Posted on February 22, 2012

Johns Hopkins Court Case Raises Questions Over Donor Intent

A recent court case involving Johns Hopkins University and heirs to the estate of Elizabeth Beall Banks is the latest in a series of high-profile disputes over the alleged misuse of millions of dollars in donated funds, the Washington Post reports.

At issue is Banks' 138-acre property Belward Farm, which she sold to the university for $5 million in 1989 on the condition, as outlined in a two-page document, that its use be limited to "agricultural, academic, research and development, delivery of health and medical care and services or related purposes only, which uses may specifically include but not be limited to the development of a research campus in affiliation with one or more of the divisions of the Grantee." A few years later, with Banks' support, the university outlined a plan to build more than a million square feet of low-slung buildings on the property. It later revised its plans to include an almost five-million-square-foot project, which, according to Banks' heirs, runs counter to her wishes for the land.

The case is one of several disputes involving disagreement over a donor's intent in recent years. In 2002, Princeton University was sued by the heirs of A&P grocery chain owners Charles and Marie Robertson for allegedly misusing a $35 million gift it received from the couple in 1961 — a gift whose value had increased to more than $900 million by 2008 — to prepare graduate students for careers in the foreign service. The case was settled in 2008, with Princeton agreeing to pay $40 million in legal fees and $50 million, plus interest, to the family to start a new foundation. The university was able to keep the remaining funds.

While Banks's nephew Tim Newell and his family said they understand it will be difficult to win their case, they hope their story becomes a cautionary tale for other donors interested in supporting educational institutions. "You hate to lose faith in the entire system," Newell told the Post. "All donors have the right to be assured that gifts be used for the reason they were given."