University of Virginia Library

VI. Power of Rector and Visitors to Authorize an Expenditure
of Funds for Gay Student Union

A. The Rector and Visitors as a Public Corporation

The Rector and Visitors is described in Virginia Code § 23-69 as a "corporation *** at all times subject to the control of the General Assembly". While this section also grants it powers conferred upon private corporations, except when these powers are restricted to private corporations by the terms of the corporation code, the Rector and Visitors is treated by the Court as a "public corporation" and a "state institution or agency". Its public and governmental administrative character is unquestioned. Phillips v. Rector and Visitors, 97 Va. 472 (1899) (described as "public corporation" and "public institution governed and controlled by the state"); Batcheller v. Commonwealth, 176 Va. 109 (1940) ("department of government"); Holland v. Rector and Visitors (Circuit Court, Albemarle County, 1973, unreported) ("state agency"). The public corporate character of the Rector and Visitors has ramifications in its disbursement of funds not equally prominent in similar disbursements by a private university.

B. Relationship of Disbursement of Funds to Educational Purpose

The purposes of university education are diverse. It is difficult to define with precision limits on the scope of educational activity since these limits change through time and vary with the condition of the society in which educational objectives are pursued. But certainly a primary objective of education at the University of Virginia is to assist those who study here to achieve the highest development of which they are capable, mentally, morally and physically. Choice in pursuits is encouraged. The great variety of organizations formed by students and entitled to use University facilities to accomplish their objectives evidences the atmosphere of toleration prevailing here.

But the Rector and Visitors, as a public corporation, unlike the governing boards of private institutions, must carefully relate its exercises of power to the educational purposes for which the University is established. A general analogy can be made between the educational public corporation and the municipal public corporation with respect to the relationship between corporate purposes and powers. E.g., State ex rel. Curators of University of Missouri v. McReynolds, 193 S.W.2d 611 (Mo. 1946).

The courts often state that a municipality has powers granted in express words, powers necessarily or fairly implied in or incident to the powers expressly granted and powers not simply convenient but indispensable to the municipality's declared objects or purposes. While the Virginia Court has stated that the Rector and Visitors has the implied power to do whatever is "reasonably necessary" to effectuate powers expressly granted, it has also sustained the Rector and Visitors in its operation of an airport on the ground that the enterprise was necessary to and incidental to the full and complete instruction in the course in aeronautics which it has established. The Court thus appears prepared to test powers exercised by the Rector and Visitors in terms of accomplishment of the educational objectives of the University.

The Rector and Visitors has express power by statute only to require a tuition fee. Clearly, fees for the payment of professors and necessary University services and maintenance could be assessed without express authority if the General Assembly fails to appropriate sufficient funds to defray these expenses. But as the Rector and Visitors move toward the imposition of other fees, the importance increases of relating these to a valid educational object. Health and library fees are easily sustained. But beginning in 1929 with the athletic fee, and in 1934 with a publications fee to support "College Topics", the Rector and Visitors commenced to finance student activities which might be challenged on the basis of irrelevance to educational purposes. An athletic program can be sustained on the grounds of physical conditioning and health of the student and as a form of catharsis for the aggressions developed by students in a system of mass education. Publications can be sustained as training for the various writers and editors and as a communications vehicle for University news. Nevertheless, as a few student activities expand to over a hundred, all clamoring for financial support, the relationship of the expenditures to the educational objectives of the University must be scrutinized closely.

This Committee believes a number of questions should be asked about this relationship. Assuming the objectives of the organization are not of an athletic nature, these being supported by the same reasoning supporting a general athletic program, does the organization promote an environment in which conflicting viewpoints can be exchanged and analyzed? The organization not to be subsidized is the organization designed simply to promote a particular point of view which is deemed "noncontroversial"--in the sense that the promoters are unwilling to countenance counterargument and hostile analysis. The spokesmen for such an organization are clearly entitled to their freedom of speech and assembly within the University and the use of University facilities. But their support by a disbursement of fees, the assessment of which rests upon a power of the Rector and Visitors implied from its educational purposes is another matter. In this connection, the Committee should point out the increasing challenge to accomplishment of the educational purpose of the Rector and Visitors by the tendency by many to "politicize" University activities. The development and flow of ideas, which is the ultimate object of subsidy of voluntary student activities, can be effectively suppressed if these activities become harnessed to narrow political and personal objectives. The Rector and Visitors may well harden the University's educational arteries if it subsidizes student activities indiscriminately.

