In 2014, the National Committee for Responsive Philanthropy (NCRP) and local Minnesota organizations called on the IRS and the Minnesota Attorney General’s office to investigate the “suspicious and potentially illegal behavior” of the Otto Bremer Trust. Organizations urged action after three board members pushed out the foundation’s executive director, named themselves co-CEOs and gave themselves exorbitant salaries.
It took seven years of continued local advocacy and the election of a new state Attorney General to see Brian Lipschultz, Daniel Reardon, and Charlotte Johnson eventually investigated.
After several months’ deliberation, Judge Robert Awsumb has restored some sense of accountability by removing Lipschultz as a trustee. In a decision released late Friday April 29, the judge recognized that “Lipschultz has shown repeatedly that he cannot operate in a purely charitable manner, and has allowed his own personal interests, animosity, enmity, or vindictiveness to impact his decisions and behavior as a trustee of one of the region’s most important charitable institutions.”
At the end of his decision, Judge Awsumb wrote that “There is no room in the charitable world for animosity and vindictiveness to infiltrate or impact the decision-making of a charitable trustee.”
As I mentioned in a recent episode of Unpacking Philanthropy, “if we want philanthropy to serve the common good and not be highjacked for private purposes, we must have strong oversight – internal oversight with good governance practices, and regulatory oversight by state and federal officials.”
While Judge Awsumb’s decision is a step forward, it is not a total victory for good governance advocates. The judge blocked trustee Daniel Reardon from receiving extra compensation for giving investment advice, but he took no issue with the trustees’ compensation since it is within the limits allowed by the trust documents. Unfortunately, one of NCRP’s biggest concerns was not addressed by Judge Awsumb. The two remaining trustees are still acting as co-CEOs and are still supervising themselves.
Yes, it’s true that this unusual structure is allowed by the trust documents. But just because it’s allowed, doesn’t make it right.
Read the full article about advancing accountability and oversight in philanthropy by Aaron Dorfman at the National Committee for Responsive Philanthropy.