragile despite gains; debt and credit issues Likely similar or worse; structural deficits and discount pressure noted previously
Sports Expansion Leveraged but caution advised—expensive and risky Further sports growth could strain resources unless tightly managed
Student Experience Central focus of rebound strategy Critical lever, though underinvested historically
Takeaway: Turnarounds Are Possible — With Eyes Wide Open

La Salle’s story is one of real progress—but not without significant caveats. Growth is happening, but the financial and accreditation foundations are still in flux.

Washington College can draw three key lessons:

Focus on student experience, leveraging unique regional strengths rather than costly expansions that may not yield proportional returns.

Maintain financial discipline and transparency—avoid over-reliance on debt, high endowment draw rates, and property sales without long-term planning.

Consider strategic enhancements, not blanket growth—reinforce what’s working (e.g., niche programs, experiential education) rather than adding athletic programs without clear ROI.

https://www.inquirer.com/education/lasalle-university-enrollment-increase-temple-delaware-20250901.html

First-year enrollments at many area colleges are trending upward, but schools caution that final numbers won't be available until a little later in the semester.

08/23/2025

We get messages like this a lot - we have yet to evaluate the real estate transactions of the past 15 years or so. We did look up this transaction however and it is accurate, just not complete. ***Update*** A generous alum donated the house, and is maintaining as well, according to our very own Beth Skinner. Thank you Beth for pointing this out!

08/22/2025

Bond / Debt Covenants

Folks — if WC Voices stands for anything, it’s being a beacon of truth. We’ve got to shine the light on what’s been hidden.

Here’s the truth in plain English:

• The Board looked the other way while the College drained cash and papered over losses.
• The finance office kept moving money around — restricted gifts, endowment draws — just to make the books look balanced.
• The outside audit firm signed off year after year, even as the operating hole blew up from a few million to $28M, then $36M.

That’s not prudence. That’s playing with fire.

Washington College is broke on two fronts:
1. Cash on hand — WC promised lenders 90 days’ payroll in the bank. By 2023, it was down to a few weeks.
2. Budget coverage — WC promised revenues would cover debt. In 2023–24, expenses outran revenues by $28–36M. Coverage was zero.

The only way they “looked compliant” was by raiding restricted gifts and yanking $19M+ from the endowment. That’s not revenue — that’s robbing the future to pay today’s bills.

What this means for Chestertown:
• A 243-year-old anchor institution can’t survive on smoke and mirrors.
• If bond covenants break, lenders can call the debt. $60M. Even if they don’t, downgrades slam the door on refinancing.
• If UPMIFA rules are stretched, the Maryland AG can step in.

And here’s the part Bryan needs to understand and the entire Board can’t dodge:
The current Board leadership, the finance team, and the auditors who blessed this need to go.

If we don’t tell it straight, nobody else will. And if Bryan wants to steer the ship, he needs to hear — loud and clear — that the old guard in Board, finance, and audit must go.

08/18/2025

Primer: How College Endowments Really Work

Let’s take a time out here for a second to talk about endowments — because drawing from the endowment looks casually minimal to the outside eye. The College says “8%,” which doesn’t sound crazy. But here’s what’s really going on.

An endowment isn’t one big pot of cash a school can spend however it likes. Most of it is donor-restricted — money given with strings attached, like “only for biology scholarships” or “only for a professorship.” That principal is legally off-limits for paying salaries or keeping the lights on. At best, the school can use some of the earnings (investment returns) for those specific purposes. Even then, the accepted best practice in higher education is to spend no more than 5% a year to preserve the fund’s long-term value.

The only flexible portion is the unrestricted or quasi-endowment — money the College itself set aside or donors left without conditions. This is the usable slice. And this is where Washington College’s own audits show the real damage: instead of taking 5% a year, the College has been draining 20–30% annually from that slice to cover payroll and deficits.

So while “8%” sounds small when measured against the whole $400 million endowment, the truth is different. The usable portion of that endowment never grew beyond about $60 million. Pulling $15–19 million a year out of that pool isn’t 8% — it’s closer to a third.

That’s not cautious management. That’s burning the furniture to heat the house.

Where to find these numbers yourself:
Every dollar above comes from the College’s own filings:

Audits (2015–2024): Look at the “Statement of Financial Position” and the footnote titled Endowment Funds (typically pp. 17–26, depending on the year).

IRS Form 990s (2015–2024): See Schedule D, Part V for the restricted vs. unrestricted breakdown, and Part VIII for the amounts appropriated for operations.

Both sets of documents are public, signed under penalty of perjury (IRS) or by the College’s outside auditor (CLA).

