(MSN) - Alexis Shandor was devastated when Philadelphia’s University of the Arts unexpectedly closed at the end of her freshman year, a casualty of the economic forces that are hammering America’s small colleges.
“It completely crushed me,” she said. “Everything was up in the air.”
Then she accepted a lifeline from nearby Temple University, which offered to let her study vocal performance and education there instead.
Temple and other colleges wound up with a potentially significant reward for recruiting her and the hundreds of others stranded by the 154-year-old school: It put them in line for a slice of the university’s $65 million endowment worth roughly $81,000 for every student they took on.
The scramble for that cash has set off an unusual court fight that’s been playing out in Pennsylvania for over a year and pitted more than a dozen schools against the family of Dorrance “Dodo” Hamilton, the late Campbell’s Soup heiress who provided more than half of the UArts endowment. Her heirs are now seeking to claw it back.
The case offers a glimpse into the types of conflicts that are likely to grow increasingly common as shuttered schools leave behind endowments. Dozens of small colleges have already closed in recent years due to rising expenses and falling enrollment, with more expected as a decline in birth rates thins the ranks of incoming freshmen. Over 400 private colleges in the US will likely fold or merge with another institution in the next decade, according to the consulting firm Huron, potentially putting about $23 billion of endowment funds in limbo.
“This case is somewhat the canary in the coal mine,” said Clay Grayson, a South Carolina attorney who frequently works with university endowments. “More and more of these fights are happening all the time. But a lot of these issues have been untested around the country.”
Even broke colleges can leave behind sizeable endowments because they typically can’t be tapped for day-to-day expenses like payrolls. Usually, the money comes with strings attached to guarantee that it’s used only as the donor intended. Those intentions must be honored after a college shuts down.
Dodo Hamilton, whose grandfather invented the condensing process for soup and was the president of the Campbell Soup Co. during the early 20th century, was a prominent local philanthropist. A 2008 profile called her the “last great lady” of Philadelphia. She donated to city institutions like Thomas Jefferson University and the Pennsylvania Academy of the Fine Arts.
After UArts collapsed in 2024, the school’s lawyers said the other colleges where the students landed should each get a share of the endowment. Temple stood to gain the most because it took in nearly half of UArts’ students, according to court records. Philadelphia’s Drexel University, the School of Visual Arts in New York City and a dozen others were in line for a smaller share, based on how many they enrolled.
But Hamilton’s children asked a judge to block the plan, saying it was at odds with her intentions. They took particular issue with the money going to state-funded schools like Temple, saying Hamilton supported UArts because it was a private, unique institution focused exclusively on visual and performing arts.
Instead, they want the $37 million she donated be returned to the Hamilton Family Charitable Trust. In court documents, the family’s lawyers said sending the money elsewhere would “do violence to and ignore Mrs. Hamilton’s charitable intention and her donative intent.” Representatives for the Hamilton Family Charitable Trust declined a request for comment.
The trust is facing an “uphill fight,” said Tom Donovan, who oversaw the endowment distribution process for closed colleges a handful of times when he worked in the New Hampshire Attorney General office.
“The law tends to be not favorable to those donors if they think things are going sideways and they want their money back,” he said.
But UArts representatives changed course after the trust’s opposition. It’s now suggesting that the court individually review the more than 200 restricted funds within the endowment and distribute the cash to the school that’s the best match. Some of the funds are earmarked for broad purposes, like scholarships for music-composition majors. Others are very specific, like one whose purpose is to “revive, carry on and develop the pottery of the Pennsylvania Germans.”
The court case is pitting some of the schools against each other as they make a case for the cash. School of Visual Arts in New York City argues that it earned a piece by accepting 27 students and honoring credits, waiving fees and offering comparable financial aid packages.
Moore College of Art & Design — a small, private, Philadelphia-based art school — said it’s the one that most resembles UArts, making it a natural home for the orphaned endowment funds. A group of schools including Temple and Drexel said Moore’s claim is “premature, incomplete and incorrect” since most students chose not to go to Moore, which only accepts female and nonbinary students.
Nearly half of the displaced UArts students landed at Temple, which worked closely with students and even accelerated the launch of a new program to ensure a seamless transition, according to Susan Cahan, dean of the arts and architecture college.
“It was never going to be an enjoyable process, but we knew that we needed to support them to the best of our ability,” she said in an interview.
But it was still challenging for Shandor when she transferred from UArts’ small, arts-focused community to Temple’s campus with 30,000 students and courses on business, engineering and podiatric medicine. She eventually changed her major to focus exclusively on education because Temple’s vocal-performance program wasn’t the same as what she’d been doing at UArts.
“I was really losing my love for my art,” she said. “Music is really important to me and it had been my entire life. So I decided that I would rather just teach, instead of forcing my love for music.”
Messiah King, who had just finished sophomore year and was studying graphic design when UArts closed, has been happier at the School of Visual Arts in Manhattan. King said they were only able to afford it because the school matched their UArts financial package and offered free housing.
“The money could be used for so many other people that want to go to school here,” King said. “If the charity does get the money, they need to have a plan of how they’re going to work on implementing the arts back into Philadelphia after it’s been ripped from its roots.”
By Elizabeth Rembert
With assistance from Demetrios Pogkas and Kate Rabinowitz
March 9, 2026
