## Facts

- Fenn College, a nonprofit corporation operating a private college in Cleveland, faced financial and operational strain amid rising higher-education costs and the creation of a new public university in the same community.
- Ohio created Cleveland State University (CSU) as a state university in December 1964, with statutory authority to accept transferred property.
- Fenn and CSU’s trustees negotiated an “Agreement and Plan of Transition” under which Fenn would transfer most campus land, buildings, equipment, and related assets to the State/CSU; Fenn’s personnel and facilities would form a nucleus for CSU.
- CSU agreed to pay Fenn $260,000 and to establish a “Fenn College of Engineering” within CSU.
- Fenn proposed amending its corporate purposes so it would cease operating a college and continue as an educational/charitable foundation.
- Because Fenn had many prior donors, Fenn sued for declaratory judgment and joined representative donors as defendants in a class framework, with notice including publication; the Ohio Attorney General participated as the public representative for charitable interests.
- Donors did not object to the proposed plan.

## Issues

1. Whether a court of common pleas had inherent and statutory jurisdiction to approve a nonprofit college’s proposed change of purposes and major asset disposition by gift to a state university.
2. Whether former donors could be treated as a class, joined through representative defendants, and notified by publication in litigation approving a major change in charitable purposes and property disposition.
3. Whether Fenn’s trustees (after required notice to members) had authority to implement the transition plan and transfer most facilities to CSU.
4. Whether, after discontinuing operation as a college, the court could permit a shift from operating a college to operating a charitable foundation under the doctrine of deviation due to changed circumstances.

## Decision

- The court granted declaratory relief approving the Agreement and Plan of Transition.
- The court held it had inherent equitable and statutory jurisdiction to review and approve the proposed changes and transfers.
- The court held former donors were a proper class; representative defendants and service by publication were permissible given impracticability of joinder.
- The court held Fenn’s trustees could implement the transfer plan after complying with statutory notice requirements, and CSU could accept the transfer under its enabling statutes.
- The court permitted Fenn to amend its corporate purposes to operate as a charitable foundation under deviation, finding the creation of CSU would substantially impair Fenn’s original college-operating purpose if continued unchanged.

## Legal Principles

- Courts of common pleas may, through equitable powers over charitable trusts and applicable declaratory-judgment and trust-administration statutes, approve substantial changes in a charitable educational corporation’s purposes and disposition of its property.
- Former donors to a charitable educational institution may be joined as a class in litigation concerning disposition of substantial charitable assets and changes in purpose; representative defendants and notice by publication may satisfy due process where individual joinder is impracticable.
- A nonprofit college’s trustees may lawfully complete a plan to transfer most facilities to a state university when statutory notice and internal approval requirements are met and the recipient is statutorily empowered to accept the transfer.
- Under the doctrine of deviation, a court may authorize modification of the means of carrying out a charitable purpose when changed circumstances would substantially impair accomplishment of the original purpose, so long as the revised plan remains consistent with the charitable intent.

## Conclusion

The court approved Fenn’s transfer of most assets to CSU and authorized Fenn’s conversion from operating a private college to operating a charitable foundation, relying on equitable jurisdiction over charitable assets, valid class treatment of donors with publication notice, and deviation based on materially changed educational circumstances.


Fenn Coll. v. Nance, 210 N.E.2d 418 (Ohio Ct. Com. Pl. 1965)