Donors: You Can’t Live With Them, You Can’t Live Without Them

Two recent lawsuits involving multi-million donations and donor demands for their return highlight the difficulty charities face when large donors become upset with how their donations allegedly have, or have not, been spent.

As reported by the Boston Globe, one lawsuit has been brought by an alum of the College of Holy Cross, who pledged $25 million for a performing arts center (named after the donor and pictured here) but now wants $18 million back plus another $3 million he donated for new athletic facilities. He accuses the College of refusing to account for the use of the donated funds. In response, the College has asserted that the donor reneged on the remaining $7 million he pledged for the center in a 2014 written agreement. A federal magistrate judge is now considering whether to compel mediation and arbitration, which the college asserts are required under the agreement.  The case is Prior, Jr. v. Trustees of the College of the Holy Cross.  (Full disclosure: My former colleague, Vincent Rougeau, is the current President of Holly Cross College..) Additional coverage: Inside Higher Ed.

As reported by the Gothamist and previously blogged about in this space (with a link to the complaint), the other lawsuit has been brought by the Stella and Charles Guttman Foundation against City University of New York (CUNY) relating to a $25 million donation made more than 10 years ago. The Foundation alleges that CUNY failed to fulfill a commitment to build a new campus for CUNY’s New Community College in Midtown, now named the Stella and Charles Guttman Community College. The Foundation is asking for $15 million that was committed to an endowment to benefit the new campus, plus interest, for a total of $21 million.

Lloyd Mayer