When cases concerning the relationship of an expenditure to educational purposes are examined, it will be seen that only very close and obvious relationships thus far have been presented to the courts for consideration. The following expenditures of funds derived from student fees have been sustained: For the construction of student unions (Rheam v. Board of Regents, 161 Okl. 268, 18 P.2d 535 (1933); State ex rel. Veeder v. State Board of Education, 97 Mont. 121, 33 P.2d 516 (1934)); for improvement of a stadium (Moye v. Board of Trustees of University of S.C., 177 S.E.2d 137 (1970)); and for a power and heating plant (Application of Board of Regents of Univ. of Oklahoma, 200 Okl. 442, 195 P.2d 936 (1948)). Payments for the medical expenses of athletes have been sustained from a special gates receipts and athletic contracts fund. State ex rel. Board of Governors of West Virginia University v. Sims, 134 W.Va. 428, 59 S.E.2d 705 (1950). Although the expenditure apparently was from general revenue funds, payment of expenses for the ceremony of inaugurating a president was considered related to the educational purposes of a university. Board of Regents of University and State Colleges v. Frohmiller, 69 Ariz. 50, 208 P.2d 833 (1949). The educational relationships of the expenditures in these cases seem so clear as to require no argument.

Cases in which the relationship is remote have not been presented because it is only within recent years that extracurricular activities, subsidized from fees in all colleges and universities in which the fee system is used, have been extended into novel and controversial areas. It is important, nevertheless, to observe that the expenditures by state boards previously sustained have been tested in part by the relationship of the expenditure to the educational purposes of the institution.

The Gay Student Union may play a peripheral educational role by placing its members (or some of them) in contact with the general public as identified homosexuals. If this contact serves to dispel the response so often encountered when a family oriented social group encounters a homosexual, some educational value is achieved by it. If the GSU serves as an effective information center concerning the problems of homosexuals, this activity properly can be described as having educational value. But set off against these features are two matters which deprive the GSU, in the view of the Committee, of a sufficient claim as an educational activity.

First is the posture of the organization and its members that only society is "sick"; that their problems--emotional and psychological--are the fault of society; and that the homosexual life is eminently desirable--with the homosexual a normal but misunderstood and hapless victim of mindless social prejudice. A number of writers have observed that homosexuals of the more militant type are seldom given to detailed introspection, although they will quickly enough find the fault for their plight in society. This, certainly, is the general approach of the very articulate witnesses whose statements appear in the transcript. Certainly that is Mr. Cress's view of Dr. Kameny's position (BR-31). Mr. Cress denies that his group promotes social theory but states that it hopes to perpetuate the truth (BR-36). What seems to emerge is a basically "noncontroversial" stance in which opinions are to be set forth, regarded as truth, and counteranalysis or arguments rejected. The books purchased by the organization are to be nonpathologic--those of recent vintage which support the homosexual way of life. An educational process requires reciprocal analysis, reciprocal response and not simply agreement with a propounded postulate. Mr. Vogel has testified that the Union has no "party line" but what seems to emerge from the testimony by the GSU representatives is a posture as rigid as any emerging from the Politburo without the relief of self-criticism through dialectical materialism. The posture of the GSU is precisely that which would appear to deny it qualification as an educational foundation if this were sought under IRS Regulations.

Under these regulations an organization may be educational even though it advocates a particular position or viewpoint so long as it presents a sufficiently full and fair exposition of the facts as to permit an individual or the public to form an independent opinion or conclusion. An organization is not educational if its principal function is the mere presentation of unsupported opinion. The GSU apparently will not present a full and fair exposition of the facts--but a single opinion which the members sincerely think is true.

Leonard Doob in his "Public Opinion and Propaganda" (1948) 237-238, has defined education as "the imparting of knowledge or skill considered to be scientific or to have survival value in a society at a particular time". He defines propaganda as the reverse--"an attempt to affect the personalities and to control the behavior of individuals toward ends considered unscientific or of doubtful value in a society at a particular time".

One question is: "What is scientific". Certainly this embraces knowledge which is open to argument and analysis and is therefore subject to verification--and this does not appear to be the status of the basic postulates of GSU. Another question is: "Who makes the determination of value". In this instance it must necessarily be the officers having the statutory duty to control the disbursement of funds for the educational purpose.

