Donor Intent Watch: Need-to-Know Legislation and Litigation

In May, following the passage of the Donor Intent Protection Act in Kansas, Philanthropy Roundtable launched a monthly series on donor intent controversies around the country to better inform those who care about this important topic.  In this edition of our Donor Intent Watch, we are focusing again on a higher education dispute, this one at the University of Richmond. We’re also providing an update on proposed donor intent legislation in Ohio, and a summary of recent communication with a donor whose story we told first in 2020. For additional resources on donor intent, please visit the Roundtable’s Donor Intent Hub. 

University of Richmond 

At the University of Richmond, the dispute involves an 1890 donation from the family of Thomas C. Williams Sr., an alumnus, benefactor and trustee who had died the previous year. The gift supported an endowment for the law school which had been founded in 1870 as part of the then-named Richmond College and to which Williams had been a significant donor. In 1920, the entire institution was renamed the University of Richmond and the law school was renamed the T. C. Williams School of Law. Over a century later, in the fall of 2022, T. C. Williams’s name was removed because the university discovered he owned enslaved people. The policy, cited by the University of Richmond to justify its action, had been adopted by its trustees earlier that year.  

Now Williams’s descendants are asking the University of Richmond to refund the 1890 donation, estimated in today’s value with interest at $51 million. Robert Smith, Williams’s great-great-grandson (and alumnus of the law school in question), has even suggested the university should return all the money donated by his family – some $3.4 billion in present value. At no time has the family contested the claim that Williams was a slaveholder, nor is there any written document that directly connects the naming of the law school to a specific donation. Nevertheless, Smith, who says the honor of his family has been “insulted,” is attacking the university’s “present mindedness” by using a policy enacted in 2022 to alter the terms of a gift accepted without concern over 100 years earlier.  

If, as reported, school officials informed this family of longstanding donors about the “denaming” by phone, they certainly displayed poor judgment and stewardship. But it is difficult to see how the family has any legal recourse. The University of Richmond has produced public documents that back its claims about slaveholding and the law school was not the only part of the institution affected by its new guidelines. Six campus buildings also lost their original names in 2022. As charitable institutions increasingly probe their donors’ long histories — and our nation’s history as well — decisions around maintaining or obliterating naming decisions made in the past remain unsettled and highly controversial. 

Ohio Senate Bill 83 

We have reported since 2021 on proposed legislation in Ohio to protect donor intent. The impetus for this legislation was a dispute between the Moritz family and The Ohio State University involving violation of donor intent (detailed here). In a subsequent blog, we noted that an education bill containing donor intent protection language had passed the state’s legislature only after that language had been removed. Now another education bill amended to include such language has passed the Ohio State Senate. The protection offered by the bill covers only endowment agreements between donors and state institutions of higher education, but it would be a promising start to ensuring that donors whose gift restrictions are violated can obtain some legal recourse. The outlook for the companion bill in the Ohio House is unclear, however, as its higher education provisions are controversial, and the inclusion of the donor intent protection amendment is not guaranteed. We will be monitoring the bill as the House begins its consideration.  

Revisiting a Dispute at St. John’s University, Minnesota 

In our guidebook, “Protecting Your Legacy,” we told the story of litigation engaged in by Roger Lindmark against his alma mater, St. John’s University, in 2018. Lindmark demanded a return of his $300,000 gift creating a summer research scholarship endowment. The program provided financial support for rising seniors to complete a substantive research paper on corporate-business ethics. The students would live on campus during the summer and receive a $7,000 stipend for their research.  

Yet for nearly a decade, Lindmark complained, he had received neither regular reports nor copies of the students’ work, and he had assumed the program was operating according to his wishes. When he asked for 16 completed research papers in 2017, however, he was shocked to see that most of the papers fell outside the scope of his intended topic. In one case, a selected student submitted a five-page paper explaining why he couldn’t complete the assignment and describing how he had enjoyed the summer reading many books. He was paid the $7,000 stipend despite his failure to comply with both the terms of the endowment and his own agreement with the university. 

Lindmark lost his case when the Minnesota Court of Appeals ruled the endowment was an irrevocable gift under Minnesota law, and only the state’s attorney general had standing to litigate the endowment. Following that decision, Lindmark wrote Attorney General Keith Ellison several letters urging him to enforce the endowment terms. He received no response.  

This spring, Lindmark was surprised by a report from St. John’s University explaining how the scholarship program was promoted, how many applications had been received and what topics had been chosen by the two students selected for the scholarship. The report also said the value of the Lindmark Endowment for Corporate-Business Ethics students totaled $537,744 at the end of 2022.   

Nonetheless, Lindmark remains skeptical about supporting colleges and universities, warning, “A donor who chooses to give money to his or her alma mater should draw up a legally binding contract with the institution that includes a reversion clause and possibly even a provision for liquidated damages for breach by the school. That will guarantee compliance with the donor’s wishes.”