Donor Intent Revisited

The Washington Times (Washington, DC), September 28, 2008 | Go to article overview

Donor Intent Revisited


Byline: William Robertson, SPECIAL TO THE WASHINGTON TIMES

A lawsuit filed recently by a major benefactor of Schenectady's Ellis Hospital, near Albany, N.Y., has pushed the issue of donor intent into the news again.

Filed in U.S. District Court in Albany by the niece of John Belanger, who donated $2.6 million to the hospital in 1968 to support nursing education, the lawsuit claims the hospital used the money from the restricted donation to pay for general operating expenses and that the hospital trustees, by allowing this, breached their fiduciary duty to see that the money was used properly.

While I don't know all of the details of the case, I do know more than I had ever hoped to know about donor intent, as a result of my family's lawsuit - the largest such lawsuit in history - against Princeton University.

Donor intent is a long-established legal (and we would say moral) principle that when a charitable gift is given for a specific purpose it must be used for that purpose only. In recent years, a number of nonprofit executives across the country - many of them college and university officials, but hospital administrators and other nonprofit executives as well - have acted as if they can willingly violate this principle and suffer no consequences. Their cavalier attitudes threaten to undermine the important relationship between nonprofit organizations and their donors and could, over time, have a devastating impact on the nonprofit sector.

Our lawsuit, filed six years ago this summer, charges that Princeton officials willfully misused as much as $200 million or more (a court-supervised accounting will be required to determine the exact amount) from a charitable foundation established by my parents in 1961. That foundation, known as the Robertson Foundation, was established for an important public purpose: to prepare graduate students at Princeton's Woodrow Wilson School of Public and International Affairs for federal government careers, particularly in foreign affairs and international relations. The lawsuit additionally charges that Princeton officials have conspired to cover up the wrongful spending.

If the Ellis Hospital and Princeton cases were the only such examples, they might be easier to ignore. But they appear to be the tip of a growing iceberg. …

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