{"id":594,"date":"2026-07-20T04:11:55","date_gmt":"2026-07-20T04:11:55","guid":{"rendered":"https:\/\/prorelocationteam.com\/?p=594"},"modified":"2026-07-20T04:11:55","modified_gmt":"2026-07-20T04:11:55","slug":"foundations-can-outlive-their-charitable-missions-and-thats-a-problem","status":"publish","type":"post","link":"https:\/\/prorelocationteam.com\/?p=594","title":{"rendered":"Foundations can outlive their charitable missions \u2013 and that\u2019s a\u00a0problem"},"content":{"rendered":"
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Bill Gates, Jensen Huang and many of today\u2019s tech titans have two things in common with Gilded Age robber barons like John D. Rockefeller and Andrew Carnegie. After playing a role in propelling the U.S. economy to new heights, they established massive foundations. The foundations are usually designed to last for eternity. Gates is a rare exception in that he decided in 2025 to empty the coffers of his foundation by 2045.<\/p>\n

Read more Why Trump\u2019s move to gut the Endangered Species Act likely won\u2019t hold up in\u00a0court<\/a><\/p>\n

As I have explored in my research about American philanthropy, foundations are typically created and managed so that they might last forever by making sure that their grants and spending equal no more than the growth of their assets over time. <\/p>\n

But I see a big problem with having foundations outlive the donors that endow them with funds in perpetuity. Society\u2019s needs always change, while many foundations\u2019 missions are intended to satisfy a specific need that\u2019s not eternal.<\/p>\n

Milton Hershey<\/h2>\n

Perhaps the best example of this problem is the .<\/p>\n

Milton S. Hershey and his wife, Catherine Elizabeth Sweeney Hershey, established it in 1909, after he made a fortune by mass-marketing chocolate bars and other confections. They endowed the foundation initially with . In 1918, Hershey transferred stock of his chocolate company, valued at US$60 million \u2013 the equivalent of more than $1.3 billion today \u2013 to his foundation for the education and housing of orphans in a boarding school.<\/p>\n

The Hersheys chose this mission at a time when caring for orphans and children in destitute families in institutional settings was still the norm. But by the 1920s, orphanages began to fall out of favor among educators and psychologists.<\/p>\n

As orphanages closed, more orphans and low-income children were entrusted to the care of foster parents in private homes. And the Hersheys\u2019 foundation, which was created in perpetuity, quickly became obsolete. And over time, its purpose repeatedly changed.<\/p>\n

Originally, the school only educated low-income white male orphans. In 1968, it began to admit African American boys. In 1977, girls were allowed. In 1976, new rule revisions made it possible for \u201csocial orphans,\u201d meaning children of single or divorced parents, to be admitted.<\/p>\n

The school also pivoted from preparing students for work in agriculture and trades to college preparation. These changes were guided by a legal doctrine known as cy pres, which requires that any changes to a foundation\u2019s mission have to adhere as closely as possible to the donor\u2019s original intent.<\/p>\n

These changes have helped the school carry on, but they also have kept outlays lower than the budget. As a result, it has more money than it can spend to further its mission. Its endowment had topped $23 billion as of 2024 \u2013 the largest for any K-12 private school in the United States. It\u2019s a curious problem.<\/p>\n

Despite spending about $90,000 on each of its 2,100 students, the foundation still runs an annual surplus of more than $850 million.<\/p>\n

The cy pres doctrine prevents it from redirecting funds to other institutions, such as nearby public schools, or related purposes, such as college scholarships for low-income students.<\/p>\n

More broadly, the application of this legal doctrine is haphazard. In 1963, the Hershey foundation was permitted to spend $50 million on funding a medical school for Penn State University. In 1999, a petition to spend $25 million for the founding of a training facility for teachers who would instruct at-risk children was denied.<\/p>\n

It appears that the Milton Hershey School Foundation is stuck because its mission cannot be adjusted to the needs of society.<\/p>\n