About the Lawsuit

Originally filed on July 17, 2002 in the Superior Court of New Jersey, Chancery Division, Mercer County (Trenton), Robertson v. Princeton University is perhaps the most important “donor intent” lawsuit in U.S. history.

The lawsuit was filed by the descendants of Charles and Marie Robertson and all of the Family-Designated Trustees of the Robertson Foundation, a charitable foundation whose mission is to assist the United States Government by preparing graduate students for federal government careers, particularly in foreign and international affairs. The defendants in the case are Princeton University and the University-Designated Trustees of the Robertson Foundation.

In the original complaint, the plaintiffs charged that the University-Designated Trustees of the Robertson Foundation – and through them Princeton University – have:

• Ignored the intent of donors Charles and Marie Robertson, by failing to honor the Robertson Foundation's mission.
• Ignored the intent of donors Charles and Marie Robertson by secretly using Robertson Foundation funds for projects unrelated to the aforementioned goal.
• Ignored the intent of donors Charles and Marie Robertson by taking over control of the Robertson Foundation endowment, thereby effectively commingling Robertson Foundation assets with those of the University, and again violating their expess agreement with the donors.

In a subsequent amended complaint, filed in New Jersey Superior Court on November 12, 2004, the plaintiffs expanded their charges, alleging that Princeton has:

• Wrongfully spent more than $100 million of the Robertson Foundation’s money on programs, projects, salaries, bonuses, buildings, equipment and “overhead” costs that have little or nothing to do with the Robertson Foundation mission.
• Engaged in an fraudulent cover-up scheme, involving several Princeton administrations, to hide the improper spending.
• Similarly misused other donors’ gifts in what appears to be a systemic university-wide “pattern and practice of diverting [donations] from their intended purpose.”

In January 2006, the estimate of more than $100 million in improper spending was more than doubled, to more than $207 million (nearly $500 million in 2006 dollars).

The Robertson Family Trustees have asked the Court to: 1) Amend the Robertson Foundation’s Certificate of Incorporation and By-Laws “so that [the Foundation] will no longer be controlled by Princeton, but will instead be a private foundation with all of its trustees appointed by the Robertson Family and all of its assets dedicated to graduate training for government service, particularly for federal government careers in international affairs.” 2) Reverse the university’s improper takeover of the Robertson Foundation’s investment portfolio. 3) Require Princeton to “account for all of its expenditures of Foundation funds so that the Court can determine whether such expenditures are consistent with the terms of the restricted gift” and order Princeton to reimburse the Robertson Foundation “for all improper expenditures,” an amount estimated at nearly $500 million in 2006 dollars.

The outcome of the lawsuit will have a significant impact on both higher education and philanthropy in America. If the Robertson family wins the lawsuit, it will underscore in a public and powerful way the centuries’ old and universal legal and moral principle that all charitable donations, when given and accepted for a specific purpose, may be used only for that purpose. It also will serve as a powerful reminder that all nonprofits will be held accountable in law courts and in the court of public opinion if they play fast and loose with donor restrictions.