Princeton University and the heirs of a major donor to the institution have settled their bitter dispute over an endowment that supports the university’s Woodrow Wilson School of Public and International Affairs.
The endowment, known as the Robertson Foundation and worth more than $900-million as of June 30, will be dissolved, and Princeton will retain most of the funds in a new endowment controlled solely by the university. But the university will reimburse the Robertson family’s foundation, the Banbury Fund, for the $40-million it spent on legal fees in the case, and beginning in 2012, the university will transfer $50-million, plus interest, to a new foundation being established by the Robertsons to support the preparation of students for government service.
“This settlement achieves the university’s highest priorities in this lawsuit, which were to ensure that Marie Robertson’s gift will continue to support the graduate program of the Woodrow Wilson School and that the university would have full authority to make academic judgments about how these funds are to be used,” said Shirley M. Tilghman, Princeton’s president.
The lawsuit had been scheduled to go to trial in January, following a series of rulings last year by a New Jersey judge that did not hint at whether Princeton or the Robertson family was likely to prevail. Ron Malone, a lawyer for the family, said the heirs feared that even if they had won in court, Princeton would have pursued appeals for years.
“Princeton has a 1,000-year view of the world,” he said. “The family was facing spending the rest of their lives litigating against Princeton and using up all the Banbury dollars to do that. Both sides decided that a compromise was in their best interests.”
The lawsuit has been perhaps the most closely watched case ever over how precisely nonprofit institutions must adhere to a donor’s wishes. The Robertsons, heirs of the A&P supermarket fortune, sued the university in 2002, saying that Princeton had not followed the terms of the gift their parents made in 1961 to establish the Robertson Foundation.
The heirs maintained that Princeton had never been serious about fulfilling their parents’ primary goal — preparing graduates of the Wilson school for service in the federal government, particularly in foreign relations. Princeton argued that its spending had been appropriate, and that it had used the Robertson money to build one of the most highly regarded schools in the country for preparing students for government and public-policy work.
Both parties are filing papers today with a New Jersey Superior Court judge, Maria Sypek, asking for the settlement to be approved. —Ben Gose
Update (12/11): For more on the settlement, see “Princeton to Pay $90-Million to Settle Dispute With Donors’ Heirs” and “What Colleges Can Learn From ‘Robertson v. Princeton.’”