Is it legal for a college or university to accept a donation given with conditions on how it is to be spent, but then turn around and spend it on something else? A growing number of people who have made sizeable donations over the years to many of America’s most famous universities are beginning to ask that same question.
Now a New Jersey court has granted a day in court to the children of a couple who made a substantial donation to Princeton University years ago for the purpose of training graduates for jobs in government are demanding return of more than $200 million they say the school used for other purposes.
The case – Robertson v. Princeton – is in New Jersey Superior Court. It began in 1961 when Charles and Marie Robertson endowed the Robertson Foundation with $35 million in stock and instructed the foundation to use the earnings from the stock to train Princeton students for careers in the U.S. government in foreign policy and international.
Years later after it had become clear that Robertson Foundation funds were being used for other purposes, including being diverted to the school’s general funds and to academic departments not connected to the foundation’s purpose, the Robertson children took the school to court, claiming such diversions were illegal.
“The family believes the evidence of such wrongdoing is overwhelming and looks forward to introducing this evidence at trial,” said the Robertson family’s lead attorney Ronald Malone of Shartis Friese LLP,
“Although the court did not go as far as we had hoped on the ‘Business Judgment Rule’ motion,” Malone said, “the court explicitly ruled that
In this regard, the court ruled that ‘it would be an act of disloyalty to actively or purposefully conceal or prevent the dissemination of material information to the Foundation Board, which may reveal that a certain expenditure would not appropriately warrant reimbursement.” Malone said “ample evidence of such concealment” would be produced at trial.
With 355-page decision issued today in Trenton, Judge Neil Shuster cleared the way for a trial likely to be scheduled next year. The Robertson children said in a statement issued after Shuster’s decision that they are eager for the trial.
“We’re pleased that Judge Shuster, after hearing all the arguments and reviewing all the relevant case law, has decided in our favor on the motions related to the ‘fiduciary duty’ and ‘sole beneficiary’ issues,” said lead plaintiff William Robertson, son of Charles and Marie Robertson. “These rulings should cause
William Robertson’s sister, Katherine Robertson Ernst, said “our parents trusted
The Robertson children hope the ultimate outcome will be return to the foundation of approximately $200 million they say
The Robertson case is potentially a landmark because colleges and universities have received literally billions of dollars in contributions from supporters, often for quite specific purposes, yet critics claim now that such funds too often are spent for other reasons.
Bloggers seeking more information can check out the Robertson family’s web site on the case, which is linked above or email Herb Berkowitz at: [email protected].
FULL DISCLOSURE: Herb and I are long-time friends and I worked for him for several years at The Heritage Foundation. He and his daughter Jennifer are assisting the Robertson family with their case against Princeton.
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