Although it sucks that the chapter had to close, and the active members weren't consulted or told about the decision, I do agree with the Phi Sig national office's determination that "the chapter’s overall experience was not what we would hope for..."
The active members' sorority experience would be negatively affected having to COB all the time, and trying to maintain chapter operations with a skeleton crew would probably become tiring and stressful and lead to burnout.
It's admirable that the existing members truly wanted to proceed with chapter operations, and they probably had a very strong and intimate membership, it just isn't the quality experience you'd want your members to have.
Just my opinion. Of course this wouldn't be as much of an issue if chapter houses were such a necessity at some campuses, maybe.
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