Sunday, December 28, 2014

Nonprofit Mergers and Acquisitions

New Jersey hospital closings have exposed a mergers and acquisitions strategy, popularized by rogue nonprofits, who remove social services and endowments accumulated over decades, while robbing all levels of government of tax revenue, as they enrich themselves personally.

Muhlenberg was started 131 years ago after a train accident, beginning a tradition of bequests and endowments long before government was expected to provide for charity care. Residents upheld a long tradition of leaving bequests and endowments they expected to compensate for charity care. The Muhlenberg Independents are researchers that believe the salvation of Muhlenberg lies in the protection of those assets that include an astonishing amount of real estate outside of Plainfield.  Muhlenberg exposes a fatal flaw in the protection given to endowments, after the benefactor’s death.

Wall Street tactics of mergers and acquisitions have spread and redefined the practices of a new generation of profiteers. Utilizing the barely scrutinized and rarely regulated structures of nonprofit corporations, the plundering of old richly endowed facilities, like Muhlenberg Hospital, is turning into a tragic loss of history and multiple generations of philanthropy. We must honor the sacrifice of people who made provisions to care for the poor and disenfranchised or return those assets to the appropriate heirs.

The Muhlenberg Independents are in possession of a small mountain of financial documents that prove the violation of donor intent and the failure of the State of New Jersey to protect the substantial donated assets of old hospitals that the state is closing. 

Muhlenberg remains an asset even in its current state. It does not matter if the hospital has been gutted and the cost of keeping such an old building functional is high. The only thing that cannot be replaced is the land.  The community deserves a fair price and an uncompromised sale with Solaris relinquishing all control over the assets of Muhlenberg.

Solaris/JFK Healthcare Systems was voted control of Muhlenberg’s substantial assets without payment or promises to continue to serve the community. Is their refusal to participate in a good faith effort to find a buyer indicative of their alternative agenda or the legal lack of standing to sell a facility that they control, but do not own?  Did Solaris/JFK Healthcare Systems even have the legal standing to apply for a certificate of need to close Muhlenberg?

Deborah Dowe


Thursday, December 11, 2014

December 15, 2010

Position Paper on Uniform Prudent Management of Institutional Funds Act

New legislation is dismantling century old trusts and endowments that were supposed to
continue in perpetuity. This is the raiding and plundering of historic endowments to
compensate for property mortgages, pet projects, failed investments and expanded
personal compensation packages, which are not for the benefit of the Public and
certainly not the donors' intent. Unfortunately, new legislation is dismantling century old
trusts and endowments that were supposed to continue in perpetuity.

In 2006, The Uniform Law Commission (ULC) released Bush era guidelines
deregulating a substantial portion of nonprofit funds. More than 40 States have adopted
versions of these guidelines with very little debate and even less publicity. On June 10,
2009, NJ Governor Jon Corzine signed into law the Uniform Prudent Management of
Institutional Funds Act. This law creates troubling changes in the way that charitable
trusts and endowments are managed and regulated.

The use of the term "prudent" in dealing with "small funds" has resulted in an expansion
of the affected funds from the ULC suggested amount of $25,000 to a high of $250,000
in New Jersey and in a number of other States. These funds become "old" after the
suggested 20 years in NJ, and at least one State has shortened the time to 10 years.
Language on retroactivity is strategically vague and neglects public notification and

Liquidating the principal in countless smaller endowments that support charitable work
in good times and bad will do irreparable harm to the public good that will eventually
achieve infamy as a crime against the living as well as the dead.

Most significant is the transfer of oversight from the jurisdiction of the States' Courts to a
political appointee - the State Attorney General - making nonprofits more vulnerable to
pay-to-play and unregulated asset transfers. Ethical assumptions about prudence,
motives, and human nature have subsequently been changed with lessons learned by
the banking crisis, predatory lending practices, bonuses amidst bailouts and the failure
of the SEC to regulate the exploitation of foundations and nonprofts by Madoff.

