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//The complexities of donor intent

The complexities of donor intent

One of the persistent challenges facing private philanthropic organizations is the question of donor intent. This problem is only amplified when dealing with family foundations, which so often owe their existence to a particular individual with very specific ideas about how his or her money should be spent.

Should the founder’s vision always remain determinative for the foundation’s future giving, even after their death? If so, what are some of the best ways to avoid mission creep? In family foundations, is there any such thing as legitimate innovation?

These and other questions sit at the center of Martin Morse Wooster’s book, How Great Philanthropists Failed and You Can Succeed at Protecting Your Legacy. Wooster’s monograph is a thorough look at fourteen philanthropic trusts, nine of which he argues violate donor intent and five of which succeed in preserving it.

Part I of the book covers philanthropists’ ‘failures’ to secure their legacies, among which Wooster counts such powerhouses as the Rockefeller Legacy, the John D. and Catherine T. MacArthur Foundation, the Ford Foundation, and the Pew Charitable Trusts.

In Part II Wooster turns to consider the success stories: The JM Foundation; the Lynde and Harry Bradley Foundation; the Duke Endowment; the Conrad N. Hilton Foundation; and the Daniels Fund.

The first thing to notice about Wooster’s subjects is the clear political divide. Wooster acknowledges this fact at the beginning of Part II, asserting that, “Usually, the entrepreneurs who create great fortunes tend to be conservative or libertarian [while] those who inherit their wealth, including most foundation executives and heirs to estates, tend to be liberal or socialist” (p. 227).

This seems to me a bit too tidy, inasmuch as it risks preempting the definition of a ‘good’ philanthropy as one that adheres to a conservative program, while a ‘bad’ one can be categorized as such simply by asking whether it supports recognizably liberal causes. Except for brief mention of Chuck Feeney’s Atlantic Philanthropies, I lament that none of Wooster’s in-depth success stories are about liberal foundations that stayed liberal. And I also lament that he didn’t provide any substantial proof to back his assertion that great fortunes tend to be made by conservatives or libertarians. This betrays certain unargued presuppositions in the book.

In any case, this all points to the essential question raised by Wooster’s book: To what extent are we today bound by the ‘dead hand’ of the wealthy? Should a given fortune remain forever tied to the narrow intentions its founder had for it, or is there room for the original vision to grow, even to change?

Indeed, Wooster is right that this is no abstract legal question. To take an example from outside the book, the highly public Rhodes Must Fall campaign that has in the last two years spread from Cape Town to Oxford demands in part to have Cecil Rhodes’ fortune (which funds the prestigious Rhodes scholarships, among much else) redirected to social and educational investments that the racist nineteenth-century colonialist surely would have found objectionable.

Should the Rhodes Trust hold fast to the letter of Rhodes’ will, however, they would find themselves continuing to promote the “extension of British rule throughout the world.” Are we to take the fact that the Rhodes Trust now uses its wealth to send native South Africans and other under-represented populations to study at the world’s best university as a failure of donor intent?

It’s precisely the problem indicated by the Rhodes example that led Vassar philosopher Barry Lam to argue in an Aeon essay last year that blindly adhering to the posthumous wishes of the dead is a ‘vain and narcissistic’ undertaking.

Lam attacks strict inheritance rules, trusts, and family foundations as restrictive and counterproductive mechanisms that perpetuate inequality and distract from more pressing concerns. Instead, Lam suggests, the wealthy should be encouraged to spend down as much of their wealth as they can within their lifetimes and then, after they’re gone, their money should revert to the common good.

Lam effectively wants to see the wishes of the dead give way completely to the needs of the living.

Most of us, I assume, are somewhat uneasy with Lam’s maximal position. We think that if you amass a fortune in your life, you should at least have some say in distributing it after you die. On the other hand, I’d venture to guess that most of us are happy to see the Rhodes money go to good use and untroubled by the fact of its creative redistribution.

In other words, we’re generally not donor intent purists.

The law already recognizes this gray space: Wooster cites a 1990 case from New Hampshire in which a civic scholarship was ruled unconstitutional since it was only intended to benefit Protestants, for example. (Incidentally, the last section of Part II of Wooster’s book contains a skillful guide through the legal history of donor intent, from the seventeenth century to the modern day.)

What Lam misses is what G.K. Chesterton recognized: That we belong to a “democracy of the dead” in which the prior generations have a right to be heard. What donor intent purists miss is that the dead still only get a partial vote—the wishes of the late super-rich still have to be weighed against some more independent standard, lest they become a source of division in our society today.

What’s needed, then, is a truly social notion of civil society, one in which the living and the dead bear some responsibility for and towards each other. This requires that we not endow either party with an absolute prerogative.

Advocates of a saner approach to charity often stress that formal proceduralism is the death of organic relationality; this should apply just as much (if not especially!) to our understanding of donor intent.

2018-08-30T09:33:48+00:00 August 30th, 2018|Categories: Nonprofit News|