THE
DEAD HAND
By
F. H.
GOFF
THE DEAD HAND
AN ADDRESS
DELIVERED AT HOTEL ASTOR, MAY 24,1921
BEFORE THE NEW YORK ASSOCIATION
OF TRUST COMPANIES
byF. H. GOFF
~be
<tle"elan~
1truat \tompan)?'
THE DEAD HAND
C
OMMUNITY FOUNDATIONS aim
to provide a flexible plan for administering charitable trusts. They are
designed to lessen the evil of "The Dead
Hand" by making property dedicated to a
specific charitable purpose available for
other uses when the one designated by
the donor becomes harmful or obsolete.
They provide that the wishes of the donor
shall be respected no longer than seems
well to the committee having charge of the
distribution of income. Community Trusts
represent at best a study, not a solution,
of the difficult problems involved in the
administration of charitable endowments.
The importance of vesting a competent
administrative body with power to supervise, reform, and if need be, extinguish
unwise trusts, has been demonstrated to a
limited extent in this country, but to a
greater extent in England and Continental
Europe. Time has shown that coupled
with the power to give there should be the
power to withhold when fraud or inefficiency is discovered, or when the use designated
the donor becomes degrading or
pauperIzmg.
The English Parliament possesses and
has often exercised this power. In earlier
times it confiscated land held by the mon-
?~
Page Three
asteries and other religious bodies in mortmain, and more recently, acting both directly and through a Charity Commission
appointed by it, has diverted funds to
other uses than those indicated by the
founder. With the co-operation of the
Attorney General, the Commissioners have
often intervened to suppress fraud and to
correct abuses in management. But there
are still thousands of Foundations in England which are harmful and devoid of
merit.
Unfortunately no legislative body in the
United States possesses this power. The
Supreme Court of the United States held
in the Dartmouth College Case that the
legislature of the State of New Hampshire
had no power to alter a charter granted by
the British Crown to the Trustees of
Dartmouth College in any material respect.
The original grant provided for a board of
twelve self-perpetuating
trustees. The
amending Act passed by the legislature of
that State, in 1816, increasing the Board
of Trustees to twenty-one (the additional
members being appointed by the Governor)
and creating a Board of twenty-five overseers (of whom twenty-one were to be
appointed by the Governor), was held to be
void because it impaired the obligation of
an implied contract between the State and
the founders when the charter was issued.
Page Four
I shall quote somewhat at length from
the opinion of the Court which was delivered by Chief Justice Marshall. He says
the original grant created
"an artificial, immortal being capable of
receiving and distributing forever, according to the will of the donors, the donations
which should be made to it. On this
being, the contributions which had been
collected were immediately bestowed.
These gifts were made, not, indeed, to
make a profit for the donors, or their
posterity, but for something in their
opinion of inestimable value . . . The
consideration for which they stipulated
is the perpetual application of the fund
to its object, in the mode prescribed by
themselves . . . The corporation is the
assignee of their rights, stands in their
place and distributes their bounty, as
they would themselves have distributed
it, had they been immortal. . . .
"According to the theory of the British
Constitution, their Parliament is omnipotent. To annul corporate rights might
give a shock to public opinion, which that
government has chosen to avoid; but
its power is not questioned. Had Parliament, immediately after the emanation of
this charter, and the execution of those
conveyances which followed it, annulled
the instrument, so that the living donors
would have witnessed the disappointment
of their hopes, the perfidy of the transaction would have been universally
acknowledged . . . This is plainly a
contract to which the donors, the trustees
and the crown (to whose rights and obliPage FilJe
gations New Hampshire succeeds) were
the original parties. It is a contract
made on a valuable consideration . . .
