Elite New York High School Grads Ask, Where'd the $4 Million Go?

(Bloomberg) -- For generations, Stuyvesant High School has been the jewel of New York City's public school system. Scores on a single exam of math and English determine admission. And the prize for making the cut to the tuition-free academy on the Hudson River is often a ticket to the Ivy League.

Yet alumni have struggled to raise an endowment like those at other top U.S. schools. The closest was an effort begun in 1999, called Campaign for Stuyvesant, that over the years managed to raise about $4.5 million, on its way to a $12 million goal.

It never made it. Today, all that's left is about $330,000. Alumni, including members of a group called Concerned Stuyvesant Alumni, want to know where it went.

‘Pot Dwindled'

Tax records have provided the best road map. On May 24, an alumnus participant in the CSA's Facebook group, Neal Wilson, posted a link to the Campaign for Stuyvesant's filings on charitiesnyc.com, pointing out how “the pot dwindled” over the past decade.

“CFS continued to have expenses and salaries, reducing the assets each year when that money could have either gone to the kids” or to the alumni association, Wilson wrote. What followed was a string of 50, mostly angry, replies from fellow alumni.

The Campaign for Stuyvesant's executive director, Neal Hurwitz, defended the expenses -- including his $60,000-a-year salary, rent for his home office, and travel to fundraising events -- as needed for building the fund. The endowment also got hit in the 2008 financial crisis.

“We're the good guys, in my opinion,” Hurwitz said in a phone interview.

Adding Fuel

Among some graduates, the posting of the Campaign for Stuyvesant's tax records added fuel to an ongoing feud over how best to raise money.

The endowment didn't flourish, in part, because it was one of three fundraising groups: another, newer endowment, called Friends of Stuyvesant, and the Stuyvesant High School Alumni Association, which has offices in the school and helps organize annual reunions. The school has produced four Nobel Prize winners and graduates include former U.S. Attorney General Eric Holder, actress Lucy Liu and writer Gary Shteyngart.

Principal Eric Contreras said the competing groups and continued disputes are an extension of the independent spirit he sees among Stuyvesant students. The downside is that “It creates liabilities when it's time to build an endowment,” he said in an interview. 

The three groups are putting the final touches on a combination of assets under the alumni association's umbrella. As part of that process, the Campaign for Stuyvesant filed with the New York attorney general's office a couple weeks ago to dissolve itself, and will give its money to the alumni association, Hurwitz said.

Alumni Effort

At the same time, some supporters of the Concerned Stuyvesant Alumni effort have called for potential donors to divert their money from the alumni association to groups such as the parents' association. The grievances they've cited include a need for more transparency, including over the merger of the three-headed alumni effort.

The school's student newspaper, The Spectator, detailed the dispute in a May 27 story that said tensions among alumni arose in 2013 and 2014 when the merger effort began.

In response, the alumni association's president, Soo Kim, the founding partner of New York-based hedge fund Standard General, says the combination has been a success and the remaining funds from the Campaign for Stuyvesant will be absorbed by his group when the old endowment completes its dissolution process.

With a newly elected board that includes other figures from finance -- including Saba Capital Management founder Boaz Weinstein -- Kim, a 1993 graduate, sees the mission going forward as akin to fixing a troubled company.

At best, they'll be starting with less than $3 million for scholarships and other efforts when all the money is combined, Kim says.

“It's a turnaround,” he says. And in finance, that means opportunity, too.

To contact the reporter on this story: Vernon Silver in Rome at vtsilver@bloomberg.net.

To contact the editors responsible for this story: Flynn McRoberts at fmcroberts1@bloomberg.net, Mary Romano