Philanthropy with strings attached
BOB MOON: Riddle me this: When is a gift not really a gift? Maybe when it comes with strings attached. Charles and Marie Robertson of A&P Grocery fame donated $35 million to Princeton University 45 years ago.
Now that donation is worth more than $750 million and their descendents don't like the way the money's being spent. They sued the university in 2002. And today lawyers for the Robertson family and the university were in court.
Stacey Palmer is an editor for the Chronicle of Philanthropy. Stacey, thanks for being with us.
STACEY PALMER: Thank you.
MOON: So, give me a thumbnail, if you will, about what this case is all about.
PALMER: This is a pretty complicated case. But what it boils down to is that the heirs of a donor who gave a lot of money to Princeton are pretty angry about how their money was used. And they're taking Princeton to court.
MOON: Now, is this unusual for a donor to say, "Give me back my money"?
PALMER: It's very unusual. There certainly have been controversies between donors and charities, but a case getting this far in the courts is extremely unusual. And, usually, courts don't even consider things from donors. They don't necessarily have the legal right to sue.
MOON: What specifically are the Robertson heirs arguing here.
PALMER: They're arguing several things about how they believe the money was misused. But the biggest thing is that they feel Princeton didn't stick to the idea that students should be trained to go into public service, especially the Foreign Service, which is what the donor really wanted to see happen. And Princeton says, "Well, students don't want to do that as much anymore." So it's harder to attract them. So they needed to spend the money generally to train people for general careers that serve the public interest.
MOON: Well, are colleges worried about this because it could set a precedent?
PALMER: Very much so. And donors are also trying to make sure that they have legal contracts where they say this is how the money is to be used. So we're seeing a lot more litigation possibilities and that's what charities are really worried about is that once they see donors suing, that donors will just decide to do this all the time.
MOON: Now, in the case of a donation like this, the world changes. This donation was made back in 1961 at first. Is it possible that the focus of the use of this money can change?
PALMER: Absolutely. And that's really at the heart of the argument as to whether it really makes sense to uphold what the donor wanted. And the donor's heirs say that what the donor wanted still holds in today's society and is a good idea. But Princeton says perhaps things have changed. And that dispute comes up all the time in charitable giving. When is it time to have a little bit of flexibility? So, donors need to think hard about that. Do they really want the same restrictions a hundred years from now to apply?
MOON: It sounds like the lesson in this might be to be very specific about any donations that you're going to make.
PALMER: Absolutely, and to stay involved in it. And the family feels very much that Princeton didn't really disclose all the information and didn't tell the truth. It's not all philosophical. There's also just questions about how the money was handled. So, donors really need to stay on top of things and make sure they know how their money's being used.
MOON: When you make a gift, doesn't that take it out of your hands? Isn't a gift just that — a gift?
PALMER: Yes, when you turn over the money to a charitable organization you get a tax deduction for that money and you have given it over to a tax-exempt institution. But clearly there is always the expectation that the charity will do what you wanted with the money. That that's why you gave it too. So, part of this is legal but part of it is also just a moral question. And so charities definitely try to do what the donor wanted but they don't have to. And if they think it's not the responsible thing to do, then they should move on and do what they think is the right thing to do with the money.
MOON: Thank you very much for joining us.
PALMER: Thank you.
MOON: Stacey Palmer is an editor for the Chronicle of Philanthropy.