"Almost all eleemosynary corporations,
those which are created for the promotion
of religion, of charity, or of education,
are of the same character. The law of this
case is the law of all. . . . It requires no
very critical examination of the human
mind to enable us to determine that one
great inducement of these gifts is the conviction felt by the giver that the disposition he makes of them is immutable. It
is probable that no man ever was, and
no man ever will be, the founder of a
college,believing at the time that an act
of incorporation constitutes no security
for the institution; believing that it is
immediately to be deemed a public institution, whose funds are to be governed
and applied, not by the will of the donor,
but by the will of the legislature. All such
gifts are made in the pleasing, perhaps
delusive hope, that the charity will flow
forever in the channel which the givers
have marked out for it. .
"The whole power of governing the
college is transferred
from trustees
appointed according to the will of the
founder, expressed in the charter, to the
executive of New Hampshire....
The
will of the state is substituted for the will
of the donors in every essential operation
of the college. . . . This may be for the
advantage of this college in particular,
and may be for the advantage of literature
in general, but it is not according to the
will of the donors, and is subversive of
Page Six
that contract, on the faith of which their
property was given."
Justice Story rendered a concurring opinion from which I quote:
"A grant to a private trustee for the
benefit of a cestui que trust, or for any
special, private or public charity, cannot
be the less a contract because the trustee
takes nothing for his own benefit. . . .
A private donation, vested in a trustee
for objects of a general nature, does not
thereby become a public trust, which the
government may, at its pleasure, take
from the trustee, and administer in its
own way. . . . The only authority remaining to the government is judicial,
to ascertain the validity of the grant, to
enforce its proper uses, to suppress frauds,
and, if the uses are charitable, to secure
their regular administration through the
means of equitable tribunals, in cases
where there would otherwise be a failure
of justice."
As I view it, the principle laid down in
this case will greatly increase our difficulties
in dealing with charitable foundations when
they become obsolete, due to lapse of time
or changed conditions.
To accomplish
reforms in this country, appeals must be
made to courts of equity under the socalled cy-pres doctrine, to which I shall
refer later. If it has been difficult with the
omnipotent power possessed by Parliament
to deal with endowments in England, it
must be very evident that it will be more
Page Seven
difficult in this country in the absence of
legislative control.
The evil effects of "The Dead Hand" in
England may be illustrated by referring to
typical endowments where the evil is readily
apparent and by quoting opinions from
eminent men who have given the subject
careful study.
Mr. Gladstone, in a speech delivered in
the House of Commons in 1863 on a bill
providing for the taxation of charities, said:
"endowed charities often spring from mere
vanity and seldom from self-sacrifice. The
great majority of them were created, not
during the creator's life but by his will;
and it seems undesirable to spend public
money in tempting men to try to immortalize themselves as pious founders. The
only true 'charities' are those which a man
gives out of money which he might have
spent upon himself."
In speaking of what he termed the smaller
charities, he said:
"Three times have these Charities been the
subject of inquiry, and the Charity Commissioners of Lord Brougham, the Poorlaw Commissionersof 1834,and the Education Commissionersappointed some four or
five years ago, all condemned them and
spoke of them as doing a greater amount of
evil than of good in the forms in which they
have been established and now exist....
Poverty is thus not only collected but
created in the very neighborhood whence
the benevolent Founders have manifestly
expected to make it disappear."
Page Eight
Mr. Hare, in an address before the Social
Science Association of England in 1869,
said:
"There seems to be a general concurrence of nearly all who have considered the
subject, that whatever the value or utility
of endowments at the time of their creation,
the watchful eye of some independent
authority is always necessary to prevent
their mischief and abuse. We are taught
by the universal history of endowments
that their administration has never corresponded with the original design."
Courtney Kenny, in his work on "Endowed Charities," to whom I am greatly
indebted for much of the information contained in this address, says:
"By a strange but familiar tendency of
human nature, the Trustee comes to regard
his trust as his property, and the beneficiary comes to regard his alms as his
right. The Foundation gathers abuses as a
seaweed gathers damp. The carelessness of
today becomes the habit of tomorrow. Illtimed parsimony creates a nuisance; illjudged liberality degenerates into a job.
