Commentary published on Robertson case
Posted September 20, 2007; 01:37 p.m.
Vice President and Secretary Robert K. Durkee addressed the debate about issues relating to donor intent that are raised by the Robertson lawsuit in this commentary published in the Sept. 20, 2007, edition of Forbes.com. The commentary is in response to an article submitted by a plaintiff in the lawsuit, which was filed against the University in 2002. This commentary also appears on the University's Robertson lawsuit website, which provides background and information about the case.
Princeton on donor intent
William Robertson recently wrote a commentary for Forbes.com that thoroughly misrepresents the "donor intent" issues raised by his five-year-old lawsuit against Princeton University.
Contrary to what he claims, his lawsuit seeks not to honor donor intent, but to violate it. It seeks not to protect arrangements put in place by his parents 46 years ago, but to overturn them.
Specifically, through his lawsuit he is seeking to seize control of funds that his mother, Marie Robertson, gave to Princeton in 1961. These funds were given for the sole purpose of maintaining and expanding the graduate program of Princeton's Woodrow Wilson School of Public and International Affairs. For 46 years, that is exactly how the funds have been used, helping to support a school that does an excellent job of preparing students for careers in government service and related fields. In his commentary, William Robertson never mentions that this was the purpose of his mother's gift.
William Robertson is also seeking to overturn the governance mechanism that his parents established to administer the gift. While referred to as the Robertson Foundation, this entity is not a private foundation, but rather is what the tax code recognizes as a Type 1 supporting organization, which exists solely to support a particular charitable organization, in this case Princeton. This structure was established, as the donor requested, to ensure that Princeton would retain final control over the use of the gift so the University would have the ability to make the kinds of academic decisions and long-term commitments that are essential to sustain a world-class graduate program. The structure was also put in place to maximize the tax advantage to the donor.
Under federal tax law, this organization may not be controlled by the donor or the donor's family. In 1970, Marie's husband, Charles, wrote to the IRS to confirm that the foundation qualified as a supporting organization, noting that the funds had been donated "exclusively for the benefit of Princeton" and that the foundation's governance is "controlled by Princeton." William Robertson wants to overturn both of these expressions of intent by his parents.
The question posed by the litigation is not whether the recipient of a charitable gift has an obligation to fulfill the commitments it makes in accepting the gift. Of course it does, and Princeton has an excellent record of meeting its commitments and sustaining strong relationships with donors over more than two centuries.
Rather, the real questions posed by the litigation are the following:
Can the donor's son re-write a 46-year-old governing gift instrument so he can seize control of the gift?
Can he convince a court that a Type 1 supporting organization should not be governed as federal tax law requires?
Can he convince a court that the supporting organization should be limited to spending only dividends and interest on its investments -- as he proposes -- even though established law allows the spending of capital gains?
Can he convince a court to revisit, item by item, spending decisions made over four decades by educators who used the gift to develop one of the world's preeminent graduate schools of public and international affairs--spending decisions that in this case were overseen by a board on which he has served since 1974 and that his father chaired for the first 20 years of its existence.
In posing these questions, the Robertson lawsuit seeks to redefine some of the fundamental principles of American philanthropy and overturn some of the laws and best practices that govern charitable organizations.
Prior to the filing of the lawsuit, William Robertson and other family members concurred in the decisions of the Robertson Foundation board and praised the work of the Woodrow Wilson School. When he filed the lawsuit, it was over differences about investment strategy, not spending. Over the past three and a half years, the investment strategy that the board approved over his objections has increased the value of the foundation's endowment by more than $300 million.
In his commentary, William Robertson fails to mention that his lawsuit and his accompanying public relations campaign are being funded by a private foundation he heads (the Banbury Fund) that is supposed to be devoted to charitable purposes. His use of that fund to cover the very substantial costs of the lawsuit illustrates his willingness to use private foundation funds for other than their intended purposes. Further information about this and other aspects of the lawsuit can be found at http://www.princeton.edu/robertson/about/.
Finally, William Robertson refers to the federal government's need for new talent without even mentioning the key leadership role that the Woodrow Wilson School plays in identifying and addressing this challenge. For example, in cooperation with the Partnership for Public Service, the school has recently created a prestigious new Scholars in the Nation's Service Initiative to encourage more of the nation's very best students to pursue careers in the federal government. At a national conference later this fall, Princeton University, the Woodrow Wilson School and the Partnership will seek to encourage many other colleges and universities to develop similar programs.
Robert K. Durkee is vice president and secretary of Princeton University