May 22, 2007 | Read Time: 2 minutes
Two medical institutions were unwise to accept gifts with strings attached by the oil billionaire T. Boone Pickens, writes Jack Siegel on his Charity Governance blog.
“The structure of these two gifts smacks of unnecessary meddling,” he writes, adding that Mr. Pickens, “like many wealthy donors, is acting in a paternalistic manner.”
The Chronicle of Philanthropy reported that Mr. Pickens gave $50-million each to the University of Texas Southwestern Medical Center at Dallas and the M.D. Anderson Cancer Center, in Houston, on the condition that the money is invested so it grows by at least 10 times.
The institutions cannot spend any of the money until that happens—and if they do not reach that target within 25 years, they will have to give any money they have made from the investments to another nonprofit organization.
“Several aspects of these restrictions bug us,” writes Mr. Siegel, a Chicago lawyer and consultant. “First, implicit in Pickens’ gifts is an apparent belief that our present-day medical system is not worthy of funding or investment.” Second, he says, Mr. Pickens will receive a charitable deduction that is subsidized by people alive today who will not be able to benefit from his gift.
“Third, Pickens apparently believes the world will be the same tomorrow as it is today,” he says. But if the United States ever finally overhauled its public health-care system, private endowments of medical institutions may no longer be needed, he says.
He says he also worries that smaller-ticket donors with big egos could force community foundations and other grant makers to accumulate income for long periods of time so their names would be attached to a bigger sum.
Donors, he concludes, should “show more respect for those running institutions.”
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