The Website of The Future of Newcomb College
Legal Q&A
What is the lawsuit now pending against Tulane?
Susan Henderson Montgomery v. Administrators of the Tulane Educational Fund, is a successor to Howard v. Tulane, which established the right of a would-be heir or legatee to enforce a condition of a donation.” This lawsuit specifically asks the courts to:
· Confirm that Mrs. Newcomb’s donations to the Tulane Board were subject to a condition or charge;
· Confirm that such condition or charge was that the Tulane Board maintain and operate Newcomb College;
· Confirm that the Tulane Board from 1886 to 2005 accepted and performed the charge and condition that Mrs. Newcomb placed on these donations; and
· Order the Tulane Board to honor the condition and charge in Mrs. Newcomb’s will by reopening and operating Newcomb College and restoring its endowment.
What is the main issue?
The cases are really about honoring a donor’s intent. Here the donor is Josephine Louise Newcomb whose stated intention was that her fortune be used for the maintenance of Newcomb College as a separate women’s college within Tulane University.
Would preserving Newcomb be a financial difficulty for Tulane?
Tulane has stated that dissolving Newcomb does not involve financial issues. The administration has repeatedly said that it wanted to dismantle Newcomb so that all undergraduates in the university have a consistent experience. They have also stated that Newcomb women enjoyed a better college experience and stronger allegiance to their college than the men of Paul Tulane College.
It is important to remember that Newcomb continued to be almost self-sufficient financially and well supported by its alumnae. The only cost saving to Tulane in abolishing Newcomb appears to be the salary paid to the dean of the college; however, Tulane now incurs a similar expense with the salary paid to the director of the Newcomb Institute. Therefore, preserving Newcomb would not be a financial hardship for Tulane, and would even enhance alumnae giving. Importantly, it would preserve one of Tulane’s most distinctive, marketable features, which would attract women. This is especially important at a time when applications to Tulane by women are decreasing markedly.
Who are the plaintiffs in the lawsuit?
Because Mrs. Newcomb cannot speak for herself, the action is being brought by her great great great niece, who represents Mrs. Newcomb, and who is descended from her sister, Eleanor Ann LeMonnier Henderson. The plaintiff is asking the court to enforce the terms of her relative’s gifts. She is represented by attorneys from Simon, Peragine, Smith & Redfearn of New Orleans.
How did we get to this point in the proceedings?
On May 20, 2008, the Louisiana Supreme Court heard oral arguments in Howard v. Tulane case appealing an earlier ruling by the trial court.
When plaintiffs applied to the La. Supreme Court, the seven justices voted unanimously to grant a writ of certiorari to the plaintiffs so that the justices could review the case. This allowed plaintiffs to appeal the 2-1 decision upholding the trial court decision by Judge Rose Ledet. (Judge Ledet denied a preliminary injunction that would have reopened the college on June 29, 2006. However, in her judgment, the judge said, “A clear reading of Ms. Newcomb’s will shows that she intended for Tulane, as universal legatee, to use the balance of her estate to maintain a women’s higher education college.”)
Because of the apparent inconsistency in the judge’s finding and her denial of the injunction, plaintiffs appealed to the Louisiana 4th Circuit. In the appellate court, the two-judge majority ruled, in effect, that after a donor to a charitable organization passes away, the organization receiving the donation is no longer bound to abide by the terms of the gift.
However, in a strong dissenting opinion, Judge Max Tobias wrote, inter alia, “In Louisiana, the intention of the donor …is the single most important guideline in the interpretation of a document making the donation, and when ascertained, must be enforced [by the courts], when not violative of law.”
On July 1, 2008, the Louisiana Supreme Court ruled that “Louisiana law grants a would-be heir or legatee standing to enforce a condition of a donation.” This ruling led to the filing of Montgomery v. Tulane.
What are the broader implications of the lawsuits?
The issue of donor intent is a critical one for charities and nonprofit organizations that rely heavily on donors’ generosity for support. Increasingly, it is also of critical interest to donors. A recent Zogby poll surveyed Americans’ opinions regarding educational institutions and other charities that accept donors’ gifts but fail to honor the donors’ intended uses. The overwhelming majority responded negatively to institutions that fail to honor donors’ intent. Most respondents said they would stop donating to organizations that ignored donors’ wishes. http://washingtontimes.com/national/20051213-111244-7770r.htm.
