LeMoyne-Owen College Claws Back From the Brink
Major financial gifts, debt restructuring adds to momentum.
By Natalie Y. Moore
MEMPHIS, Tenn.
LeMoyne-Owen College can do little in the next month or so but await its fate. Placed on probation and on the verge of losing its accreditation, the historically Black liberal arts college has made required changes to its faculty and finances and laid the foundation for a massive fund-raising campaign — all in an effort to keep its accreditation. The Southern Association of Colleges and Schools visited the college last month and will make a decision on its future in December.
“I’m pretty optimistic,” says board of trustees chairman Robert Lipscomb. “These folks have made a lot of progress in a short time.”
SACS put the college on probation last December for failure to employ competent faculty members and for a pattern of financial instability. LeMoyne-Owen has suffered from declining enrollment, aging facilities, high leadership turnover and accumulating debt. The college has an endowment of $11 million — about the same as its annual operating budget.
Adding to the cash burden is the fact that 98 percent of its students receive some form of financial aid.
According to Lipscomb, the board had been mired in trouble and turmoil. Five presidents have served during the past 20 years, and in August the board hired retired Memphis public schools superintendent Dr. Johnnie B. Watson as interim president.
In its 2005 findings, SACS ruled that the business school did not have enough faculty members with doctorates. Commission standards require that 25 percent of the courses be taught by professors with terminal degrees. Watson says 50 percent of full-time business faculty now have doctorates.
Major financial gifts bestowed this year “came in the nick of time,” Watson says. An anonymous donor gave $1.5 million with a pledge of another million, which was used to conclude last school year with a balanced budget. Also, the United Church of Christ donated $500,000.
The college has reduced the budget by $900,000 through nearly two-dozen layoffs. It has also hired a fund-raising consultant on a commission basis and restructured its debt, including a $2 million loan from 2000 that has since grown to $7 million. Instead of paying principal every year, LeMoyne-Owen will now treat the debt as a long-term loan.
