Robert T. Keeler, aged 88 at the time, drafted a will several years before his 2002 death to clarify his intentions. His wife and his family were the primary beneficiaries. His secretary and housekeeper were also on the list, as well as a church and seminary, a medical center and Dartmouth College.
Keeler did not specify a dollar figure for Dartmouth. He chose instead to leave Dartmouth a percentage from his estate. However, he did specify the purpose for which he intended the money to be used. “The sole purpose of upgrading and preserving its golf course”. When Dartmouth requested the flexibility to use it for other purposes the family refused.
According to their “statement” of understanding from 2005, the college agreed to donate any extra money that it did not need to keep the course running to the Robert T. Keeler charity foundation. This nonprofit supports children who are in need. This has not happened. The college shut down the Hanover Country Club by 2020, citing concerns about finances, and refused to give the foundation the remaining $3.8 million.
Dartmouth also refused to allow the foundation and estate to take their complaints to court. So far, they’ve been denied.
A 2 1/2 year legal dispute has been sparked by the disagreement between Dartmouth and Keeler, his estate and foundation and the Attorney General’s Charitable Trusts Unit. The unit is responsible for protecting the donors’ intentions.
Keeler’s example also shows the limitations of donors in controlling their charitable intentions even when they specify restrictions.
A circuit court judge, with the approval of the Attorney General’s Charitable Trusts Unit in February, ruled that Dartmouth could keep the $3.8million and use it to “golf related” purposes such as the design and study of golf practice areas, or the administrative and equipment costs for the school’s varsity golf team.
Now the case is before the Supreme Court of New York. Keeler’s foundation and estate have asked that the court reopen essentially the modification request, and allow them to explain why Dartmouth must return the money.
The group believes they can prove that Dartmouth did not close the golf course because of financial reasons. This would have met the legal threshold to repurpose the money. Instead, it closed it in order to get more value out of the course, by building housing and academic facilities on it. In the school’s strategy plan, redevelopment is identified as a possible option.
The foundation and estate argue that the Charitable trusts unit failed to adequately investigate Dartmouth’s financial argument.
John Laboe is the attorney representing the foundation and estate. Laboe responded that if he were to advise clients who wanted to protect their intentions – “don’t give the money” – he would do so.
Dartmouth is looking at different uses for the golf course that it will close in 2020. These include new housing and academic building. (Screenshot | Beyer Blinder Belle)
An agreement is broken down
Dartmouth can modify the way they use gifts under certain circumstances. This includes when the donor consents, or when the original purpose of the gift or any restrictions become illegal, impracticable or impossible to achieve. The institution must use the gift as closely as possible to the wishes of the donor, but a court must also agree.
Circuit Court Judge Thomas Rappa ruled in February that Dartmouth was allowed to redirect the funds for other golf-related costs. He also found that the unit was heavily involved in Dartmouth’s review.
Ralph Holmes, Dartmouth’s attorney, argued in oral arguments to the State Supreme Court late March that the school is not required by law to return any money. In the agreement, he focused on the phrase that stated the gift would benefit future generations Dartmouth students as well as members of the Dartmouth Community. According to a statement of understanding Dartmouth filed in court, Keeler wanted to support the Dartmouth golf course so that “future generations of Dartmouth members and students can continue to play the game of golf on the course he loved.”
Holmes told the court the agreement does not name the foundation as the beneficiary and does not demand the money to be returned. Holmes stated that Keeler’s wish to return the money to his estate or to his foundation should have been included within the agreement.
Holmes told the court that if there had been a contract, it would have appeared in the document. But it didn’t.
The agreement stipulates that “… all amounts over the amount the executor determines is necessary to adequately upgrade and maintain the golf course will be distributed to Robert T. Keeler Foundation …”
Dartmouth’s legal team forwarded the Bulletin on to Diana Lawrence, Dartmouth’s associate vice-president for communications. Lawrence refused to comment on the case while it is still pending.
As close as possible
Diane Quinlan is the director of the Charitable Trusts Unit. She has also declined to make any comments on the case, while it’s still pending. Michael Haley, Assistant Director of the Charitable Trusts Unit, defended his unit’s handling Dartmouth’s request for a modification during oral arguments. He said that the unit had been heavily involved in the case. Holmes also confirmed that he agreed with Holmes that the agreement did not require the money to be given to Keeler’s foundation.
