Tag: Ivy League

Several years before his death in 2002, at age 88, Robert T. Keeler drew up a will to make his intentions clear. His wife and family were his primary beneficiaries. Also on the list were his secretary and housekeeper, a church, seminary, and medical center, and Dartmouth College, his alma mater.

Keeler didn’t name a dollar amount for Dartmouth, choosing instead to leave a percentage of his estate, but he did specify how he wanted the money used: for the “sole purpose of upgrading and maintaining its golf course.” When Dartmouth asked for the flexibility to use the money for other purposes, the family said no.

Per their 2005 “statement of understanding,” the college was to send any money it didn’t need to maintain the course to the Robert T. Keeler charitable foundation, a nonprofit that supports children in need. That hasn’t happened. The college closed the Hanover Country Club in 2020, citing financial concerns, and has refused the foundation’s request to return the approximately $3.8 million that remains.

Dartmouth has also fought the foundation and estate’s request to be allowed to make their objections to a court. They’ve so far been denied.

The disagreement has triggered a 2½-year legal dispute between Dartmouth, Keeler’s estate and foundation, and the Attorney General’s Charitable Trusts Unit, which is charged with protecting donors’ intentions.

It has also illustrated the limits of donors’ ability to control their charitable intentions, even when they spell out restrictions, as Keeler did.

With the blessing of the Attorney General’s Charitable Trusts Unit, a circuit court judge ruled in February that Dartmouth can keep the $3.8 million and use it for “golf-related” purposes, such as the study and design of golf practice areas or administrative and equipment costs of the school varsity golf teams.

The case is now before the state Supreme Court. Keeler’s estate and foundation have asked the court to essentially reopen the modification request and give them the right to show why Dartmouth should be forced to return the money.

They believe they can show that Dartmouth didn’t close the golf course for financial reasons, which would meet the legal threshold for repurposing the money, but closed it because it wants to extract more value from the course by erecting housing and academic buildings on the course. The school’s strategic plan identifies the redevelopment of the course as a possibility.

The foundation and estate also argue the Charitable Trusts Unit failed in its obligation to sufficiently investigate Dartmouth’s financial argument.

“If this stands, the idea that when a donor makes a gift with conditions, that those conditions are supposed to be honored, that rule does not exist anymore in New Hampshire,” said attorney John Laboe, who is representing the estate and foundation. Asked how he’d advise clients seeking to protect their intentions, Laboe said, “I would say don’t give them the money.”

Dissecting an agreement

The law allows institutions like Dartmouth to modify how they use gifts in limited circumstances: if the donor agrees or when the gift’s original purpose or restriction becomes unlawful, impracticable, impossible to achieve, or wasteful. However, the institution must still use the gift in a way that honors the donor’s wishes as much as possible, and a court must agree.

In February, Circuit Court Judge Thomas Rappa upheld the Charitable Trusts Unit’s determination that the school had met that legal burden and ruled that Dartmouth could redirect the money to other golf-related expenses. He found too that the unit had been extensively involved in reviewing Dartmouth’s request.

In oral arguments before the state Supreme Court in late March, Dartmouth’s attorney, Ralph Holmes, defended the school’s position that it is not required to return the money. He focused on a phrase in the statement of understanding that states the gift was intended to benefit future generations of Dartmouth students and members of the Dartmouth community. According to the statement of understanding Dartmouth included in a court filing, Keeler wished to support the golf course “so that future generations of Dartmouth students and members of the Dartmouth community may continue to enjoy the great game of golf at the course which he so loved.”

Holmes also told the court that the document does not identify the foundation as a beneficiary, and therefore does not require the money be returned. Holmes said that if Keeler wanted the right to have the money returned to his estate or foundation, that wish should have been included in the agreement.

“If that had been an agreement, it would be in this document, and it’s not there,” Holmes told the justices.

The agreement states that “… any amounts in excess of the amounts the executor determines to be necessary to sufficiently upgrade and adequately maintain the golf course shall be distributed to the Robert T. Keeler Foundation …”

Dartmouth’s legal team referred the Bulletin to Diana Lawrence, Dartmouth’s associate vice president for communications. Lawrence declined to comment while the case is pending.

As close as possible

Diane Quinlan, director of the Charitable Trusts Unit, also declined to comment on the case while it is pending. Assistant Director Michael Haley defended the unit’s handling of Dartmouth’s modification request during oral arguments, saying it has been extensively involved in the case. He also reiterated Holmes’ agreement that nothing in the statement of understanding requires the money be given to Keeler’s foundation.

