We regret to report that the Tennessee Baptist Convention’s representatives did not accept Belmont’s final proposal for a continuing relationship. For the past eight months Belmont and the TBC have been engaged in an elaborate mediation process that was suggested by the TBC. This process has included the exchange of thousands of pages of documents, the input of neutral parties to assess the TBC’s claims, and the assistance of one of the very best mediators in Tennessee. Unfortunately, this process has not resulted in a mutually agreeable resolution of the dispute. The TBC has made demands that Belmont University has no legal or moral obligation to meet. Nevertheless, Belmont wished to continue the historic relationship between the university and the convention. Towards that end, Belmont’s last proposal to the TBC included such elements as investing significant sums of money over a 10 to 15 year period to support scholarships for Baptist students to attend Belmont, to help fund operations of the Tennessee Baptist Children’s Home and Harrison-Chilhowee Baptist Academy, as well as funds to support the international missions efforts of Tennessee Baptists. We are disappointed that the TBC representatives rejected our proposal and apparently continue to insist on some cash repayment of funds despite having no legal basis for this claim. Thus, last Friday the judge in this case set a trial date, which is currently scheduled for May 2008. We are prepared for the court to resolve this dispute and have every confidence that we will prevail.
Chairman, Board of Trustees
Belmont University/TBC Background Information
Belmont University’s Board of Trustees is unanimously committed to broadening and deepening the Christian mission of the university. Towards that end the board adopted amendments to the university’s charter and bylaws in November 2005 to diversify its membership.
This action to expand the board to include Christians who are active members of churches affiliated with denominations other than the Tennessee or Southern Baptist Conventions was the culmination of almost ten years of open discussion and dialog between Belmont and the TBC. Belmont sought a Board that reflected more closely the diverse Christian composition of its student body. In addition, Belmont’s astonishing growth and success has been made possible in large part by Christians who were not members of TBC churches, and therefore ineligible for Board membership. Honoring and including on the Board these investors in Belmont University is important as we work together to achieve and secure continued greatness.
In September 2006, the Tennessee Baptist Convention filed a lawsuit against Belmont University. The lawsuit is based on a 1951 document that, according to the TBC, requires Belmont to repay all TBC donations, approximately $58 million dollars, should the TBC lose control of Belmont. Belmont disputes this claim. The 1951 document is a historical artifact the intent of which, to the extent it can be discerned, has been made invalid by subsequent actions of the TBC. The university has no moral or legal obligation to return any gifts to the TBC.
Despite the disagreements between the university and the convention, Belmont pursued efforts to continue its historic relationship with the TBC. Unfortunately, in spite of many months of mediation, these efforts have failed. A trial is set for May 2008.
We invite you to consider the following information in response to questions you may have.
What has happened since the lawsuit was filed?
For the past eight months Belmont and the TBC have been engaged in an elaborate mediation process that was suggested by the TBC. This process has included the exchange of thousands of pages of documents, the input of neutral parties to assess the TBC’s claims, and the assistance of one of the very best mediators in Tennessee. While Belmont has been pleased with this process, the process has not resulted in a mutually agreeable resolution of the dispute.
Our confidence in the merits of our legal position has only grown over the past few months. Despite this fact, the university has continued to try to preserve and strengthen the historic relationship with the Convention. Indeed, Belmont’s last and final proposal to the TBC included: investing significant sums of money over a 10 to 15 year period to support scholarships for Baptist students to attend Belmont; funding to assist with the operations of the Tennessee Baptist Children’s Home and Harrison-Chilhowee Baptist Academy; and funding to support the international missions efforts of Tennessee Baptists.
We are disappointed that the TBC representatives rejected our proposal and apparently continue to insist on some cash repayment of funds despite having no legal basis for this claim. Thus, on August 31, the judge in this case set a trial date, which is currently scheduled for May 2008. We are prepared for the court to resolve this dispute and have every confidence that we will prevail.
Did Belmont’s trustees need the Convention’s permission to amend the university’s charter in November 2005 regarding the method of trustee election?
No. Under state nonprofit law, Belmont’s charter, and the Convention’s own bylaws, the trustees of Belmont University are the final governing authority over Belmont University in all matters. Prior to 1974, the Convention had the right to approve amendments to Belmont’s charter affecting trustee election. In 1974, with the consent of the Convention, Belmont deleted the provision requiring Convention approval of amendments to the charter.
What consequence is the 1951 document to the current and future relationship between the Convention and Belmont?
The 1951 document is a historical artifact the intent of which, to the extent it can be discerned, has been made invalid by subsequent actions of the TBC. Minutes of meetings published by the Convention reflect no application, action or reliance on the 1951 document by the Executive Board or the Convention. The annual gifts given by the Convention to Belmont have been delivered to the university without restriction or condition.
