Another blow at 'donor's intent'

WorldNetDaily.com ^ | June 03, 2004 | William Rusher

[JohnHuang2]

One of the major scandals in the field of charitable giving is the way in which a foundation set up to serve certain purposes has the money squandered by disloyal foundation executives on causes the original donors would have despised.

Now there are indications that the Pew Charitable Trusts may be heading in this direction. The Trusts were derived from the fortune amassed by that crusty old Pennsylvanian, the late Joe Pew, and created by his children. Currently, the Charitable Trusts' assets total $4.1 billion, making the foundation one of the 10 largest in the country.

Until recently, the Trusts operated by making annual grants to seven separate major programs: the Pew Research Center for the People and the Press; the Project for Excellence in Journalism; Stateline.org; the Pew Internet and American Life Project; the Pew Forum on Religion and Public Life; the Pew Hispanic Center; and the Pew Global Attitudes Project.

Last November, board members voted to change the Charitable Trusts from a private foundation to a public charity. This gave them the flexibility to centralize under one roof – their own – all seven of the previously independent programs. From now on, the entire $4.1 billion will be available to the Trusts' directors to spend as they see fit, and on any projects the board members desire. In effect, they will be presiding over the world's most heavily endowed think tank.

And the official reason for these sweeping changes? As Hamlet said, "Thrift, Horatio, thrift." Rebecca W. Rimel, president and chief executive of the Trusts, estimated to the New York Times that Pew will spend $15 million a year on the new Pew Research Center (as the consolidated program will be called), with eventual savings of about $1 million annually.

Well, what business is it of yours or mine how these foundation executives disburse, to suit themselves, the billions of dollars that have fallen into their laps? ("What a pity H.H. Rogers' money is tainted," someone remarked to Mark Twain about a prominent Standard Oil executive. "It's twice tainted," Twain growled back. "'Taint yours and 'taint mine.")

But of course Rimel and her friends have all that money to play around with only because Congress, in its wisdom, decided not to tax the foundation's funds on their way from the Pew Trusts to the ultimate recipients. That's how charitable contributions are encouraged.

It's not a question of what such people choose to do with the money, it's a question of why they have the power to make the choice at all. It's up to Congress, and perhaps the IRS, to make sure, if they can, that the posthumous manipulators of the great fortunes don't totally traduce their original purposes. The key brick in the wall is the Senate Finance Committee, chaired by Sen. Charles Grassley, R-Iowa, with the cooperation of its ranking member, Sen. Max Baucus, D-Mont. They are currently mulling over a reform bill, which provides, among other things, harsh penalties for "abusive trustee practices."

But this is simply the old broken-wing trick. The problem, by and large, isn't the trustees, it's the staff: the tens of thousands of managers who actually run the foundations, and effectively make most of the decisions as to where the money goes. Congress can curb these high-flying foundation bureaucrats if it wants to. Uncurbed, they are in a position to powerfully influence the policies and direction of the United States according to their own agenda.