08/18/2025

Ok, to respond to the College’s responses to the Sun’s questions. As the reporter herself admitted, she didn’t have the training to test their claims. Let’s cut through the obfuscation. It’s not hard to pierce the veil — it just takes actually reading the College’s own audits and IRS filings. That’s what we’ve done.

Our point remains: the Board needs to be considerably smaller, more nimble, and guided by a real performance-based plan (we have several workable examples of what that looks like). There’s very little “opinion” here — almost all of this comes directly from the College’s IRS filings and its own paid-for audits.

No one likes to say they’ve manipulated numbers, but if the school were truly running break-even:

The endowment would be growing on a cash basis, as donors continue to give.

Debt would be paid down.

The “$19M fundraising years” they brag about would show up in the bottom line.

Instead, we see the opposite.

Let’s take the Baltimore Sun article statement by statement, by Rick Wheeler (Board Chair) and others:

College officials: “Its budget faced structural issues as a result of declining enrollments… without a comparable drop in its largest expense, salaries and compensation.”
Rebuttal: Enrollment did fall (1,515 in 2011 → 923 in 2024), but administrative salaries and cabinet pay rose, not fell. IRS 990s show presidential comp around $400–450K plus perks, and other VPs over $250K. For a school under 1,000 students, these are top-quartile salaries. Staff cuts hit visiting faculty and junior staff, not the executive suite.

Rick Wheeler: “We made some tough decisions… some right-sizing decisions.”
Rebuttal: Those “decisions” trimmed ~40 positions, mostly visiting professors and staff, while audits show millions each year in professional fees, legal fees, and severance for failed presidential hires. Tough decisions weren’t made at the top — the revolving-door presidents and consultants burned far more cash than the staff savings. Sosulski leaving right after a contract renewal raises questions: what was the cost? No one has answered. Since Bair, severance alone has run to about $1M.

“The school shed nearly 40 staff positions… did not let any tenured or tenure-track professors go.”
Rebuttal: True, but misleading. Savings came from temporary staff. Meanwhile, operating deficits ballooned — FY-2023’s structural shortfall was –$28M. Cutting junior staff didn’t solve structural overspending.

“Sosulski… took a (2 week) furlough and a 20% pay cut. The latest 990 shows his salary was $441,251 plus $68,560 in other comp in 2024.”
Rebuttal: Even after cuts, that’s half a million in comp for fewer than 1,000 students. Presidents at peer schools (similar size and budget) average $250–300K. And the churn — five presidents in ten years — has cost millions in severance and search fees.

Mark “Bo” Connell (VP Finance): “The paring of expenses and a lean, zero-based budget going forward should serve the school well. If we manage the budget this year, we will be on a more stable footing.”
Rebuttal: Audits show the opposite. FY-2024 expenses outstripped unrestricted revenues by $36M before restricted releases. You don’t close a $36M hole with “zero-based budgeting.” The College has been plugging deficits by raiding the endowment, liquidating investments, and reclassifying restricted gifts — not by balancing operations.

“College officials say it has had total operating deficits in two of the past ten fiscal years.”
Rebuttal: Flatly false. Every year 2015–2024 ran a deficit once restricted releases and endowment maneuvers are stripped out. Audits confirm: FY-2022 –$7.8M GAAP loss (–$16M structural), FY-2023 –$28M structural, FY-2024 –$36M structural. That’s ten years of deficits, not two.

“The current budget calls for an 8% draw [from the endowment].”
Rebuttal: Industry best practice is 5% or less. WC repeatedly drew $12–19M per year — closer to 8–10% on paper. But when measured against the usable unrestricted endowment, the effective draw was often 20–30% in a single year. That’s not “managing the endowment.” That’s eating the seed corn.

John Moag (emeritus board member): “We’ve just got to sell it better.”
Rebuttal: Marketing alone doesn’t fix $30M annual operating holes. Enrollment fell 39% despite “selling.” Students are voting with their feet, and the cost structure is broken.

Wheeler (Board Chair): “The board will soon name an interim president and give itself up to two years to find the right leader.”

Rebuttal: That’s exactly what they said in 2015, 2018, 2020, 2021, and again in 2025. Each cycle cost millions in severance and search fees, with nothing to show but turnover and drift.

This time, it looks likely the interim will be Bryan Matthews — a Washington College alum with deep Kent County roots, strong community support, and broad goodwill. That choice will be welcomed locally, and frankly, the “devil we know” is better than another outsider misstep.