Had the document been in effect, it would have been represented as a contingent asset or contingent liability in the audited financial statements of the Convention and Belmont respectively. There is no reference to it in either organization’s audits. Until this year, Belmont’s audits have always been performed by auditors selected and paid by the Convention.
Does the Tennessee Baptist Convention own Belmont University?
No. The Convention does not now, nor has it ever owned Belmont’s campus. Over the past two decades, the TBC has taken numerous actions which disclaim any right of ownership or control over Belmont University and the funds that the TBC has contributed to it.
For example, in an effort to extricate itself from liability arising out of a personal injury lawsuit filed against Belmont in the late 1980s, the TBC’s chief executive officer submitted a sworn affidavit to a court in Nashville that states unequivocally that the TBC has no ownership interest in Belmont whatsoever and that the only thing the TBC ever expected in return for its gifts was Belmont’s agreement to submit to the Tennessee Baptist Convention an annual report including financial information.
These statements are directly at odds with the position that the Convention now urges the court to take: namely that every dollar it ever contributed to Belmont was subject to repayment if the Convention should ever lose control of Belmont.
In 1997, the Convention voted to amend previous statements contained in its governing documents, including the statement describing its relationship with Belmont–deleting the words “owned and operated” and substituting in their place the word “affiliated.” In 2000, the Convention amended its bylaws to specifically state:
The relationship between the Convention and the affiliated boards and institutions is grounded in mutual trust for the purpose of common ministry. The affiliated institutions are autonomous nonprofit corporations, neither owned nor operated by the Convention. Governance of the institutions is vested in their respective boards of trustees or directors in all matters (emphasis added).
What has Belmont done with the funds donated to it by the Convention?
All funds donated to the university by the Convention over the past 56 years have supported the university’s mission to provide Christian higher education to our students. Over these years 16,483 students have graduated from Belmont and distinguished themselves in their personal and professional lives. The university is proud of these graduates and is grateful for support from Tennessee Baptists who have helped Belmont positively transform so many lives.
Has Belmont severed its relationship with the Convention?
No. At no time has Belmont’s board of trustees entertained a motion to sever the relationship with the Convention. In 2004, in response to a request from a committee of the Executive Board of the Tennessee Baptist Convention, Belmont’s Board of Trustees drafted a new covenant of affiliation between the Convention and the university, which included several important provisions:
• TBC funds contributed to Belmont would be used for scholarships for Baptist students;
• Belmont trustees would elect their own successors; and
• 40% of the board of Belmont would be composed of active members of churches affiliated with other Christian denominations.
This covenant was unanimously approved by Belmont’s board and was approved by the Education Committee of the TBC Executive Board. It was rejected by the TBC Executive Board by a vote of 44 to 29 in September 2005.
On October 7, 2005 at a meeting at the TBC headquarters, a new Resolution on Relationship was jointly drafted by Convention and Belmont leaders. It was unanimously approved by the Education Committee of the Executive Board at its late October meeting, overwhelmingly approved by the full Executive Board in early November, then sent to the Convention messengers for action. Among the elements of this resolution are:
• acknowledgment by the Convention of the intent of Belmont’s trustees to elect their own successors;
• Baptists will comprise at least 60% of the board of trustees with up to 40% of the seats made up of active members of churches affiliated with other Christian denominations;
• acknowledgement by Belmont of the years of support provided to the university by the Convention;
• Belmont will establish an endowed scholarship fund for students from Tennessee Baptist churches at the university;
• establishment of three positions on Belmont’s board for the executive director-treasurer of the Convention, the chair of the Executive Board, and the chair of its Education Committee; and
• implementation of joint educational and mission service programs.
The Tennessee Baptist Convention has never taken action on this jointly approved Resolution on Relationship.
Does Belmont continue to receive funding from the Tennessee Baptist Convention?
No. In October 2005, Convention leaders informed Belmont that if the university proceeded with plans to include Christians who are not Baptist on its board, Belmont would receive no funds from the TBC. By agreement in the Resolution on Relationship, the Convention leaders acknowledged Belmont’s plans to elect other Christians to the board and Belmont acknowledged the Convention leader’s plans not to fund Belmont if this occurred. Though the Convention deferred action on the Resolution on Relationship, the Convention voted to allocate $2,300,000 previously budgeted for Belmont to other TBC-affiliated organizations for the next fiscal year. In 2005, the $2,300,000 allocation from the TBC amounted to less than three percent of Belmont’s annual revenue.