WCC endowment potentially threatened by Chinese buyer

By Lauren Lavelle 

New information from Rider’s chapter of the AAUP revealed Kaiwen Education plans to absorb Westminster Choir College’s (WCC) $20 million endowment regardless of what the faculty union claims are state and federal laws prohibiting it. 

A statement released by the AAUP on Sept. 5 disclosed that, in a recent filing with the Shenzhen Stock Exchange, Kaiwen Education was asked for an asset evaluation report regarding the choir school and made their goal apparent.

“The scope of the acquisition subject includes all tangible assets, intangible assets, real estate and used or available rights of the Westminster Choir College, Westminster Conservatory of Music and Westminster Continuing Education, including but not limited to school premises; teaching equipment and facilities; licenses, agreements and other instruments related to such schools; all the courses; receivables; operational information and records; intellectual property, etc., as well as the donated funds to be transferred to Westminster Choir College and all the newly added donations received before the delivery date,” Kaiwen said in their filing. 

According to Jeffrey Halpern, the AAUP’s chief grievance officer, Kaiwen’s decision to take the endowment goes against a federal tax code stating not-for-profit institutions should not be operated for the benefit of private interests.

“The Kaiwen filing reveals that the endowment of Westminster Choir College, a non-profit corporation with tax deductible status, along with the campus and all College assets would become the property of a for-profit company,” Halpern said in the statement. 

Halpern, in his statement, said the issue warranted government investigation. 

“If this sale is consummated, those assets will now benefit the for-profit corporation and its shareholders and that, we believe, is in clear violation of state and federal law,” he said. 

Larry Livingston, interim president for the Westminster Choir College Acquisition Corporation, insisted the endowment fund would be used appropriately after the sale of WCC. 

“The endowment fund will be used solely to support the vision of sustaining and growing Westminster Choir College’s reputation as a world-class music school, and maintaining it as an artistically pre-eminent, academically rigorous and fiscally sound institution,” he said. “WCC has an approximately $20 million endowment fund, which will stay with the college after the transfer from Rider University. That fund must and will follow and respect the donors’ intent.”

Livingston also refuted the the claim that the endowment would be used for for-profit organizations. 

“The transfer of the endowment fund is subject to regulatory review and approval, and all requirements under that process will be met,” said Livingston. “Given the legal requirements, any suggestion that the WCC endowment fund could or would be spent by any for-profit organization is unfounded.”

Halpern argued that the various donations WCC receives were donated to a not-for-profit institution, not for Kaiwen to take and keep. 

 “All of these donations were made with the express and specific understanding that they were to a not-for-profit institution organized under New Jersey and federal charitable laws. Their transfer to a for profit commercial enterprise violates those regulations and the express wishes of the donors,” Halpern said in the statement. “This sale constitutes a raid on those assets and should be investigated by the appropriate governmental agencies.”