"The history of English law reform contains few examples of more persistent and
unselfish zeal than the twenty years'
struggle of Lord Brougham to carry out
such an inquiry (relating to charitable
endowments) in England. He brought the
question before the House of Commons; he
aroused the public mind by a 'Letter to
Sir Samuel Romilly' (in 1818)on the abuse
of charities, which ran through twelve
Page Nine
editions in six months; and by a long series
of Parliamentary efforts he obtained the
appointment of four successive Commissions of Inquiry, which, in the emphatic
words of Earl Russell, destroyed many
flagrant abuses, detected the perversion of
a large amount of charitable funds, and
led the way to those further inquiries and
those remedial measures of which we have
seen the commencement and the progress,
but of which the consummation is yet to
come. His Commissions were at work
from 1818 to 1837, and the result of their
investigations-the longest in duration and
the most prolific in facts of all Parliamentary inquiries-is embodied in thirty-eight
folio volumes, consisting of some twentyfive thousand pages, describing twentyeight thousand eight hundred and eighty
Charities (with an aggregate income of
twelve hundred thousand pounds), and
compiled at a cost of more than a quarter
of a million pounds. . . ."
The efforts of Lord Brougham and others
"culminated in 1876, in the completion by
the present Charity Commissioners, after
fifteen years of compilation, of their General
Digest of Endowed Charities - a true
Domesday Book of Foundations, replete
with priceless material for the historian,
the jurist and the politician."
The perils which Turgot enumerates in
his article on Foundations in the Encyclopedie have been proved real by painful
and universal experience. But his sweeping
practical conclusion is no necessary consePage Ten
quence of his premises; and it is possible to
admit all the dangers he fears without
accepting the drastic remedy he recommends. We are compelled to concede to
him that many endowed charities are, by
their very constitution, injurious; that
others, by various social changes, have ultimately been rendered injurious; and that,
even in the best, there is an inherent
tendency to become worthless.
Sir Arthur Hobhouse, in his work on
"The Dead Hand," says:
"How comes it that people are allowed
thus to devote property according to their
caprices forever? To me it seems the most
extravagant of propositions to say that,
because a man has been fortunate enough
to enjoy a large share of this world's goods
in this life, he shall therefore and for no
other cause, when he must quit this life
and can enjoy his goods no longer, be
entitled to speak from his grave FOREVER
and dictate FOREVERto living men how
that portion of the earth's produce shall
be spent....
"But of the greater Foundations, will
anybody confidently assert that they produce more good than evil? I will not dwell
on the great alms-houses, such as St. Cross,
which has been a stone of offence, perhaps
from its founder's days, certainly from
those of William Wykeham, until now.
Take the Foundations for objects we
should all approve - for learning, and
for the tending of the sick. Has the state
of the great endowed hospitals of London
Page Eleven
been always satisfactory? Has, for instance, that of Bethlehem? We all know
the contrary.
"Turgot cites the hospitals of the sick
as among the most striking instances of
the deadness of Foundations. Will any
contemporary of mine at Eton assert that
the then state of the College was useful
or edifying? Will any contemporary of
mine at Oxford say that the Foundations
of Merton or Waynflete or Chichele were
then playing their part in the world?
There may be times of awakened conscience
and active exertion, but the question is
whether rich Foundations derived from
private origin do not invariably gravitate
towards sloth and indolence? It is difficult
to point to one instance of a private
endowment for learning achieving great
results by itself alone. . . . It is not
possible to grasp too tenaciously the
principle that Property is not the Property
of the Dead but of the Living."
The moment that any religious bodies
became unpopular, the reigning Monarchs
hastened to confiscate their possessions.