Second, the basic organizational process, assuming the organization does attract additional members, is "disintegrative" in that the student who opts for a homosexual life tends to withdraw himself from the mainstream of the university community. The same observation has been made, from time to time, of social fraternities, but with respect to social fraternities, there is usually active participation in many facets of University life. The homosexual who allies himself with GSU is probably a marked man, who will be tolerated in a community in which tolerance is a major value, but who will not be fully accepted as a member of the community. With the GSU, the homosexual student may find a home--but it is a home that will tend to withhold him from the mainstream of University affairs.

For the reasons stated, the Committee is of the view that the educational values of the GSU are outbalanced by the educational obstacles the organization seems to pose. With the Board exercising an implied power to assess a mandatory fee and exercising an implied power to disburse this fee for student activities, the Committee recommends that the activity subsidized be directly related to the accomplishment of the educational purposes of the University. The GSU is not an organization sufficiently implementing these purposes.

C. Restrictions on the Power of The Rector and Visitors to Disburse Public Funds for Personal Uses

There is a close analogy between the power of a public corporation (the Rector and Visitors) to disburse funds raised by a mandatory fee and the power of a municipal corporation to disburse funds raised by taxes and mandatory assessments. Neither the public corporation nor the municipal corporation, for example, has the power to expend funds for social and other private purposes which might exist in a private business corporation incidental to the conduct of its business.

When the Rector and Board imposes a fee upon students for a special purpose, the money collected becomes public money. The funds are paid into the State Treasury pursuant to Virginia Code § 2.1-180. The funds are then withdrawn for the purpose for which the collection was made and disbursed by the procedure which the Board approved in 1970. The funds are public money although earmarked for a specific purpose. It has been held, for example, that when a public educational authority requires a fee, with the authority to collect and disburse the fee delegated to the student body, the governing body is dealing with public funds and must set guidelines for its disbursement. Stringer v. Gould, 64 Misc. 2d 89, 314 N.Y.S.2d 309 (1970). The mandatory imposition by the public body impresses the fund with its public character. In State ex rel. Board of Governors of West Virginia University v. Sims, 134 W.Va. 428, 59 S.E.2d 703 (1950), the Court applied a similar analysis to funds derived from admission fees and from athletic contracts and which were earmarked for athletic purposes.

Coupled with the public character of the fund is a trust aspect associated with custody after withdrawal from the Treasury and its disbursement to student activities. This trust may be viewed as an express trust of a charitable nature implied from the facts or it may be viewed as a constructive trust implied by law under the circumstances of mandatory collection of the fee.

Facts which are the basis of an express trust are the university environment in which the funds are collected, the direction of the Board to collect and disburse the fee for a stipulated or special purpose, the relatively limited group from which the fee is collected and reasonable expectations and demands of members of the group for use of the fund. There is, of course, a trust res or property in the fund collected. There is no necessary incompatibility between the public and trust character of the fund.

There would be, for example, no doubt that the Rector and Visitors would have to refund the balance of the fee unexpended if it determined to cease funding student activities during a particular year. Although the Rector and Visitors probably would not terminate funding within a particular fiscal year, the cases indicate that voluntary contributions would be refunded on a theory of resulting, constructive or express trust and the duty to refund would appear stronger when the fee or dues are mandatory. V Scott, Trusts §§ 430.3-430.4 (3d Ed. 1967). Also, the Committee believes a student could obtain an injunction to prevent a diversion of the fee to a purpose which clearly was not a student activity. From an administrative aspect, the trust is similar to the familiar charitable trust in which the trustee has power to designate, within a particular charitable class, the beneficiaries of principal or income. So long as that discretion is exercised reasonably (is not unreasonable, arbitrary or capricious) the exercise of discretion is likely to be upheld. If a constructive trust (remedial trust) theory were applied, there would be an analogy to the handling of special bank deposits or general deposits for a special purpose. A bank, although bailee, is held in constructive trust for a wrongful diversion of the funds on special deposit. V Scott, Trusts § 530 (3d Ed. 1967). The student is required to pay the fee for a special purpose as a condition to obtaining his education. The reciprocal equitable obligation of the Rector and Visitors, although not set forth by statute, seems exceptionally strong.

