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SPOTLIGHT REPORT | CHARITY BEGINS AT HOME

Charity in Worcester an insiders' game

WORCESTER -- When the Boys & Girls Club of Worcester hatched an ambitious plan for a new $7.5 million clubhouse, its fund-raisers made a beeline for the venerable law firm of Fletcher, Tilton & Whipple. Their question to partner Sumner B. Tilton Jr.: How much support could he drum up from the private family foundations his firm oversees?

Quite a lot, as it happens.

Tilton, recalling the encounter, says he did some quick figuring on the back of an envelope and said he could promise about $2 million from the charitable fortunes of well-known Worcester families like the Aldens and Stoddards, the Higgins and Harringtons.

But that wasn't enough to get the project launched. So Tilton, who learned to swim at the old Boys Club, called a breakfast meeting of the city's major foundation chiefs at the private Worcester Club early in 2002. It worked. The foundations have now pledged $3.5 million toward the clubhouse.

"This is a small town," Tilton said in an interview at his office. "A lot of people looking for money end up at our doorstep." The firm, as he put it, "is foundation central."

Indeed, Fletcher, Tilton & Whipple serves as gatekeeper to the nine largest private family foundations in Worcester, with a combined $280 million in wealth earmarked for good works. The firm, which has advised local business leaders and their families since 1822, earns $600,000 a year in fees from those clients. And it has extraordinary control over who gets charitable funds -- and who doesn't -- in New England's third-largest city.

Philanthropy is managed by a tight circle of insiders in Worcester. Institutions that have benefited most from those relationships include the Worcester Art Museum, Clark University, the grand music venue Mechanics Hall, the YMCA, and the Bancroft School, among others. What they all have in common, Tilton said, is cultural or social prominence.

But, perhaps as significant, each also has a personal or boardroom connection to Fletcher, Tilton & Whipple. Take, for instance, the art museum. Its president from 1999 through 2002 was one of its long-time trustees, Warner S. Fletcher. The museum doubled up its ties to Fletcher's firm by naming Sumner Tilton cochairman of its recently concluded $35.5 million fund drive. From 1998 through 2002, the major foundations administered by the law firm contributed more than $3.7 million to the museum.

"Did they give more than they would have because of my role? Yes," said Tilton, 65, who is known to friends as "Tony." Asked why the museum had selected him to help lead the campaign, he replied, "They probably asked me to do that because of my role with the foundations."

Tilton and his colleagues have many more open admirers than critics in Worcester, despite their near monopoly on the business of advising wealthy families on how to manage their money and whom to give it to. That's partly because they seem born to the role: Fletcher, 58, is part of the Stoddard family, whose $63 million foundation is handled by the firm. And both lawyers are sons of earlier partners in the firm. When it came to Worcester philanthropy in his day, Fletcher's father, Paris, liked to say, "All roads lead to Paris."

Nonprofit executives and other lawyers also say Fletcher, Tilton has played a critical part in sustaining the vibrancy of Worcester's nonprofit sector.

"We're very lucky," said Erwin H. Miller, a partner at the law firm Bowditch & Dewey, who is helping the Boys & Girls Club raise money. "They are a major source of support for our social service, artistic, and cultural institutions."

But specialists in corporate governance point out that such close connections between givers and their beneficiaries have the potential to breed conflicts of interest. Jay Lorsch, a professor at Harvard Business School who is considered an authority on the responsibilities of directors and trustees, suggested that foundations be required to include on their boards trustees without connections to the source of a foundation's money. He also said trustees should be independent of the groups to which they award grants.

"They've got to live by some kind of standards which are reasonable in terms of their mission, and the benefits that they have because of their tax-free status," Lorsch said.

The head of a small Worcester agency that helps people with AIDS has expressed frustration that, lacking connections to Fletcher, Tilton lawyers, the doors to the city's foundations were closed to it. Another nonprofit leader, Alicia Lenahan of the CASA Project, which provides services for neglected children, said she was grateful to receive small but regular $10,000 checks from a few foundations overseen by the firm.

