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Nonprofit Newswire | Lambuth Remains Nonprofit: University Will Get Money from Investors But Keep Ownership of Campus

Rick Cohen
June 8, 2010

May 29, 2010; Source: Jackson Sun | Reports from Detroit and Boston concern nonprofit hospitals being sold to for-profit entities, but Lambuth University in Jackson, Mississippi is one of the first institutions of higher education whose nonprofit status was close to being traded in for money from for-profit investors. A week ago, the financially strapped Lambuth had all but announced that it had been sold to for-profits. But now, in a deal with a bunch of unnamed investors, Lambuth will remain a nonprofit—but the investors will bail the university out of its hole.

As of May 15th, Lambuth wasn’t able to pay its staff, but the investors will pay enough of the bills to keep the school open. Who are these investors and what are they getting for their investment in this bankrupt institution? The head of the Southern Association of Colleges and Schools (SACS) put it tersely: “If you are paying the bills, you may own the place.”

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Good news, however. The investors may still be completely secret, but they’ve pledged to help Lambuth continue to field its football and basketball teams. So, with a secret deal with unnamed investors bankrolling the nonprofit university, is Lambuth still a nonprofit? Shouldn’t the SACS, shouldn’t the nonprofit sector in the region wonder whether their sector-buddy is now in or out of the fold?—Rick Cohen

About the author
Rick Cohen

Rick joined NPQ in 2006, after almost eight years as the executive director of the National Committee for Responsive Philanthropy (NCRP). Before that he played various roles as a community worker and advisor to others doing community work. He also worked in government. Cohen pursued investigative and analytical articles, advocated for increased philanthropic giving and access for disenfranchised constituencies, and promoted increased philanthropic and nonprofit accountability.

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