Universities depend on donors for financial support. Donors who leave considerable sums to universities often do so with the understanding that the schools will use the money for stated purposes, as Mrs. Newcomb did. When accepting such a gift, a university has a responsibility to honor that gift by using it as the donor intended, as long as that is possible. If donors lose confidence that their wishes will be respected, major gifts that support schools (including Tulane University), hospitals, and other vital institutions will dry up.
The Newcomb action is one of several high-profile cases being litigated at this time on the issue of donor’s intent. See the article from Pasadena News, below.
Who is paying plaintiff’s costs of the lawsuit?
The Future of Newcomb College, Inc., funded by contributions from its supporters, is providing financial support for the plaintiff’s action to restore Newcomb College. TFoNC is a 501(c)3 non-profit organization, and contributions to it are fully deductible to the extent allowed by law.
What can supporters of Newcomb College do to help?
You can help by donating to fund the lawsuits and by circulating correct information to all interested friends and acquaintances. The Website of The Future of Newcomb College, Inc, http://www.newcomblives.com, is the best source of current information. You can also go there to make a donation electronically, or you can send a check to The Future of Newcomb College, Inc., c/o Paige Gold, 3909 Rust Hill Place, Fairfax, VA 22030.
Link
Public confidence in nonprofits eroding
By William Robertson
AMERICANS are beginning to question whether charities can be trusted with their money.
A recent “DonorPulse” poll, conducted by Harris Interactive, found that only one in 10 Americans strongly believes that charities are “honest and ethical” in their use of donated funds, while nearly one in three believes nonprofits have “pretty seriously gotten off in the wrong direction.”
This could have a grave impact on America’s $250 billion-a-year nonprofit sector, and the thousands of institutions and individuals who depend on the public’s continuing generosity.
While there may be many reasons for this growing crisis in confidence, there is one reason with which I am intimately familiar: Some nonprofit organizations can’t be trusted to use the contributions they receive for the purposes for which they are given.
My sisters and I are involved in an unfortunate dispute involving this issue, which is now making its way through the legal system. With $750 million or more hanging in the balance, the case is believed to be the largest donor-intent lawsuit in U.S. history.
The defendant in our case is Princeton University. Princeton, we believe, has egregiously ignored the wishes of our parents, who in 1961 donated 700,000 shares of A&P stock, valued at the time at $35 million, to establish a foundation to benefit our country.
The sole mission of the Robertson Foundation is to help the U.S. government “increase its ability and determination to defend and extend freedom throughout the world” by preparing talented Princeton graduate students for government careers in international relations and foreign affairs.
Since 1961, Princeton has spent more than $300 million of the foundation’s money. But steering program graduates into the Foreign Service and other foreign-policy careers in government has never been a high priority at my alma mater. Instead, an analysis by PricewaterhouseCoopers indicates the university misspent $207 million, diverting funds to other departments, programs and activities. So we are seeking to remove Princeton’s control of the foundation and its endowment so the foundation can pursue its mission with institutions that care.
Our experience is not unique. Just weeks ago, for example, the descendants of Josephine Louise Newcomb filed suit in Louisiana to block an attempt by Tulane University to dissolve Newcomb College, the women’s liberal arts college affiliated with Tulane. Newcomb donated $100,000 in 1886 (about $2million in current dollars) to establish H. Sophie Newcomb Memorial College, named in memory of her daughter.
She later left the college her entire $2million estate (worth about $46 million in today’s dollars). As attorneys for the family declared, “The conditions she put on her donation were crystal clear.” The money was for Newcomb College.
Other cases abound, too numerous to detail. The one common thread: Money is donated for a specific purpose but not used for that purpose.
If the intention of donors continues to be ignored or evaded, confidence in U.S. charities will continue to erode. The consequence could be tragic.
Though state and federal courts have been wrestling with charitable trust issues for some 200 years, the law is clear: A charitable gift made and accepted for one purpose cannot be used for another without the consent of the donor or a decree from an appropriate court.
The unflinching reaffirmation of this by New Jersey’s courts will send a timely signal to nonprofit executives that the acceptance of designated funds - a gift “with strings” - carries with it the obligation to use the money as intended. Nonprofits that trifle with donor restrictions will learn that such behavior will not only threaten their donor base, but will subject them to legal ramifications.
This will send the right signal to all Americans, encouraging them to continue their necessary support of our country’s 1.2 million nonprofits, whose daily good deeds improve the quality of life for millions of our fellow citizens.
William Robertson is the lead plaintiff in a lawsuit seeking to end Princeton’s control of the Robertson Foundation and its endowment.