But let’s be clear: even a good interim doesn’t erase the wasted money and years lost on a broken search process. If the Board repeats its old pattern, two more years of consultants and churn will just add to the damage.

“Administrators and faculty say they are heartened by a slight uptick in enrollment and a $15M gift to launch a new business school.”
Rebuttal: One-time gifts don’t fix recurring losses. A $15M restricted gift for a new business school doesn’t cover $20–30M annual operating gaps. And the “uptick” is from a collapsed base — 923 students is still down almost 600 from 2011.

Not two deficits in ten years. Ten deficits in ten years — in the College’s own audits

08/17/2025

Not all the news this weekend is heavy and foreboding. Word around town is that Dr. Bryan Matthews ’75 is stepping out of retirement to serve as Washington College’s interim president. If true, that’s about the best news we’ve had in a long while.

Matthews isn’t some outsider. He’s one of us — alum, coach, lacrosse coach, longtime Athletic Director. Folks who worked with him know he’s straight-shooting, focused on performance, and not afraid to be transparent. Those are exactly the traits this school has been missing.

What this could mean:
• A leader with credibility among students, faculty, alumni, and Chestertown.
• A coach’s mindset — results matter, not excuses.
• A chance to finally see some honesty and daylight in how the College is run.
• Stability at a time when both the school and community need it most.

The question is simple: will the Board let him lead, or will they keep doing business as usual?

For now, if this rumor holds, it’s a rare win for Washington College and Chestertown alike. We would endorse Bryan for sure. Attached is an article highlighting his credentials.

After 22 years as Director of Athletics at Washington College and a total of 38 years working in higher education, Dr. Bryan Matthews has announced his retirement from the institution, effective July 7th. Matthews has presided over the College’s Athletic Department during an era of expansion and s...

08/12/2025

Why This Group of 500 Matters
Washington College isn’t just a school. It’s the anchor employer, the cultural heart, and the single largest economic engine in Chestertown and Kent County. When the college is strong, the town is strong. When it’s in trouble, the ripple hits every business, property owner, and taxpayer here.

Background & Significance
This place has been around for over 240 years. Generations of locals have worked here, studied here, or had family on the payroll. It attracts visitors, fuels the rental market, and feeds business to Main Street. It’s one of the only reasons we have a year-round economy at all. That’s why it’s worth looking closely at how it’s been run over the last decade — because the decisions in those boardrooms directly affect the future of our town.

What the Records Show (2015–2024)
Every number below comes from the college’s own annual audits or IRS Form 990’s.

• Operating Losses – Year after year, the school has been spending far more than it brings in from tuition, fees, grants, and normal operations.
- The worst was FY-2024:
- True cash gap before pulling in restricted gifts: –$36.4M on an ~$81M budget (~45% shortfall)Washington College Summ….
- Even after using $15.7M in restricted funds meant for specific purposes, they still booked a GAAP loss of –$20.68M — the biggest red ink of the decade.
- FY-2023 looked like break-even, but only on paper:
- $28.2M in restricted funds used to plug the budget.
- Without that, the deficit was ~40% of expensesWashington College Summ….
- Similar patterns show up in 2015–2022: structural deficits masked by one-time gifts and endowment draws.

• Endowment Draws & Restricted Funds –
- Annual pulls from the endowment for operations have been huge — $8.5M–$19.2M in most years since 2015.
- On top of that, millions in donor-restricted money was reclassified each year to cover general bills — $9M, $15M, even $28M in some years.

• Administrative Pay & Staffing –
- Top admin pay is at the high end for a school this small (under 1,000 students).
- Multiple VPs, “chief of staff,” and other high-salary roles persisted even during deficit years.

• Professional, Legal & Headhunting Fees –
- In some years, these topped $1M+ — not counting standard audit fees — largely tied to repeated presidential searches and legal disputes.

• Leadership Turnover & Severance –
- Four presidents in less than a decade.
- Each departure came with severance packages — sometimes in the hundreds of thousands — plus new search costs.

What the College Says
Recently, because of one of the newer followers of WC Voices, the Baltimore Sun reached out to me for comment — which gave me the chance to hear the school’s official statements about me and this group. Here’s what they told the paper:

“Skip Middleton and WC Voices is not looking or interpreting 990’s and annual audits properly.”

“We’ve only had one donor change his mind about one donation to the tune of about $300k.”

“We struggle as all independent small colleges do, nothing more or less for the most part.”

Fact Check

The audits don’t lie. Deficits of $20M–$36M in a single year are far from “struggling like everyone else.” These are among the worst operating gaps, as a percentage of budget, of any small liberal arts college in the country.