Haley said to the justices, “We have $3.8million in charitable revenue and charitable assets that we cannot use.” “If we start over… they will have a new hearing and we can throw out all we’ve done, this is going to further tie up these resources. This was not the intention of the donor. “He wanted the funds to be used only for his charitable purposes.”
Quinlan stated that common law required the first oversight by an attorney general of charitable donations in 1601. New Hampshire was first to codify this responsibility into law. In 1943, the Charitable trusts unit was created by the Legislature.
She said that it is not unusual for institutions to ask permission to modify the restrictions of a gift. She cited two trusts for scholarships established in Keene by residents in 1929 and 1970.
The second only limited scholarships to Protestant male students. The second restricted scholarships to Protestant male students. In 1987, the board of education asked the court for permission to expand the scholarship program to include all students. They cited a concern that the administration of the scholarships based on gender and religion would violate the constitutional right to equality. A judge of the superior court agreed.
The Attorney General’s Charitable Trusts Unit filed an appeal with the Supreme Court. They argued that the school board’s concerns could be resolved by appointing a private person to administer the scholarship. A majority of justices in a 1990 ruling rejected the state’s arguments. Chief Justice David Brock, who was then in charge, disagreed. He wrote, “For centuries, Americans rightly believed they enjoyed a legally protected rights to choose their bounty and bequeath property as they saw fit.” Our state or federal constitution does not require this court to draft a “better” will for the decedent that reflects the scope of concern and conception typical of a program of public welfare.
In some cases, the Charitable Trusts Unit will either oppose a request for modification or ask an organization to make it. Around two years ago, Catholic Charities contacted the unit to say that they wanted to modify the eligibility requirements for Liberty House, their transitional housing facility for Manchester veterans.
The donor of the property, who gifted it many years earlier, stipulated that only Vietnam veterans could use it. Catholic Charities, as the population of Vietnam veterans dwindled over time, wanted to have court permission lifted to allow them to accept all veterans.
Quinlan told reporters that her office had informed the court they would be willing to agree with it, but only as long as Vietnam veterans are given priority. She said that the court accepted the recommendation of her unit.
She said: “The problem is, of course that when someone gives a gift and when the charity receives it, they cannot always predict what could happen in the future to frustrate the intention of the gift.”
In 1928, an anonymous woman donated $1,000 to Manchester’s poor to purchase ice for food refrigeration. In 1984, the trustees requested that a court use the money to assist needy residents in paying their electric bills. The court agreed.
Quinlan stated that “it seemed like a great idea at the moment, but by 1984 (when city officials requested the gift be repurposed), it became unpractical, because, “Who had an Icebox? Nobody.'”
“Honorably refund the money”
Keeler earned his law degree at Yale after graduating from Dartmouth. He then joined the Ohio law firm of William Howard Taft’s oldest son. According to his obituary, he partnered with a relative to turn 7,000 acres of land into a paper and pulp company which became Time Inc.’s main supplier.
Golf was also his passion until two years before his death at home in Vermont.
The institution does not need to inform the donor that they are requesting court approval to modify the gift. Peter Mithoefer was the executor of Keeler’s estate, and the president and trustee of Dartmouth’s foundation. He learned that the school would be closing its golf course through a friend who had read it in a magazine.
Mithoefer called Dartmouth to ask that the rest of Keeler’s gift, as Keeler had requested, be given to Dartmouth’s foundation. He claimed that the lawyer for Dartmouth declined. Mithoefer wrote to the school about his request in October.
Dartmouth’s modification of Keeler’s gift was a violation and betrayal of the agreement, he said. He said that he was certain Keeler would not have approved of any other use for his gift. This included “golf related” expenses. Mithoefer said that Keeler was encouraged by him to leave the money in Keeler’s school account for academics and scholarships.
Mithoefer wrote, “His answer was very clear.” He left money for the maintenance of the golf course, because he thought it would be an asset to the alumni.
Mithoefer described the school’s financial arguments for closing the course, as misleading. He mentioned the school’s desire to use the land as student housing. He accused the Charitable Trusts Unit for failing to investigate the real reasons the school gave for closing.
Mithoefer wrote: “I don’t begrudge Dartmouth for doing what they believe is in the best interests of the college, namely expanding its physical plant. But it should honorably return money specifically given to maintain the 18 hole golf course to Keeler’s foundation, the only beneficiary of his will.”
Annmarie Timothy is a senior reporter for the New Hampshire Bulletin. This nonprofit, independent news organization. This article first appeared in New Hampshire Bulletin.