The first two Edwards found it easy and
convenient to strip the Templars. Henry
V. dissolved all the alien Priories and
seized their lands, to the great contentment
of his subjects. Cardinal Wolsey found no
difficulty in suppressing upwards of thirty
religious houses to found his colleges at
Oxford and Ipswich. And Henry VIII.
swallowed up the rest; first the lesser
monasteries, then the greater, then the
Page Twelve
Knights of St. John, and lastly the whole
category of chauntries,
guilds, priests,
brotherhoods, obits, lamps and suchlike. To
my mind this history is most impressive,
and its moral is this: that the English
nation cannot endure for long the spectacle
of large masses of property settled to
unalterable uses.
Foundations attaching endowments to
the holding and teaching of prescribed
opinions are, if they are to be unalterable,
the very worst kind of Foundations that
can be conceived, for experience shows
that the opinions to which men have
attached property change and become extinct (sooner or later according to their
depth and force), and then you have a
direct premium on profession without belief. But that which tends to corrupt the
noblest part of man, the very eye of the
soul, his perception of truth, is as evil a
thing as can be imagined.
The number of Foundations made to
maintain theological opinions in this country is enormous. Some of the trust deeds
are very minute as to the tenets to be
believed. I quote from one which has been
quite recently in my hands. Those who
benefit by this Foundation are to believe
and teach:
"The one only living and true God, the
Creator and Upholder of all things; the
Scriptures of the Old and New Testament
Page Thirteen
as the Word of God and the only rule of
faith and practice; the doctrine of the
Trinity, including the Deity and distinct
personality of the Father, of the Son, and
of the Holy Spirit; the doctrine of original
sin, and the entire depravity of human
nature; eternal and personal election; particular redemption; atonement for sin by
the death and sacrifice of Jesus Christ;
justification by His imputed righteousness
through faith; the necessity of regeneration and sanctification of the Holy Spirit;
of repentance towards God and faith in
Jesus Christ in order to salvation, and the
final perseverance of the saints."
The conceit of some of the earlier founders
now seems ludicrous. In 16~5 Sir Thomas
Hunt directed "that ~d. apiece weekly in
bread be given to six poor people who
after service should come every Sabbath
day to the stone where his father lays, and
kneeling should say the Lord's Prayer, and
pray to God for the King and Queen then
reigning over them." Norrice's charity at
All Saints' Church, Leicester, gave to fortyone poor people, on St. Bartholomew's
Day, 4d. each, who were to depart, glorifying God. The minister was to have 4d.
for exhorting them, after the second lesson
at evening prayer, "to praise God for his
mercy in providing for the poor."
The Mosely Dole in Staffordshire directed that there should be paid annually a
penny apiece to all the inhabitants of the
Page Fourteen
parish of Walsall and of the adjoining parish
of Rushall.
The Charity Commissioners, in one of
their first reports, said:
"We met with charitable foundations
everywhere in old urban districts; and
everywhere found their operation and
tendency to be to create the misery they
were intended to relieve, whilst they did
not relieve all the misery they created
. . . In Spital-fields they created a population born in charity, nursed in charity,
fed in charity its life long, doctored in
charity, and, after a wretched life, buried
in charity."
It was found in England that "closely
akin in character and effect to Doles are
Charities for general gratuitous educationthe indiscriminate distribution of mental,
instead of tangible alms. . .. " The Commissioners found that "indiscriminate gratuitous instruction has been demonstrated
to be as invariably mischievous as indiscriminate almsgiving. The evil became
greater in the case of schools which gratuitously provided food or clothing for the
children."
In continental Europe Foundling Hospitals were found to stimulate unchastity
and to multiply illegitimacy and infanticide.
It is said that in England the Dole created
more paupers and the Foundling Hospitals
more foundlings, than their resources could
relieve. Charities to provide Marriage
Page Fifteen
Portions were found to operate as a bribe
to hasty and improvident marriages. In
1860 it was estimated that Fifty Thousand
Pounds a year of Charity revenue were
spent in payment of premiums to apprentices, notwithstanding the fact that the
practice of going through apprenticeship
had almost ceased.
