The close relationship between supporting organizations and their chosen charities can raise
serious concerns about what recourse a donor has if his supported nonprofit does
not honor his wishes. In 2002, the $650 million Robertson Foundation filed a
lawsuit, which is still pending, against Princeton University’s Woodrow Wilson
School of Public and International Affairs. The children of Charles and Marie
Robertson, who started the foundation in 1961 as a supporting organization for
Princeton, claim the university is not using the money in accordance with their
parents’ wish to help graduate students enter diplomatic careers.
Experts suggest that one way to avoid this type of dispute is
to form a supporting organization with a plan to limit its lifespan or to
structure the organization to be more selective. A Type III supporting
organization (see "Supporting Cast") that sustains multiple charities
can stop giving money to any of them, so long as it continues giving money to at
least one. (Technically, a Type III organization can support an unlimited number
of charities, although most support no more than a handful. The Senate reform
package would limit the number to five.) As with any supporting organization,
the board must vote to sever the relationship. But the catch is that at least
part of the supporting organization’s board must be comprised of individuals
from the supported charity.
In practice, however, donors hold a great deal of influence over their
boards. Donors frequently dilute the power of their chosen charities by
supporting several organizations and giving each just one board seat. When a
controversial vote arises, few charities will vote against their benefactors.
"Boards of supporting organizations will recognize whose money created the
supporting organization," says Janne Gallagher, general counsel of the Council
on Foundations in Washington, D.C.  Back to Main Article: Philanthropy's Hybrid Creature
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