‘Worth’: Questions of Donor Intent

Wealthy Americans “are increasingly turning to the modern-day equivalent of the pharaohs’ pyramids: the private foundation,” says Worth magazine (April).

“Sufficiently endowed, these vessels of immortality get to dispense beneficent memories of the founder long into the future. Over time, however, the original focus can be lost or even subverted when those who administer the largesse embrace different philanthropic values.”

In the past 20 years, the article notes, conservatives have been particularly concerned that many charitable foundations are doing the opposite of what their founders would have wanted. For instance, the magazine notes, some organizations have criticized the David and Lucile Packard Foundation for making grants to organizations pushing “slow growth” economic policies.

Mr. Packard “was not a slow-growth kind of guy,” the magazine says. Neal B. Freeman, head of the Foundation Management Institute in Vienna, Va., tells Worth that the case “is so open and shut that it takes my breath away.” He adds: “The largest supporter of the sustainable-development movement is the Packard Foundation.”

Liberals, by contrast, have had relatively little to say about debates over donor intentions. “Their oxen are not being gored, for one thing. Or not yet. It’s certainly possible to imagine a liberal donor — Ted Turner, for example — one day having his desired support for various progressive causes thwarted by a foundation administrator.”

Today’s rich are more likely than donors in the past to take precautions to insure that their intentions can’t be subverted, the magazine says. In large part, they are trying to do this by making sure the documents creating their estates are very clear about how money is to be used. In addition, “donors are learning the importance of selecting board members who share their vision.”

Mr. Freeman advises donors to establish an independent review process that will examine a foundation’s work 10 to 20 years after a donor’s death and empower the leader of that review to replace board members who have veered from a founder’s wishes.

But, the magazine says, the “surest way to dodge betrayal of donor intent is to forget about building a monument like Ozymandias’s and spend it all in the here and now.”

The article is available at http://www.worth.com.