University reimburses Robertson Foundation for discontinued program
Three-year trial program funded graduate students in contiguous departments
Princeton University has reimbursed the Robertson Foundation for the costs associated with a three-year trial program, known as the Graduate Funding Agreement, that from 2000 through 2002 provided funding for graduate students in academic departments at Princeton that were closely related to the Woodrow Wilson School of Public and International Affairs.
Despite its short duration and relatively modest annual cost, the agreement has been cited repeatedly in the lawsuit regarding the Robertson Foundation that William Robertson and several other members of the Robertson family filed in July 2002 to regain control of the funds that his mother donated to Princeton in 1961. The Foundation was established to support the graduate program of the Woodrow Wilson School, and the University has consistently pointed out that the objective of the funding agreement was fully compliant with the purposes of the Foundation and plainly authorized by its charter. But the University also has acknowledged error in not disclosing to the Robertson Foundation board that the Foundation would be funding the agreement.
Douglas S. Eakeley of Lowenstein Sandler, the University's lead counsel in the lawsuit, has advised New Jersey Superior Court Judge Neil H. Shuster of the University's decision to reimburse the Foundation for the $782,375 that was expended under the agreement. Eakeley noted that the University made the refund during its recent annual budget reconciliation process not because of any reservations about the appropriateness of the agreement, but solely because of the inadequate disclosure of the agreement to the Foundation board.
The Graduate Funding Agreement was established by former Woodrow Wilson School Dean Michael Rothschild to support Ph.D. students in three contiguous departments -- economics, politics and sociology -- for the purpose of attracting and retaining excellent faculty in the School. At the conclusion of its three year trial, the agreement was discontinued by the current dean, Anne-Marie Slaughter, when she took office in 2002.
Throughout the lawsuit, the University has demonstrated that it and its designated trustees of the Foundation have effectively carried out the mission of the Foundation over the past 45 years; have met their fiduciary obligations in overseeing the Foundation's assets and expenditures (its assets have grown from $35 million to more than $800 million); have contributed to a substantial strengthening of the graduate program of the Woodrow Wilson School; and have significantly enhanced the governance practices of the Foundation in recent years, despite continuing opposition by members of the Robertson family.
Governance modernizations over the past 4 1/2 years under the leadership of University President Shirley M. Tilghman have included enhanced notification procedures, improved materials for meetings, the appointment of an independent secretary/treasurer for the Foundation, and the adoption of a new funding formula (the Slaughter formula) to update the Bowen formula that guided Foundation spending for most of its history.
"This decision by the University to reimburse the Foundation for the Graduate Funding Agreement because notification was not provided represents a further affirmation by the University of its commitment to sound governance practices for the Foundation and its willingness to take corrective action when it finds that such practices have not been followed," Eakeley said.