Girard College’s Finances Handcuffed by Rate Swaps: Muni Credit

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Girard College’s Finances Handcuffed by Rate Swaps: Muni Credit

By Romy Varghese
February 04, 2014Girard College, which for 166 years has schooled and housed low-income students in Philadelphia in a walled campus by decree of its namesake founder, is paying a premium in the bond market after Wall Street deals backfired.
Click here to read more.

Girard College’s fiscal ‘solution’ will rob a generation of its future

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“Tears have been shed in the last few weeks, but rising slowly from this sadness is a resolution: We will graduate. The students of Girard College have resolved to fight this decision with whatever tools possible.”

Read the full article, by Brandon Dixon, here.

Sell Girard ? One alum thinks that’s the way to go…


My comments are sure to generate some nasty comments but here goes. I don’t know how many of you remember Ellis College, a school like GC but for girls. Charles Ellis made a fortune by owning trolley cars in Philly before Septa, PRT etc. He was so impressed with GC and SG he decided to do the same except for girls. In the 1960s Ellis school was having the same problems as GC is having today. It cost too much money to run its magnificent campus in Newtown Square and additionally their recruitment base was drying up—-too few orphans.
In the 1970s the private trustee, Provident Bank went to court to get permission to close it, sell the campus and put the money into a Charles EllisTrust fund which needy girls could apply to for scholarship money to attend private high schools or Prep schools, like the type that exist today on the Philadelphia main line. After years of legal manuvering, the Courts finally agreed to close it. The campus was sold to ARCO for $16 million and the Trust Fund was established. I am not certain but I have been advised that the fund today is worth $40-50 million and helping girls every year attend some of the finest prep schools in the Philly area.
If you want to read more about Ellis School, read my book which is located on the Historic Newtown Square web site. Many GC graduates had sisters that attended Ellis school and others married Ellis girls met while attending blind date dances held in each school.
In my opinion this is what should happen to GC. It is ridiculous to spend $40,000 per year on each student and have them receive a questionable education. It makes no sense to spend a fortune to attempt to upgrade an old worn out campus. With the residue of the Estate and the money that would be gotten for the grounds, a Stephen Girard Trust Fund could be established like Ellis’. It could service many more kids, perpetuate SG’s name, have the kids educated in the finest educational facilities, and eliminate the political mess we have today.
I suggested this several years ago but no one wanted to persue it. Think about the benefits. Today only Founder’s Hall is worth saving. There is no significant historical value to the four other out buildings. Some Charter school would pay big money to obtain some of the 1930′s buildings. Maybe the West End could be turned into a retirement home and money maker. Girard’s money would be doing exactly what he wanted it to do, provide a good education for the needy kids of Philadelphia, and the Stephen Girard Trust could last for many years beyond its current life.
Tom DiFilippo

Girard College-Hershey Campus


A response to the’s article on a Girard College-Hershey Campus.  Click here to read article.


Fellow Hummers,      June 14, 2013


The Phila Inquirer article suggests a joint Hershey-Girard campus as a solution to the Hum’s financial problems.  This suggestion is thoughtful, practical and, unless there is a parting of the heavens, nearly impossible.  I’m not trying to grind an ax here, but impossible it would be because of a political system that runs Girard College.  Those Philadelphia officials in power control the Girard Trust and the school’s  operations through a politically appointed Board of City Trusts (BOCT),which in turn appoints a compliant Board of Managers (BOM), who solemnly approve whatever the BOCT wants as a sort of Good Housekeeping seal of approval, much like a wagging tail on a dog.  The BOCT selects and hires administrative people to run the Trust’s day-to-day operations.  Those operations include the selection of managers to oversee rental properties, a choice of which firms trade securities, a preference of which insurers underwrite insurance, and the list goes on.  Each of these provided services includes a profit for those selected and has a quid-pro-quo benefit for the selector, which possibly goes up to the Mayor himself.


As a start, what Girard College really needs is to remove and replace those decision-makers who, over the past five years, have shown egregiously poor judgment in depleting the Trust to its present condition.  Failed management in business demands change, and so it should be for this group of managers whose judgment borders on incompetence. As with most management changes, new people bring fresh energy and new ideas towards solving problems.  The June 3 “woe is me, but it’s not my fault”  press conference showed no recognition by the BOCT that current management was at the root of the Girard College financial mess.  A wiser mind than mine has emphatically stated that recognizing a problem is the first step in a solution.  It appears GC is not yet at that first step.