The dismantling of New Jersey hospitals, specifically Muhlenberg Regional Medical
Center, Plainfield, NJ, was facilitated of and by a corporate, nonprofit parent company
with related for-profit holdings and overlapping interests. The transfer of over a century's
accumulation of assets: endowments, gifts, real estate, facilities, and equipment was
done under the approval of the NJ State Government, and the NJ Attorney General's
Office. The cy pres doctrine was essentially ignored.

Citizens have raised the endowment issue at State hearings, in letters to the editor, and
various other venues, but all of this has fallen on deaf ears. The citizens are paying in
tax dollars the same State government employees who are not protecting their interests.

Unless the Muhlenberg Regional Medical Center private citizen's can muster enough
money to initiate a court action, all of the historic endowments will be lost forever, over a
century of charity and sacrifice will been squandered and lost to future generations. In
this case, the NJ UPMIFA of 2009 had not been passed, yet the raiding and plundering
of endowments happened anyway.

Thursday, September 11, 2014

Grade inflation equals consumer fraud

WEDNESDAY, 31 MARCH 2010 20:38

LETTER TO THE EDITOR                                                                       NEWJERSEYNEWSROOM.COM

Education reform can begin with a policy that prohibits the granting of honor roll grades to students who are not doing work that is on grade level. Grades are deceptive and few parents know what children are expected to know at various stages of their development. Accepted practices of grade inflation need to be banned as a destructive form of consumer fraud.

Honor rolls can create a deceptive sense of satisfaction for everyone involved. It would produce a higher level of advocacy and effort from parents and students if they were aware that they were achieving excellence in work below the core content standards for their grade.

In every school system, there are students who will do whatever it takes to master all of the work required of them. It is not fair for them to never be presented the full scope of academic instruction that is given to other students that they will have to compete with in college. Valedictorians from one school district are placed at a disadvantage next to "C" students from another.

Many college freshmen are surprised and discouraged to learn that they have to take loans and acquire debt for non-credit courses. This often includes the additional cost of room and board for instruction they should have obtained while living at home attending public schools where they excelled. Without proper support, many of these gifted students are lost to higher education, forever.

All positive change does not require money. A public policy that requires "truth in grading" can go a long way towards preventing schools from languishing, unchallenged in entrenched failure.



Comments (10)

10 Thursday, 08 April 2010 08:04

Renata Hernandez

What a compelling piece and the commentary equally so! As a product of PPS and an honor roll student since the 6th grade I lived the angst of going to college only to be faced with remediated NON-DEGREE contributing mandatory coursework in English and MATH! It was depressing but by grace I pressed forward and continued on until I achieved my MBA. TODAY I continue to advocate for the PARENTS and Children of this district. As the former President of Parents Empowering Parents (PEP) and now as a BOE Candidate -- It is my DUTY as a citizen and as a human being to change the course of our current educational system!

9 Tuesday, 06 April 2010 22:20

N. Webb

Having a child that came out of a public school and is now struggling to get a passing grade in math in a private school this hits home. Deborah is on point. If my daughter could not do the required work a poor grade would have alerted us sooner. It’s much easier to get the extra help the children need in the lower grades than later when it may be too late.

8 Tuesday, 06 April 2010 14:29

Rev. Alphonso and Carol Washington

Some years ago, my brother retired from teaching in the MD school system because they had begun the process of 'dumbing down' the Math department of which he was head. It truly upset him because the students would be the ones to suffer in the end. You see, ironically, grade inflation is ultimately a disservice to students. In the real world, where people have to work hard, pay taxes and learn that life has a habit of throwing nasty surprises at you, an ability to think critically is worth a lot more than a piece of paper showing you got lots of As and Bs in the Leaving Cert. Without the capacity for independent thought, today’s students will flounder in the future and this will only be exacerbated by the false sense of entitlement they have from being handed a raft of ill-deserved high grades.

It will be sorely disappointing for them to discover that, as adults, things won’t always be handed to them on a plate. They will fail sometimes. Life won’t always go their way and no one will ever ask them how they got on in the Leaving Cert.

