December 12, 2008 | Read Time: 2 minutes
Nonprofit observers are debating who is the winner of the dispute between Princeton University and the Robertson family now that the two have agreed to end a closely watched lawsuit that raised questions about how nonprofit groups adhere to donor demands.
Under the agreement, Princeton will pay $50-million, plus $40-million in legal fees, to charitable funds controlled by heirs of Charles and Marie Robertson, a couple who in 1961 gave money to start an endowment that supports the university’s Woodrow Wilson School of Public and International Affairs. In 2002, William S. Robertson, their son, and other family members sued the university, claiming that it had violated the terms of the gift.
The endowment, worth more than $700-million, will be dissolved as part of the settlement, which still requires approval of a New Jersey Superior Court judge. Princeton will retain most of the money in a new endowment controlled solely by the university.
For details, read The Chronicle’s article about the agreement.
The decision was a victory for the Robertsons and other donors, writes Neal B. Freeman, chairman of the Foundation Management Institute who has provided advice to the Robertson heirs about the case.
“Princeton blinked,” he writes on the Web site of The American Spectator. He says the university likely did so because it was concerned about the negative press coverage of a lengthy trial and because it probably needs cash in the current economy.
As for similar disputes, he writes that the “Robertsons have set an instructive and hopeful example for donors and grantees everywhere. The next time a nonprofit executive is seized by larcenous impulse it may be necessary only to whisper in his ear the magic word, ‘Princeton.’”
But Jack Siegel, a nonprofit lawyer in Chicago, questions what the Robertsons accomplished.
On his blog, Charity Governance, he says that William S. Robertson “achieved nothing except to waste somewhere around $80-million on lawyers and the other costs of litigation.”
He draws several lessons from the fight, including that donors need to “check their egos.”
“Donors should stop telling institutions that they know more about running institutions than the professionals who run the institutions. Complex restrictions lead to waste. Times change,” he writes.
Read The Chronicle of Higher Education’s article
about what lessons can be gleaned from the dispute.
What do you think? Who do you think prevailed? What does the agreement mean for donors and nonprofit groups? Click on the comments link to share your views.
