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SPOTLIGHT REPORT | CHARITY BEGINS AT HOME

Costly furnishings come at charities' expense

Their mission statements read like calls to action, promises to help society's most vulnerable people and important causes: uninsured children and the elderly poor, global warming, and world hunger.

But at some private foundations, the list of big-ticket goods that grace the halls, desks, and driveways of top executives reads more like a script from ``Lifestyles of the Rich and Famous.''

A 2000 Jaguar and a top-of-the-line Audi. Persian rugs and custom cabinets. Four lamps totaling $5,200. A chair valued at $2,600. And tens of thousands of dollars spent on trees and shrubs at a foundation that spent $980,000 more on salaries and expenses than it gave to charity in 2001, according to its tax returns.

At foundations across the country, millions of dollars that could be given to charitable causes are instead being spent on creature comforts for the givers themselves.

One foundation where money seems no object is the Commonwealth Fund, a $533 million New York foundation with Boston ties: Its board includes former Partners HealthCare System president Dr. Samuel O. Thier, who serves as chairman, and Robert C. Pozen, Governor Mitt Romney's secretary of economic affairs.

The foundation has its offices in the Harkness House, a landmark townhouse on 5th Avenue's ``Museum Mile'' that is costly to maintain and furnished in style: Foundation tax returns list expenses including $15,000 for front hall carpets, $11,800 for planter boxes, $5,845 for window sashes, a $3,365 cabinet, a $1,990 oil painting, a $1,100 office mirror, and a $1,920 planter (a replica of a marble planter original to the house) that holds plastic flowers.

The Commonwealth Fund's executive vice president and treasurer, John E. Craig Jr., said the expenses were justified and did not take away from the foundation's mission. It spent $12 million to give away $18.5 million last year to support health care for the uninsured. ``We try not to overdo it, but try to create an environment that people feel comfortable in and feel dignified,'' he said.

At the $494 million Smith Richardson Foundation, one of Connecticut's largest private foundations, three top officers are provided with vehicles of their choice, for business and personal use.

For program director Marin J. Strmecki, it is an Audi station wagon, for vice president Robert L. Coble a Jeep Cherokee, each costing about $36,000. President Peter L. Richardson scored a $62,985 Audi A8 luxury sedan, the second Audi given him by the foundation. The cars were perks on top of the officers' annual salaries. Strmecki and Coble are paid roughly $225,000 each. Richardson makes $364,000.

In an interview, Richardson said he could not recall how the cars were approved by the foundation, which funds public policy research. Of his Audi, Richardson said, ``I wanted to get a safe sedan.''

Smith Richardson also spent $6,700 for a portrait of a family benefactor, $2,600 on a chair, and bought four lamps at $1,300 a piece.

Specialists say such expenses strain the mandate for charity that lies at the core of every foundation.

``As a foundation, why do you need anything more than a place to do business, furniture to sit in, phone systems, computers, and software?'' said Thomas A. McLaughlin, a nonprofits consultant in the Boston office of Grant Thornton, an accounting firm. ``What else do you really need to give away money?''

But at some foundations, the cost of perks and office decor exceeded grants to some charities. At the $548 million Wayne & Gladys Valley Foundation, one of the 15 largest private foundations in California, $60,000 was spent on two cars for executives and $40,000 on wall hangings. That was more than the combined grants given to a domestic violence program, a food bank, and a low-income scholarship fund in 2001.

Richard Kingsland, the foundation's financial officer, refused to say what kind of cars the foundation purchased; he said the wall hangings included oil paintings and photographs. In sum, the foundation spent $3.7 million to give away $15 million in 2001.

Larger foundations have more money to spend, but they aren't the only ones with a taste for costly items. The $55 million M. R. & Evelyn Hudson Foundation in Texas poured large sums into improving its own surroundings. After buying a 12-acre property near Fort Worth for $1.8 million, the foundation, which supports a variety of causes, spent $30,000 on more than 120 trees, shrubs, and other landscaping.

Said Marshell Larson, the foundation's president-secretary, ``When you buy a piece of property, sometimes you put trees in so you can have privacy.''

And at the Kerr Foundation, in Oklahoma, luxury items were also deemed appropriate. Along with four Persian rugs totaling $24,000, a $15,000 conference table and chairs, and $15,000 in custom cabinets, the foundation paid $44,000 for a Jaguar. Expenses at the $28 million foundation dwarf the grants it provides: In 2001, the foundation spent two dollars on salaries and expenses for every dollar donated to education, health care, and the arts.

When asked if the Jaguar was an extravagance, chairman Robert S. Kerr Jr. said, ``Obviously, we don't think so.''

Francie Latour can be reached at flatour@globe.com

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Spotlight Report The Boston Globe Spotlight Team would like to hear from readers who have information about this issue. The Spotlight telephone number is 617-929- 3208.

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Foundation tax returns are available for public viewing at www.guidestar.org
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