Quoting from an article I read a couple years ago..."Grade inflation has wider implications too. Without high standards in education, how will the bottle-fed brats of the Bebo generation develop intellectually to the point where they might contribute to technological advancement, make scientific breakthroughs or add to the canon of Irish literature?

More prosaically, can we trust those with diluted qualifications to do their jobs properly? If a patient dies because of a doctor’s misdiagnosis or a bridge falls down because an engineer made a basic mistake with a set-square, will we be able to trace those disasters back to the awarding of inflated grades when they were leaving school?

These are questions I was hoping to answer with the aid of a statistical model of my own devising, but the strange thing is, my mathematical abilities just don’t seem to be up to it. And I thought I was an A-grade student."

Deborah Dowe, you are spot on!

7 Tuesday, 06 April 2010 12:51

Norman Dowe

Most of the attention given to improving academic performance has focused on the schools. Teachers and administrators are increasingly being held accountable for student performance. However, they are only one third of the educational triumvirate that also includes the parents and students. Grade inflation disempowers the parents. This is especially true for those who are at the lower end of the educational ladder themselves.

Poorly educated parents, who do not know what their child should be learning, are disempowered as advocates for their children by grade inflation. They are lulled into a false belief that their children are doing well and on the route to a better future than they have had. After all their children are doing so well academically. They don't push their children to do better. They don't challenge the teachers to do better. They don't challenge the administration to do better. They believe that everything is OK when in truth it is not. Their interests and the interests of their children are not served at all. Only the interests of the under performing educators and school systems are served. These people don't have to weather the cacophony of complaints that face bad educators in districts where parents know what should be taught.

If you want to invest in a business the SEC makes public companies tell the truth in their form 10-k's and other filings. If you want to buy a franchise the Federal Trade Commission makes franchisers tell the truth in their franchise disclosure documents. Don't parents deserve the same kind of protection from the educational establishment? Should they not be required to tell the truth about how students are actually performing?

6 Tuesday, 06 April 2010 10:10

G Daniels

Deborah, I believe your comment is very accurate and necessary.

There are none more formidable to personal and societal destruction than those who care more for your comfort than your character and knowledge.

5 Tuesday, 06 April 2010 08:40

Hope T.

Finally...this is spot on. I believe there is not only grade inflation, but grade manipulation. And it only hurts the students. Imagine how they feel when they get to college and out in the real world and find that they are unable to compete. It's a vicious and criminal cycle destroying society's future!

4 Monday, 05 April 2010 21:58

Nini J.

Deborah has a very strong and valid point.. a vile dis-service to our "future".. Our children in "our" classrooms.. taking it a step futher can you imagine the devastaion that must cause to the students personally; once they realize they cannot compete properly in the next phase of their lives?
Wow.. Thanks for bringing this to our attention..

3 Monday, 05 April 2010 20:28

Michelle Cox

Agreed, there should be more truth in grading. School districts should understand that an ill prepared high school student might be more likely to be a college drop out. Spending money on remedial classes is damaging to the wallet and a students self esteem.

2 Monday, 05 April 2010 17:42

Roger Stryeski

I'm always amazed at the Honor Rolls that newspapers put out. They have the leading student from each, usually public schools. Then, I find the disparity between the GPA and their SAT score. I have seen 4.0's with under 1000 for the SAT.

1 Sunday, 04 April 2010 11:55

A. Robert "Bob" Johnson

Deborah is "right on the money". Having taught at Hubbard JHS with her dad and retired from teaching math at Kean U. in 2002, I have seen "it all". It's not just the Plainfields that submit to grade inflation and subject their graduates to retaking essential courses, at their own expense. I Found many students from the "priviliged" districts had failed their placement tests in college algebra. For several years I taught what turned out to be a remedial course for area college students from Princeton, Brown, Wagner, Rutgers, etc., who had great grades from Westfield,Cranford, etc. Why? Grade inflation and teaching for the test are the likely answers.
The nation must do better for our children and grandchildren.
Thank you Debbie!
Bob Johnson