Jewish World Review August 5, 2004 / 18 Menachem-Av, 5764

James L. Martin

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Consumer Reports

A warning to seniors on charitable giving | Some 2,300 years ago, the Greek philosopher Aristotle observed that it's "an easy matter" to give away money. "But to decide to whom to give it, and how large, and when, and for what purpose" is not an easy matter, the wise man said.

Many senior citizens will eventually face this uneasy matter. According to a recent study by the Boston College Social Welfare Research Institute, $41 trillion or more "will be transferred via estates" during the first half of the current century. An estimated $6 trillion of this will go to charity, the researchers estimated.

Some of the money will change hands in large amounts. For example, when Joan Kroc, the late widow of McDonald's hamburger tycoon Ray Kroc, died last October, she left more than $1.5 billion to the Salvation Army and hundreds of millions more to other charities. But most bequests will go unnoticed, partly because they will involve much smaller amounts of money and partly because the benefactors may wish to remain anonymous.

In fact, bequests are just part of the picture. Last year, for example, corporations, foundations and individuals donated an estimated $240.7 billion to nonprofit organizations in America, the Giving USA Foundation reported in June. So "charity" is big business in America.

But charity is also facing a potential crisis. The crisis revolves around a central question: If you give money to a charity for a specific purpose does the recipient of the gift have an obligation to use it for that purpose?

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To most people, the answer would seem like a no-brainer: Of course charities have such an obligation. If they don't want to use a gift as a donor intends, they can simply return the gift.

But such moral clarity increasingly is lacking in our society.

A case in point: In 1961, the late Charles and Marie Robertson donated $35 million in A&P stock to establish a charitable foundation. The foundation's sole mission was "to establish and maintain and support" at Princeton University's Woodrow Wilson School of Public and International Affairs, a graduate school, "where men and women dedicated to public service may prepare themselves for careers in government service, with particular emphasis on ... international relations and affairs."

Thanks to wise investment decisions and growth in the economy, the value of the original gift has increased dramatically. Though Princeton has spent $300 million of the Robertson Foundation's money over the last 43 years, the foundation endowment is still worth nearly $600 million today, according to reports.

But the issue isn't the money; it's how the money is being used.

According to a lawsuit filed by Mr. and Mrs. Robertson's son and daughters, Princeton has diverted more than $100 million of the foundation's money into projects, salaries and other expenses that have little or nothing to do with the foundation's mission - while, by and large, ignoring the purpose of the gift. Indeed, while Robertson Foundation funds have provided full tuition and stipends to more than 1,700 students, they say, fewer than 12 percent of the program's graduates have gone on to appropriate government service.

Today's senior citizens fought fascism in World War II and communism in Korea and during the Cold War. They understand the importance of public service and sacrifice. They recognize the difference between right and wrong. And they can appreciate why Charles and Marie Robertson, just months after President Kennedy called on Americans to "ask not what your country can do for you, but what you can do for your country," would make such a gift to support public service.

Princeton University would appear to have done a great injustice - not only to the Robertsons but to the American people.

There is clearly a principle involved here. When we give money to a charitable organization for a specific purpose, that's how the money should be used.

If the Robertson children are correct, Princeton alumni should be ashamed of their alma mater. In the meantime, senior citizens who are contemplating gifts or bequests need to exercise caution.

Learn everything you can about a charity's programs, operations and finances before you give money. Give only to organizations that will use your dollars for purposes you support. And make sure the recipient organization endorses the "Donor Bill of Rights," a code of ethics developed by several major fundraising organizations and endorsed by many nonprofits.

James L. Martin is president of the 60 Plus Association, a conservative senior citizens' advocacy organization. Comment by clicking here.


© 2004, 60 Plus Distributed by Knight Ridder/Tribune Information Services