The “one donor” claim is false. Multiple high-value donors — over $1M in combined commitments — have attenpted to pull support in recent years, including an endowed position, property-related gifts, and a community center renovation fund that ended in legal action. These examples are what WE know about, like mice, if you see one or two, you can imagine there are more.

Saying this is “just like other small colleges” ignores the scale: many of the school's peers run deficits in the low single digits, not 30–45% of the budget.

Comparison to Similar Colleges
Schools our size that survive keep deficits under 5%, hold admin pay in line with enrollment, and tap the endowment sparingly to preserve it for the future. Washington College’s decade-long habit of using restricted gifts and heavy endowment draws to cover basic operations is well outside normal practice.

Impact on the College & Town

If this continues, the endowment’s usable portion will shrink, limiting options in a real emergency.

Enrollment shortfalls, plus a reputation for instability, make recruiting harder — meaning less money coming in and more dependence on big donors.

For Chestertown and Kent County, a weakened Washington College means fewer jobs, less tourism, and less business for our restaurants, shops, and service providers.

Closing
This isn’t about politics or personalities. It’s about math — and the math says the college has been living beyond its means for years. The Board of Visitors & Governors and the administration have chosen to paper over the gaps with short-term fixes instead of long-term discipline. If we want Washington College to be here for the next 240 years, that has to change — now.

08/04/2025

Sent: Monday, July 28, 2025 1:35:56 PM
Subject: Update from the Board Chair

Dear Staff and Faculty,

I hope you're all enjoying the summer and looking forward to the start of the new academic year. While 2025 has presented its share of challenges, Dr. Mike Sosulski’s decision to resign as President adds another that we now need to address. I know many of you are wondering about the process and timeline for selecting an interim President, as discussed at last week’s campus forum and in subsequent communications. Over the past few weeks, I have been consulting with key leaders across the campus community to gather insights on what qualities we need in an interim President, the process for recruiting them, and how we can position ourselves for a successful search for a full-time president.

I've spent a lot of time listening to faculty, staff, alumni, and current and former Board members. There is strong support for having someone with an existing relationship with the College take on this important role, and I agree with that sentiment. Several potential candidates have been discussed, and I am confident that we will find the right person to lead the College during this transitional period and continue the positive momentum we’ve been building.

While no final decisions have been made yet, a broad consensus has emerged that the interim term should not exceed 24 months. This time will allow us to find the right leader for Washington College, rather than settling for someone looking to lead a college. Our goal is to have an interim President in place as soon as possible, but no later than the end of September.

The past academic year was challenging for everyone, but please know that many of the tough decisions have been made. Washington College is well-positioned to emerge stronger as a result. We are excited to welcome over 300 first year and transfer students to campus in just a few weeks, marking a promising start to the 2025-26 academic year.

On behalf of the Board of Visitors & Governors, I want to express my sincere gratitude for your continued dedication to the success of Washington College. We will keep the campus informed as we move through this process.

Sincerely,
Richard T. Wheeler '86
Chair, Washington College Board of Visitors & Governors

08/04/2025

Washington College Spent $12 Million on Legal & Consulting Fees — To Fix Its Own Mistakes
Over the past 10 years, Washington College has spent more than $15 million on "professional fees."

That includes (by our estimates):

~$850,000 for routine annual audits

~$650,000 on search firms-

What’s left?
Roughly $13.5 million.
And the majority of that — over $12 million — appears to have been spent on legal and consulting fees.

Not for strategic growth.
Not for innovation.
Not even for compliance.

But to:

Unwind or renegotiate major gifts

Fight with donors over promised returns

Resolve misused or poorly executed restrictions

Outsource scholarship management after internal missteps

In multiple cases, donors had to retain attorneys just to reclaim unspent or mismanaged gifts. The College responded in kind — sometimes rotating through six or more outside lawyers on a single dispute.

The result?

Millions in legal bills

Donor relationships permanently damaged

Deferred opportunities for students who were supposed to benefit

This isn’t just bad optics.
This is structural mismanagement — where fundraising wins are quietly offset by legal losses.

You can’t fix a college by paying lawyers to clean up broken promises.

Until governance is overhauled, the cycle will continue:
Gifts in. Mistakes made. Lawyers paid. Major donors gone.

And here’s the hidden cost:

We’re aware of at least $7 million in pledged or donated gifts that have been rescinded, reversed, or are now locked in legal disputes — much of it quietly, and at great legal expense.

And if that $7M are 2-3 roaches we see?
We worry about what’s still hiding in the walls.

