Brother, Can You Spare 15 Billion Dimes?
Donor intent is among the most crucial issues with which a nonprofit must wrestle. The subject comes up often, with donors or their descendants regularly arguing that the recipient of their largess isn’t properly administering the gifts they’ve made. It isn’t often that the argument could result in a $1.5 billion — that’s with a b, friends — hit, but not all nonprofits are Princeton University. According to today’s New York Sun:
The heirs of the A&P supermarket fortune are suing the Ivy League school, arguing that Princeton did not follow the terms of a $35 million gift their family bestowed on the university in 1961. The Robertson Foundation, now worth more than $800 million, was established to increase the number of students dedicating their careers to government service at the Woodrow Wilson School of Public and International Affairs at Princeton. Instead, the university used the money to build a school of public policy and to enhance its politics and economics departments, the lead counsel for the Robertson family, Ronald Malone, said yesterday.
In a ruling that is being hailed as a victory for donors, Judge Neil Shuster of the Superior Court of New Jersey left open yesterday the possibility that a connection between the Robertson Foundation and Princeton could be severed, and that the money from the foundation could be distributed by the family to other colleges and universities. The family’s endowment could be worth $1.5 billion if the judge finds that the university diverted Robertson money to its general fund.
Princeton won’t go out of business if it loses even that much scratch from its endowment, but what about smaller institutions that can’t rely on tuition revenue and have to plead for donations to stay afloat? I have no idea what transpired between the university and the Robertsons over the last several decades, but somewhere a disconnect occurred. If Princeton did not exhaust every possible avenue to reach out to the family and communicate why its ideas on spending the money allocated in the original gift served to fulfill the donor’s intent, then it made a critical mistake. This should and will be an intensely followed case, one with immense ramifications for nonprofits. | 501(c)
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