Now, let’s look the Hershey School.  As the Inquirer article states: Hershey was founded in 1908 through a Foundation Trust established by  Milton Hershey, a successful candy maker.  The Hershey Co. candy operation (market symbol HSY) is a publicly traded company with the Hershey Foundation owning a majority interest.  Some information about the Hershey Co:  yesterday’s closing price was $87.89, market cap of $14 billion, dividends of $273 million and o/s shares of 163 million.


If the Hershey Foundation owns as little as 51% of Hershey Co’s shares, based on public information, annual income from its majority interest would be about $139 million, of which most goes to support and govern the school.   Currently, the school has about 2,000 students who board full time on the Hershey campus in Hershey, PA.  It is interesting to note the Hershey Foundation established a “College-Prep” program several years ago, which proved to be a failure, and has since returned to its original program requiring every student to become proficient in a vocational trade – in addition to a rigorous high school program.


Coming back to why a Hershey-Girard campus is little more than wishful thinking, it must be recognized the Hershey program represents a very large amount of money.  Does anyone think the Hershey Foundation would give up control of even a portion of its wealth to a Philadelphia government festered with political patronage?  Likewise, does anyone imagine the Philadelphia group , through its BOCT, would surrender control of its quid-pro-quo rewards system?  A rock meeting a hard place has never produced a larger rock.




Regards, Jack Donahue, ‘54




The Folly of it all- The Ineptness of the City Fathers

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One doesn’t have to be a meteorologist to comprehend that it is raining and that it might be a good idea to seek shelter indoors. Nor is it necessary to be a civil engineer to understand that when a building collapses at 22 & Market Streets in Philadelphia, killing six innocent people, that incompetent contractors were responsible. So, it appears to us, lay person that we are, that the Board of City Trusts (BOCT) is clueless in determining how to nurture children.

What brought about this epiphany, although we always suspected the same, was Karen Heller’s column in the June 12 Philadelphia Inquirer. She noted “During the last two academic years, the trust spent $617,000 on academic, financial, and architectural consultants.” The culmination of these ruminations was to advise the BOCT to truncate services at Girard College by reducing the grades served to 1 through 8 and the elimination of the residential program.

Hello? Did anyone of these consultants ever raise the question” How will these changes impact on the children?” We doubt it. Because if they did, they would realize that the proposed changes will not only limit the educational opportunities offered the children, but be of grave concern to their welfare.

Anyone who has ever worked at Girard will tell you that Mondays are of limited value to anyone attending Girard. Most of the day is spent undoing the “ghetto” influence that the children experience over the weekend. And let’s be clear, this is a cultural problem not a racial problem. Functional orphans of any background experience the same negative impacts of being part of a dysfunctional family.

So, in their wisdom, the BOCT is suggesting it would be a good idea to send the children home every night. Are they kidding? Don’t they understand that many children will go unfed at home? Or others will be the subject of abuse, in all the forms one can imagine? Or others will find that there’s no one home at all? Think we’re exaggerating? Then ask the few counselors that remain at Girard or the office of Foster Care.

We imagine the folks at Foster Care are more than a little tired of Girard by this point. The discontinuation of the Weekend Program has resulted in a steady flow of children to their offices. Members of Girard’s administration, the Board of Managers, and the BOCT are well aware of this.

What chance do children have when they are neglected? None, in our view. Appears much of the $617,000 spent was wasted.

Thank you Ms. Hellers. Your column and those previously written by Ms. Woodall and Joe DiStefano are invaluable in bringing Girard’s plight to the public’s attention. We can only hope that they are read by the judges of Orphan’s Court as well. The problem must be returned to the BOCT for reconsideration.

We’re also hopeful that one of the journalists will blossom into a Woodward or Bernstein and present a thorough review of the Girard College history and reveal how our City Fathers failed in their fiduciary roles. That should gamer a Pulitzer at least! You have the talent and resources to do that; Girard can’t, the BOCT won’t and the rest of us lack the necessary leverage.

As usual, this is a hummers view.


Proposed Changes to Girard College


A Hummer’s View of the June 3rd Press Conference

Click here Girard to read


Questions from GC alumni


We receive phone calls and emails from Girard alumni frequently. The recent post we put up titled “Stakeholder’s Summary” contains many of the questions we’re asked, and unfortunately, unable to answer.