Tilton concedes that health and human-service groups have often come up short. Family foundations tend to fund capital projects and well-known institutions over social programs, he said. Even getting a hearing with Tilton for such efforts can be difficult, he admits. It took special introductions and a tireless effort by Maurice J. Boisvert to get his adolescent services group, Youth Opportunities Upheld Inc., in front of the foundations.

"I don't travel in those circles," Boisvert said. But Y.O.U has received more than $500,000 from the foundations in five years, Tilton said, because, "Moe Boisvert makes it a point to know everybody."

Massachusetts Attorney General Thomas F. Reilly, whose office oversees foundations and charities in the state, has outlined a conflict-of-interest requirement for such organizations -- a requirement that, the Globe has found, is ignored by many foundations. Reilly, acting in the case of the Yawkey Foundation, whose assets came from the sale of the Red Sox, required that Yawkey trustees refrain from making grants to pet charities. He said trustees should leave the room during votes on grant proposals for nonprofits on whose boards they serve.

Yet such conflicts seem to define the way philanthropic business gets done in Worcester. The Bancroft School, a prestigious private school where many of the city's elite are educated -- including Fletcher himself and Tilton's children -- is among the top 10 recipients of money from foundations run by the Fletcher, Tilton firm, reaping more than $1 million over the past five years. UMass Memorial Health Care, the state's second-largest health system, also attracts hundreds of thousands of dollars from the local foundations.

When the Massachusetts College of Pharmacy and Health Sciences set out to build a Worcester campus, its president, Charles F. Monahan, Jr., sold the idea to Tilton over breakfast. As a result, the foundations directed by the firm gave nearly $1 million. The school is now located just a couple of blocks from the Main Street office of the law firm.

Just down the street, at Clark University, bonds with the law firm have proved even more fruitful. Tilton served as chairman of the school's board from 1986 to 1992 and is the only "life trustee" on the board. He helped Clark raise $57 million during his tenure, with support from the foundations. There's a function room named for him on campus: Tilton Hall.

"I think the development office at Clark looks upon Tony Tilton as someone who opens doors, and keeps connections with the Worcester foundations alive," Tilton said. "I think that Clark certainly wants to have a place at the table."

In fact, Clark appears to have a reserved seat. When the university's president, Richard P. Traina, retired in 2000, he moved right into a spot on the board of the George I. Alden Trust, a $135 million foundation that's run out of Fletcher, Tilton's offices and which has been a strong Clark supporter. Traina and three other trustees, including Fletcher and Clark treasurer James E. Collins, each make $123,000 a year for part-time work. Together, the Alden Trust and the other foundations controlled by the firm have contributed $1.7 million to Clark in the last five years. Some of that money is earmarked for the new Traina Center for the Arts.

Tilton downplays the long list of interlocking relationships.

"This is a small enough town that, by definition, some of the people at the foundations are going to serve on the boards of the groups being funded," he said. At the Alden Trust, he said, trustees "do recuse themselves, I think," from voting on grants to nonprofits they are involved in. But the firm has no clear policy. Making such gifts, Tilton said, "has never seemed to be so much a conflict as a way to find out more about the organization." Traina, in a brief interview, dismissed the conflict question, saying the Alden trust gives more money to Worcester Polytechnic Institute and to Worcester Vocational High School than to Clark.

The trust was established by George Alden, a Norton Co. engineer and the founder of WPI. In his will, he said wanted his money to benefit WPI and to support educational institutions, "with a preference for industrial, vocational, or professional education."

Tilton makes no apologies for his firm's efforts to bolster the major cultural and educational institutions that he believes the city's industrial giants -- the founders of Wyman-Gordon, the Norton Co., and the Paul Revere Life Insurance Co. -- would have liked to see thrive.

"We talk about this a lot," Tilton said. "How do we keep the money that drives Worcester's cultural engine here? We're the stewards of that money."

Ann T. Lisi, executive director of a different kind of grantmaking group, the Greater Worcester Community Foundation, said her operation is careful to avoid the sort of overlapping interests the Globe found in the city's private foundations. But she defended the local funders, several of whom contribute to the community foundation, saying, "You want involved people to be decision makers."

And, she added, "In Worcester, it works."

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