You've seen some weak attempts to crow about capital campaigns. Scholarship funds pulled, targetted donations pulled, hell in one situation the school attempted to lay claim to expensive real estate who only had use of premises donated. And that use of premises? Gone- after my conservatice estimate of about $200k in legal fees.

08/04/2025

Let's visit one important note, and we'll use just the 2024 audit that the college commisioned and has done for many years.

Washington College used $15.7 million in temporarily restricted funds to support core operations — funds that were earmarked by donors for specific purposes or timeframes. If those restricted funds had not been available or eligible for release, the College’s operating revenue would have dropped from $70.8 million to just $55.1 million. Against $81.2 million in expenses, that would have resulted in a $26.1 million operating deficit — over 31% of its budget. In other words, without that restricted money acting as a lifeline, the College’s financial strain would have been immediately visible and potentially catastrophic.

$26.1 million operating deficit — over 31% of its budget - 2024 Year Only.

Are you all reading this? All of these audits are public documents, I've been asking for these for some time and they were filed mid-May. I'll comment below on the repurcussions and all the debt.

07/23/2025

In 2015, Washington College spent $891,000 to raise $928,000.
That’s not a typo. The net gain? Just $37K—before factoring in internal overhead like staff time, salaries, or event planning labor. Strip those out, and this was likely a break-even stunt at best.

But this wasn’t an outlier. It was a structural failure.

According to the 2015 IRS Form 990 (covering FY2014–15), President Sheila Bair had just stepped in. Reiss was still lingering. And the Board Chair? Larry Culp.

Let’s be blunt:
Effective nonprofit fundraising aims for a $4 to $5 return on every $1 spent.
Even a conservative benchmark would have targeted $2.7M raised on $891K in expenses. Ideally? $3.6M–$4.5M.

Washington College delivered $0.04 per dollar burned.
You’d have done better lighting the $900K on fire and asking for change.

How was that $891K spent? Great question. Hopefully someone got a few unforgettable nights out of it. Even the Sig Toga party had better ROI. And frankly, my Harvard Business School experience never imagined a case study this reckless.

This isn’t “news.”
It’s a decade-old alarm bell—still ringing, still ignored.

No golden ticket. Charlie never got near the chocolate factory.
If you donated in 2014–15? Look at the graphic.

What’s changed since?
Nothing. Same basic board, same opaque selection process, same results.
At this point, the presidency isn’t leadership—it’s a spectator seat to a bigger bonfire than the Libby Cater Message Board / Rocket Ship of 1984. (You had to be there.)

07/23/2025

"The Southern Association of Colleges and Schools Commission on Colleges has been monitoring the university for the past two years. JCSU (Johnson C. Smith University) gets its accreditation from the association.

"The association reportedly identified issues with the university’s financial picture. It was reportedly determined that the university failed to demonstrate financial responsibility, control of finances, control of sponsored research/external funds, and federal and state responsibilities of the principles of accreditation.

The association expects JCSU to manage its financial resources and operate in a fiscally responsible manner." - CHARLOTTE, N.C. (WBTV)

Johnson C. Smith University & the Risk to Washington College

Last month, Johnson C. Smith University was placed on 12-month probation by its accreditor, SACSCOC, for failures in financial controls, oversight, and fund management. They remain accredited—for now—but are on a clear clock.

Let’s be clear: Washington College is not far behind.

What happened at JCSU?
Weak internal controls over federal and state funds (Title IV, grants, etc.).

Inadequate financial systems, poor documentation, and no corrective oversight.

The accreditor intervened after repeated deficiencies.

Sound familiar?

Washington College Mirrors These Risks
$10M operating loss in FY2024—the worst on record.

Repeated audit flags since 2015, with no endowment policy reform.

Excessive compensation and perks for senior leadership during deficits.

Targeted donor funds misapplied—one case is already with lawyers.

Fundraising efficiency cratered: spending 20x what it brought in.

Governance is still bloated, underqualified, and largely unchecked.

So far, our accreditation remains intact. But if anyone thinks we’re immune from probation, they’re asleep at the wheel. We’re living on reputation—and burning through it fast.

The Fix Isn't Cosmetic
We need a $3M cost correction immediately—real operational discipline.

A smaller, accountable board with turnaround experience.

Transparent reporting and donor trust rebuilt brick by brick.

Endowment draws must be capped, and advancement must be professionalized.

We’re not going to “email blast” our way out of this. JCSU got 12 months. If the Mid-Atlantic equivalent of SACSCOC (MSCHE (Middle States Commission on Higher Education)) reviews us today—we might get less.