Like many government agencies, businesses and other schools, Girard College is still reeling from the effects of a prolonged national recession that started in September 2007.
A look at Girard College’s history shows that the landmark school in North Philadelphia always expanded or scaled back school operations in response to the income derived from a diversified portfolio of stocks and bonds, real estate property and coal mines.
School operations were supported by revenue from real estate holdings during its first 20 years. During the boom years for anthracite coal, the school relied on cash royalties from 136 million tons of anthracite coal mined from the 1860s through the 1950s. It was a lucrative market during the Industrial Revolution, spurring a major expansion at Girard College that brought a corresponding increase in enrollment.
When the demand for coal as an energy source fell off, revenue from the coal mines declined as well. Girard College scaled back spending and enrollment gradually decreased from 1,700 in the 1930s, to 1,300 in the late 1940s. By 1960, enrollment stood at 800. After dwindling to 285 students, enrollment rebounded in the ’80s, swelling to 753 students by 2007.
That was the year that the country fell into recession, starting in the fall. In a span of 21 months, the fund subsidizing school operations plummeted in value by 37 percent, dropping from a peak of $333 to $210 million, due to economic pressures from all sides.
Major tenants, including the Commonwealth of Pennsylvania and Synnestvedt & Lechner, abandoned their leases at Girard Square, representing a $2.1 million loss, and partly because tough times gave leverage to tenants with deep pockets. For example, the city of Philadelphia negotiated lower rent, reducing its leasing costs by $1.1 million. At the same time, borrowing costs went up when banks tightened standards for credit worthiness.
The Board of Directors of City Trust is now planning to close the high school and stop offering room and board temporarily, because the fund subsidizing school operations is projected to run dry in 25 years without an adjustment in financial strategy.
The current enrollment stands at roughly 400 students: 150 Upper School students in grades 7-12, and 250 in Lower School for grades 1-6. The annual costs per student is roughly $40,000.
The high school could be shuttered starting with the 2014-15 academic year but only if the plan is approved by a judge in the Court of Common Pleas’ Orphan Division, so named for “one lacking protection, not the common association of a child deprived by death of his parents.”
This would include minors, incapacitated persons, estates of the deceased, nonprofit corporations and trusts. The court rules on “personal and property rights of all persons and entities that may not be otherwise capable of handling their own affairs,” making certain that the “best interest of the persons are not compromised,” according to the website for The Philadelphia Courts, First Judicial District.
Girard College alumni are set to protest the planned closure at a rally at the school gate on Friday, amid speculation by some that funds have been mishandled. The closure would mean layoffs for approximately 100 full-time employees. Critics raised questions about the need to implement changes in one year when jobs and students’ education was at stake. As part of the transition, Girard College officials pledged to help in finding new schools for high school students who would be displaced “with as little additional disruption as possible.”
Girard College say the dire financial situation is made worse by costly maintenance repairs for aging buildings, some dating back to 1847. Repair estimates for 15 buildings top $111 million and that includes four original residence halls (Merchant, Mariner, Bordeaux and Allen halls).
Girard College officials considered keeping the high school but dispensing with grades 1-8. It would cost an estimated $8.7 million to keep the high school open. Operating as a school for grades 1-8 would cost half as much, or $4.3 million. An initial investment is $1 million less under the proposal that calls for closing the high school.
Girard College officials also like the idea of educating children in their formative years, through their first eight years of schooling. By comparison, they would only have four years to make a difference for high school students.
The stewards of the college say they are acting to preserve founder Stephen Girard vision of keeping the school up and running “in perpetuity.” According to its website, Girard College is a college-preparatory school that develops students who are well-rounded intellectually, socially and emotionally, instilling values such as responsibility, integrity and compassion.
Academic standards will be raised and revamped so that academic training is more rigorous, more personalized, and deepens connections between school, family, community, education and career goals.
Girard was a French national who brought a sharp business acumen when he arrived in Philadelphia in 1776, at age 26. He made his wealth as a successful banker, shipper and merchant. At his death in 1831, he was the Bill Gates of his era, the wealthiest man in the United States. He helped finance the War of 1812 for the U.S. government and built hospitals as yellow fever swept through Philadelphia.
Girard College was founded with a bequeath from his estate, valued at $7 million, and originally set up as a “college for boys” at a time when other major institutions were being started: Eastern State Penitentiary, Pennsylvania Hospital, Pennsylvania Asylum and Franklin Institute.
Girard College took in boys from families with limited means, offering academic courses as well as training and apprenticeships in the mechanical trades. Girard became known as “the father of philanthropy,” according to the school’s website.
The sprawling, 43-acre campus of stately, 19th- and 20th-century buildings sits beyond an off-white wall that runs along Girard Street, with a secured, iron-gated entrance at the end of Corinthian Street. More than 20,000 have been educated within its iconic walls. Alumni include William J. Tillinghast, director of International Culinary School at the Art Institute of Philadelphia; and John Gearheart, who heads the Institute for Regenerative Medicine at University of Pennsylvania.
The first Black male students were admitted at the close of the civil rights movement. Women were allowed in in the 1980s, after Title IX felled another barrier to equality.
“The great triumph of Girard College today has been its adaption to changes in American society while maintaining Stephen Girard’s original mission to educate children to become productive citizens,” according to the school’s website.