Mter vast sums had been given in England to endow alms-houses, it was found
that the aged could be cared for better and
with less expense by granting pensions
free from any obligation of residence.
A Foundation attached to the French
Walloon Church at Canterbury, provided
for the payment of Forty Pounds annually
for reading a service according to the
English Ritual in the French tongue, to a
congregation which was paid to listen but
which could not understand what was said.
The Loughborough Charity was founded
in part to repair cause-ways and bridges.
In time the canals and drains carried off all
the water, removing the need for either.
John Alleyn directed that' the scholars in
the school endowed by him should have
daily at their breakfast "a cup of beere"
and at dinner and supper "beere without
stint."
It is said that over two thousand endowments given for primary education in England were rendered useless when such
Page Sixteen
schools became supported by Government
aid.
A parish in England possessing an endowment of upwards of Eight Hundred Pounds
a year to provide for care of the poor, had
a population in 1877 of forty-six, only four
or five of whom slept within the parish
and none of whom could properly be designated as poor.
Henry Smith in 16~6 established a Foundation to provide for his poor kindred. In
1700 it relieved four; in 1868 at a cost of
£6797 a year 41~, one-quarter of whom
were his great-great-great-great-great-greatgreat-great-great-great-nephews
and nieces.
The inspector reported that "some live upon
the gifts, and-he believed-neglected altogether, or followed carelessly, occupations
by which they might earn a living."
Kenny says that founders "who limited
so many of their pecuniary benefits, from
fellowships down to almshouses, to the
residents in particular localities, assuredly
never foresaw how completely the ties of
locality would be upset in your own day
by change in methods of transportation,
which made possible the renter class living
where they pleased."
The same Henry Smith, to whom I previously referred, in 16~6 provided that a
portion of the income from his Foundation
should go to redeeming captives from
Page Seventeen
pirates, but since 17~3 no captive has been
found upon which it could be spent.
A tobacconist provided that the rent from
his land be used to purchase snuff for old
women residing in the parish. Later it
not only ceased to be a residential district
but snuff went out of fashion. Perhaps, under the cy-pres doctrine, a court of equity
might be required to direct that the income
which had greatly increased, owing to the
enhancement in the value of the land, be
used to provide cigarettes for old women
in a neighboring parish.
What use can now be made of William
Bower's gift for teaching children how to
card, spin and knit, or of the funds that
Dr. Richardson directed be given in prizes
annually for the best piece of woolen or
linen cloth woven within three miles of
Ripon, or of Lurgan's Foundation to supply
spinning wheels to spinsters.
The advance in medical science has rendered useless the many leprosy hospitals
that have been built in England. The
abolition of imprisonment for debt has
rendered useless the large number of endowments to aid improvident debtors. Legal
reforms have superseded ancient foundations created to assist prisoners in gaol, to
provide shrouds for those executed on the
gallows, and to buy fire-wood to heat
county prisons.
Page Eighteen
The following are a type of foundations
which illustrate the vanity of the donor and
the desire for posthumous fame:
Henry Greene of Melbourne in 1679
provided that four poor women on every
twenty-first day of December be supplied
with four green waistcoats, lined with
green galloon lace; Thomas Gray of the
same place, in 1691, directed that there
be purchased annually for poor men and
women coats and waistcoats of grey cloth.
Edward Rose, in 1652, left land in trust,
amongst other purposes, to preserve rose
trees on his grave. The bequest of Elizabeth Townsend, in 1820, provided for
the payment of £3 yearly apiece to the
churches of Westbury and Warminister,
in Wiltshire, that on the Sunday before
Midsummer Day, there should be sung
at the morning and afternoon service the
anthem composed by her late husband's
grandfather from the 150th Psalm.
Mr. Kenny, in summing up his review of
the Foundations that have been rendered
useless by lapse of time, says: "We have no
right to suppose that the sociology of our
own day has attained a degree of perfection
which will enable it to guide Founders to
unerring schemes of charity. It may be
doubted if even our most confident charitable projects will stand the test of time."
