Princeton University Vs. Robertson Family

Princeton University vs. Robertson Family

Contributions are a major source of support for many private not-for-profits. FASB SFAS 116 defines contributions as unconditional transfers of cash or other resources to an entity in a voluntary nonreciprocal transaction. Some contributions are considered restricted contributions. Restricted contributions specify how the contributions are expected to be used and are recognized as increases in either temporarily restricted assets or permanently restricted net assets when the promise is received. In the case of the Robertson Family vs. Princeton University, Princeton University is being sued for misuse of donations made by the Robertson family.

In 1961, Marie Robertson, wife of Charles Robertson, Princeton Class of 1926, made a donation to Princeton in the form of $35 million of shares in The Great Atlantic and Pacific Tea company to expand and support the graduate program at the Woodrow Wilson School of Public and International Affairs. The donation incorporated a private charitable foundation called the Robertson Foundation. The purpose of the foundation is to “stengthen the Government of the United States and increase the ability and determination to defend and extend freedom throughout the world by improving the facilities for the training and education of men and women for governmnet service.”

The lawsuit was originally filed on July 17, 2002 in the Superior Court of New Jersey, Chancery Division, Mercer Country (Trenton.). It was filed by the descendants of Charles and Marie Robertson; William Robertson, Katherine Ernst, Robert Halligan and Anne Meier.The defendants in the case are President Tilghman, current trustees Wendell and Oxman, and former trustee John J.F. Sherrerd, and Princeton University.

The original complaint charged Princeton University for having violated the expressed agreement of donors Charles and Marie Robertson, by failing to honor the Robertson Foundation mission, and by using Robertson Foundation funds for projects unrelated to the previously stated goal. A successive modified complaint was then filed on November 12, 2004 in New Jersey Superior Court. The plaintiffs extended their charges, claiming that Princeton has wrongfully spent more than $100 million of the Robertson Foundation’s money on programs, projects, bonuses, buildings, equipment, and overhead costs that have nothing to do with the Robertson Foundation mission. Other charges are Princeton engaged in a fraudulent cover-up scheme, involving several Princeton administrations, to hide the improper spending, and also misused other donors’ gifts from their intended purpose.

The major issues involved in the case are donor intent but also the right of the donor to take back their donation. Donor intent is defined as the donor’s expected outcome in making a contribution. The donor generally has expectations about that gift’s use and impact when making the contribution. The case accused Princeton for intentionally violating the donors’ intent. The Robertson family wants to redirect funds to other universities that could fulfill the donors’ goals. However, in this case Princeton is not a private foundation, but a Type 1