The Board of City Trusts operates in its own vacuum. They release statements telling everyone how transparent they plan to be, yet continue to stonewall those who ask what they consider to be private matters.  Public agencies ,we feel,  have very little that should be kept from public review.

In this era of instant communications,there is no reason the ongoing business affairs of the BOCT can’t be made public.  Their monthly meetings and annual reports should all be published on a website available to the public.

The public, especially the Girard College and Wills Eye Hospital stakeholders, have every right to know the trusts for the college and hospital are receiving the fiduciary oversight they are legally deserve.

When a corpus such as the Girard Estates  is reduced nearly 50%,  stakeholder’s have a right to know that the managers responsible have been replaced.  What investment counselors have been changed by the Estate?  Have any been changed? Why hasn’t the Estate manager’s heels been held to the fire?

The financial problems facing Girard College have been well publicized. The only people who have paid a price for the financial mismanagement, however,  have  been the employees of the school and, most importantly, the students and prospective students.  The student population is about 400 now, compared to 750 just a few years ago.  That fact alone should shame the BOCT  to take action.  Protecting and educating children, not a political hack’s job is the primary function of  the Board!!

So, my friend, ask your questions. Just don’t expect much of a response.





Stakeholder Summary

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A Hummer’s View – I thought of you when I read this. I, being very much an outsider, I live outside of Boston and have not been very active in the alumni, have a couple of questions. If you know who best to address them to, I will.

How much did the trust invest in derivatives, such as interest swaps? How much are they worth now or how much were they worth when they were sold? Essentially how much did the trust lose?

Who was responsible for those investments? And is that person still managing investments for the trust.

I would like to see a an expanded list of the portfolio “investments” in 2008. 2009. 2010, 2011, and 2012.

How many people are employed by the trust? Part time? Full time? salaries? Job descriptions?

Wishing you a happy and healthy New Year

Hail Stephen Girard

New Scholarship Established for Girardians


I am pleased and honored to announce that a scholarship in my name has been established at the Union League for Girard College graduates.

As administered by the Abraham Lincoln Foundation of the Union League of Philadelphia, the scholarship will consist of a $10,000 annual grant to be given in minimum segments of $2000 to Girard graduates. Those starting their post high school studies, as well as those continuing their studies are eligible for grants.

Preference will be given to those planning a career in the life sciences, such as medicine, social services or nursing and those pursuing educations in architecture or civic development. However, ALL applicants will receive full consideration based on their academic records and civic involvement while students at Girard.

An application for a James McKendrick scholarship will be available from Girard College or the Union League of Philadelphia. The protocol will be similar to that followed by applicants for a Bruce Perazzelli scholarship and we will accept the same application form. A James McKendrick scholarship, however, may be renewed each year if the student maintains a B average and reapplies.

Final arrangements are being made now. When they are concluded, more information will be made available. We anticipate we will be awarding our first grants this Spring.

With all the horrific occurrences of the past few months, we hope this action will be seen as a sign of our continued faith in the children of Girard College; that they will grow to be caring, contributing citizens to the welfare of our great country.

Hail Girard

Invitation to the Community

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Dear Friend of Girard:

As you may be aware, in recent months the leaders of Girard College have made clear that the school faces a series of significant financial and operational challenges. While the Board of City Trusts has reiterated its commitment to keep Girard open and operating at its historic North Philadelphia campus, it is also true that difficult decisions must be made in the coming months to ensure Girard’s long-term future.

The Board has authorized a comprehensive review of the challenges that confront the institution, and it has promised that it will strive to keep the entire Girard family informed about the review process and its recommendations for Girard’s future. As part of this commitment, we will host a public meeting for all Girard stakeholders, to be held on December 13, 2012, from 6:30 to 8 p.m. in the Lower School auditorium on Girard’s west end campus. We anticipate that representatives from the Girard Estate and the Board of City Trusts will attend, together with members of the Girard College Board of Managers and Girard President Clarence D. Armbrister.

Because of your continuing relationship with Girard, we cordially invite you to attend this meeting, which will include an overview of the current situation and a discussion about potential options to ensure Girard’s long-term future.

Please email your RSVP to this invitation at We look forward to having you with us at the meeting on December 13th.


Bernard W. Smalley Sr., Esquire
Board of City Trusts
Chairman, Girard College Committee

Clarence D. Armbrister, President
Girard College

Peter Shoemaker ’60, Chairman
Girard College Board of Managers

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