A trust obligation of the Rector and Visitors, implied in fact or in law, would not permit fine discriminations by an objecting student between activities to be subsidized. But it does appear that two reasonable expectations would be recognized by Courts in this situation. (1) That the fee supported activity be one to which all students have de facto access. (2) The subsidized group must perform a service to the entire university. The latter was recognized in the guidelines of the Student Activities Committee of the University in its report which received the tacit endorsement of the Board in 1959. (Minutes, 13 Jan. 1959, p. 23.)

The use of disbursements from the fund to subsidize narrow and basically private purposes would seem barred by the public character of the fund. The trust relationship, express or implied, imposes upon the subsidized organization an obligation of de facto as distinguished from de jure access and requires the organization to meet a test of general university benefit.

While the Gay Student Union may not in fact embark upon any political activity, as its spokesmen suggest, it is a fair judgment that emphasis in its activities will be principally social and that these social activities will be limited de facto to homosexuals and perhaps some females with a major interest in their situation. This has been the pattern for homosexual organizations at other major institutions. These organizations may begin with a militant stance, invite speakers and perform an informational role. Most serve simply as centers for homosexual life--a base at the University to which homosexuals can resort--as it was put in a question to Mr. Cress, and in which he concurred, to "commune" and reinforce "each others predisposition" (BR-61). The probability here, as the experience has shown the development to be elsewhere, is that the Union will be simply that--an organization that will permit homosexuals to meet and socialize. This is not to adopt Mr. Hurd's view that the Union will be a homosexual's "lonely hearts" club. But the Committee is of the view that social activity of an exclusive nature is likely to predominate in the activity of the Union. It should be observed also that these social events will be de facto exclusive, just as membership in the GSU is de facto, if not de jure, exclusive. The fact is that heterosexuals, unless female, do not and in fact cannot, participate in these events because of the pressure of opinion. Prejudice of a well entrenched and unyielding character delimits a de facto line determining membership in this organization and participation in its events. This prejudice and the reasons for it must be considered in an assessment of the probable breadth and character of the GSU role in the future at the University.

Having viewed the Union as an organization primarily social in nature with a membership de facto exclusive and with de facto limited participation in its social events, the Committee also observes that the general area of GSU interest is reinforcement of the individual sexual preferences of its members. The Committee is aware that Victorian reticence to discuss sexual problems has disappeared among most of the members of our society. With the bars of censorship removed by the Supreme Court, raw sex in magazines, movies and in other media has become common household fare. But the Committee does consider that the cultivation and implementation of one's sexual preferences is a matter of private concern and should be privately financed if financing becomes necessary.

The public character of the money proposed for disbursement seems to the Committee to preclude the disbursement to support social activity and matters of such a private character that appear to loom large in the scale of values of GSU members.

The trust element of the mandatory fee would preclude the use of funds for an organization which is de facto exclusive. Despite a remark in their first newspaper, spokesmen for the GSU insist anyone can be admitted as a member. The question then is whether the Committee should take note of the deeply rooted prejudice and demand for social conformity which serves as a de facto limit to participation in GSU and its activities. As one writer has commented (Gross, "Strangers in Our Midst" (1962) 29):

The public has been conditioned to see the homosexual only in a particular way. It sees what it has been taught to see--that and nothing more. Since he is not as other men are, it is assumed that the homosexual must be in some way evil. This, in general, is the attitude of the unthinking person. It represents the elements of opinion in the Anglo-Saxon world in which the homosexual must live and move.

The Committee would be reluctant to take the position that deeply ingrained prejudice should be considered in describing a de facto membership limitation in an organization of Female, Black or Chicano students. One has no choice of race or sex. But as noted in the finding of facts by the Committee, the Committee considers that homosexuality, in the instance of a great majority of homosexuals, is volitional. There is evidence that psychotherapy can alter the homosexual pattern toward heterosexuality; although militant homosexuals either deny this or deny the desirability of altering the homosexual pattern.

If the homosexual chooses his way of life, organizes to promote his practices, and does so in obvious defiance of strong social conventions, his rights as a dissenter should be protected. At the same time the homosexual should be held to have set the stage for the conflict that places a de facto limit to membership in his organization.

As to the second aspect arising from the trust element associated with the fee--the benefit to the University from the subsidized activity--the Committee refers to its statement in subdivision "A" concerning the insufficient educational value in the work of the GSU. There may be other values. The mere existence, for example, of an organization to be tolerated despite contrary personal inclinations of a member of the public has salutary effect upon that member when he reexamines his personal value structure.