Donor’s lament

My alma mater has a problem, which could be coming to an alma mater near you. The latest chapter in the 120-year history of H. Sophie Newcomb Memorial College has all the earmarks of a scandal that could happen anywhere. All it takes is a crisis or the passage of time — and opportunists.

The crisis in this case? Hurricane Katrina. The opportunists? The administrators of Tulane University, whose president — Scott Cowen —used the apt quip, “a crisis is a terrible thing to waste,” when talking to the media about his post-Katrina changes for the school.

Judging by Tulane’s recent censuring by the American Association of University Professors, Tulane’s victims appear to be numerous.

Perhaps the most injured victim of all, however, is Josephine Louise LeMonnier Newcomb, a grieving mother, who more than a century ago donated more than $3.6 million to Tulane — in excess of $75 million in 2007 dollars — to establish and maintain a women’s arts-and-sciences college at the university. The H. Sophie Newcomb Memorial College, as it was called, was a tribute to her beloved daughter, who tragically died at age 15.

But trust and honor — implicit in this gift — no longer reign at Tulane. Emboldened by the Katrina crisis, the university’s administration pulled the plug on Newcomb last year and diverted its $45 million endowment.

You don’t have to care about Newcomb College to care about what’s happening here. Under different circumstances, the victim could be you or a loved one who trustingly donates funds to a college or another nonprofit institution for a specific purpose, only to have the intent of the gift ignored or unreasonably diluted.

The principle involved here, which lies at the heart of America’s generous soul, is “donor intent.” What it means is this: When someone gives money to a charitable organization for a specific purpose, and the organization accepts the gift, it has an obligation to use the money as the donor intended. If the organization feels it can’t abide by the terms of the gift, it can return the money, ask the donor (or, in this case, the donor’s descendants) for permission to “repurpose” the gift, or ask the courts for permission to divert the money to other uses. No such effort was made by Tulane.

Instead, the university unilaterally decided to ignore the donor’s intent. Tulane simply eliminated Newcomb College and grabbed its endowment. And if the Newcomb family’s descendants didn’t like it — and they didn’t — too bad.

Today, an estimated 1.4 million nonprofit organizations are incorporated in America. And while most do good, they also do well, receiving more than $295 billion last year in donations, according to just-released figures from the Giving USA Foundation.

However, some nonprofits are not behaving. In recent years, several high profile disputes — some resulting in lawsuits —have called into question the stewardship practices of several major nonprofits, including the American Red Cross, New York Metropolitan Opera, and Princeton University — which has been accused of diverting some $200 million from a charitable foundation set up to train students for government diplomatic careers.

Add Tulane to the list of institutions whose actions are threatening to further undermine the public’s confidence in the nonprofit sector.

As billionaire philanthropist Warren Buffett was quoted as saying in a Fortune magazine story this spring: “when people see donor intent get ignored or twisted, it has to discourage philanthropy.” And without philanthropy, America wouldn’t be America.

Tulane admits there was no financial need to close Newcomb, which had a healthy enrollment of more than 2,000 students. Josephine Louise Newcomb’s descendents have petitioned the courts to stop the improper actions. And an organization of supporters, which I have helped organize, supports their efforts with weapons of our own: honor, ethics and truth.

The truth is that Mrs. Newcomb’s fortune was donated in good faith for an honorable purpose that is as valid today as it was in 1886, when she gave her initial gift. If the Tulane administration doesn’t see that, we can only hope the courts will.

Renee F. Seblatnigg, a Newcomb College alumna, is president of the Future of Newcomb College, Inc. (www.newcomblives.com), an organization working to save Newcomb College. Readers can contact her by e-mailing hsophie@newcomblives.com.

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