“Now we have $3.8 million in charitable revenue or charitable assets that cannot be used,” Haley told the justices. “If we go back to the beginning … and they have a whole new hearing, and throw out everything we’ve done so far, that’s going to tie these resources up even further. And that’s certainly not what the intent of the donor was. He wanted these funds to be used for his intended charitable purposes.”

English common law first required attorney general oversight of charitable gifts in 1601, Quinlan said. New Hampshire was the first state to codify that responsibility in law. The Legislature created the Charitable Trusts Unit in 1943.

She said it’s not uncommon for institutions to seek permission to modify restrictions on a gift. She pointed to one involving two scholarship trusts established by Keene residents, one in 1929, the other in 1970.

The first required scholarships be given to male students. The second limited scholarships to male Protestant students. In 1987, the school board sought court permission to broaden the scholarships to all students, citing a fear that its administration of scholarships limited by gender and religion violated the constitutional right to equal protection. A superior court judge agreed.

The Attorney General’s Charitable Trusts Unit appealed the decision to the Supreme Court, arguing that the school board could resolve its concerns by appointing private persons to administer the scholarships. In a 1990 decision, a majority of the justices rejected the state’s argument. Then-Chief Justice David Brock disagreed, writing in his dissent, “for centuries, Americans have rightly believed that they enjoy a legally protected right to choose the objects of their bounty and to bequeath their property by will, as they see fit. Neither our state nor our federal constitution requires this court to write a ‘better’ will for a decedent in terms which reflect the breadth of concern and conception characteristic of a public welfare program.”

In other cases, the Charitable Trusts Unit has opposed a modification request or asked an organization to modify it. About two years ago, Catholic Charities told the unit it wanted to change restrictions on eligibility for the Liberty House, its transitional housing for veterans in Manchester.

The donor who had gifted the property many years ago required that it be available to only Vietnam veterans. As that population dwindled, Catholic Charities wanted court permission to lift the restriction and allow it to welcome all veterans.

Quinlan said her office told the court it would agree, but only if Vietnam veterans were given first preference. The court agreed with the unit’s recommendation, she said.

“The problem, of course, is that when someone gives the gift, and when the charity accepts the gift, they can’t always predict what might happen in the future that might frustrate the purpose of that gift,” she said

In 1928, a woman left $1,000 to provide poor residents in Manchester ice, which was then needed to refrigerate food. The trustees asked a court in 1984 to use the money instead to help needy residents with electric bills. The court agreed.

“It seemed like a good idea at the time,” Quinlan said, “but by 1984 (when the city requested to repurpose the gift), the purpose really became impractical because who, ‘Who had an icebox? Nobody.’”

‘Honorably return the money’

After Keeler graduated from Dartmouth in 1936, he earned a law degree from Yale and joined an Ohio law firm founded by the oldest son of former President William Howard Taft. He partnered with a cousin to develop 7,000 acres into a pulp and paper company that became the main supplier for Time Inc., according to his obituary.

He also continued golfing, up to two years before he died at his home in Vermont.

While an institution must notify the Charitable Trusts Unit that it is requesting court permission to modify a gift, it does not have to tell the donor. In the Dartmouth case, Peter Mithoefer, executor of Keeler’s estate and president and trustee of the foundation, learned the school was closing the golf course from a friend, who’d read about it in a golf magazine.

Mithoefer contacted Dartmouth and asked that the remainder of Keeler’s gift be given to the foundation, as Keeler requested. He said the school’s lawyer declined. In October, Mithoefer put his request to the school in writing.

He called Dartmouth’s decision to modify the terms of Keeler’s gift a betrayal and violation of the agreement. He said he had no doubt Keeler would have opposed any other use of his gift, including “golf-related” expenses. Mithoefer shared that he’d encouraged Keeler to instead leave the school money for scholarships and academics.

“His response was very clear,” Mithoefer wrote. “He was leaving money to maintain the golf course because he felt it would be a great asset for the alumni.” It would keep alumni connected to the school, often a first step in soliciting alumni gifts.

Mithoefer characterized the school’s financial argument for closing the course as misleading. He cited the school’s interest in using the land for student housing. He accused the Charitable Trusts Unit of failing to investigate the school’s real reasons for closing the school.

“I do not begrudge Dartmouth doing what it believes to be in the best interest of the college – expand its physical plant,” Mithoefer wrote, “but it should accept the ramifications of such a decision and honorably return the money given specifically to maintain the 18-hole golf course to the only other beneficiary named in (Keeler’s) will, his foundation.”

Annmarie Timmins is a Senior Reporter for the New Hampshire Bulletin, an independent, nonprofit news organization. This story first appeared in the New Hampshire Bulletin.

[mm-video type=playlist id=01es6rjnsp3c84zkm6 player_id=01evcfxp4q8949fs1e image=]