“There’s really no template,” she said.
In many states, the money must be used for a similar purpose as the original intent, setting up a financial feeding frenzy.
New England College and the New England Institute of Art fought an 18-month battle over the $1.7 million endowment of foundering Chester College of New England, said Tom Donovan, director of the charitable trust division of the New Hampshire attorney general’s office.
Even though the defunct school just outside Manchester had designated New England College as the recipient, the art institute argued that it was taking 92 percent of Chester’s students and seven faculty members. Ultimately, New England College maintained 60 percent of the endowment and New England Institute of the Arts walked away with 40 percent, court papers show.
“It wasn’t pretty,” Donovan said.
In New York, the attorney general’s charities bureau must find non-profits with similar mission to receive endowment funds. The agency is currently engaged not just with Dowling College, but the troubled College of New Rochelle.
“We have begun to see some institutions that have difficulty paying their bills,” said Jim Sheehan, who heads the bureau. “In the face of these events, our office has a responsibility.”
Absent Students
Dowling began as extension of Adelphi University, becoming its own entity in 1968. Its jewel was a former Vanderbilt mansion that once housed the Royal Fraternity of Master Metaphysicians, a sect that attempted to raise an "immortal baby" in the late 1930s by never introducing the child to the concept of death or disease.
The school catered to local students and specialized in aviation, business and education training at two Long Island campuses. Enrollment declines decided Dowling’s fate. Its freshman class fell 50 percent between 2011 and 2015, according to Moody’s.