. . . He expresses the opinion that no one
can "possibly predict that the way in which
he has disposed of his property is that in
Page Nineteen
which it will always produce ... a balance
of benefit, much less a maximum of good."
It would seem to be in the interest of
humanity that some legislation be enacted
or some scheme devised, which would make
funds given for trivial or useless purposes,
available to relieve distress at least in times
of war, pestilence and famine.
When
hospitals endowed to care for those suffering
from tuberculosis, diphtheria, leprosy, smallpox, yellow or typhoid fever have been
rendered needless, and hospitals endowed
to cure inebriates have been rendered useless, as it is conceivable they all may be
in time, the funds dedicated to these purposes ought to be made available to serve
mankind in other ways without the restrictions, uncertainties, delays and expense
incident to court proceedings.
If founders act with as little wisdom and
as much vanity and conceit in the future
as they have in the past, and the plans of
those who do act wisely prove vain, the evil
effects of the Dead Hand will operate in
the ages to come as they have in the past.
I have spent altogether too much time
in discussing the evils that have grown out
of irrevocable gifts to definite uses-evils
that might be avoided, as I view it, if the
gifts were made to Community Trusts or
under any other sort of a plan which gives
power to the living to determine how inPage Twenty
come may be used. What is the remedy
where this power is denied? In this country
where legislative control is impossible, recourse can only be had to courts of equity
to select another use-one nearest related
in kind to the purpose designated by the
donor. Unfortunately this remedy has
been found costly, inadequate and unsatisfactory. Courts properly feel bound by
precedent and judges are often too prone
to continue the old activities.
The inadequacy of this relief may be
illustrated by appeals that have been made
to the courts to reform or supervise charitable trusts in England. The Schools Inquiry Commissioners found the Berkhampstead Grammar School still in Chancery,
after having been there for a century and a
quarter. In the meantime it had undergone three decrees, five Master's reports,
and fourteen orders in Chancery, notwithstanding which the buildings were found
in bad repair, and the schools in a languid
condition.
At Bosbury a suit to remove the master
of the Grammar School, to get an account
and to appoint new trustees, lasted twentythree years and cost £1171, the school
endowment being only £98 a year. At
Stoke Prior, a charitable annuity of £10
fell into arrears, a Chancery suit was inPage Twenty-one
stituted to recover the arrearage which
proved successful at a cost of £359 l~s. 6d.
In the Ludlow Charities the cost of both
sides amounted to £~0,9~9. Foxe's Almshouses, possessing an income of £11 a year,
became the subject of a suit in which £1015
were paid as costs. At Ledbury,out of £9000
borrowed for the improvement of St. Catherine's Hospital, £3974 7s. 9d. were spent
in obtaining leave to raise the loan.
Because the expense and delays incident
to these proceedings were so burdensome
upon small charities, Parliament in 1860
passed an Act giving the Charity Commissioners concurrent
jurisdiction with
courts of equity to appoint and remove
trustees and to make cy-pres agreements
for charities with limited endowments. It
has been said that no other permanent
Commission has ever proved so completely
successful.
It is possible that some relief may be had
by the appointment of similar Commissions
in this country but it would take many years
to accomplish this, owing to the fact that
Constitutional amendments would be required, at least in many states, to confer
judicial power without right of appeal in a
purely administrative body.
Experience
has taught that the power of revision and
supervision of charities is not so much a
judicial as an administrative function.
Page Twenty-two
Mr. Kenny says:
"It is imperatively necessary that the
primary revising authority should not be
regarded as a mere tribunal of reference,
to which petitions for the reconstitution
of a Charity may be addressed by the
Trustees, or even by outsiders; it must, as
a branch of the executive government of
the State, have full power of initiating
schemes of revision in all cases where it
may find that they are needed. This right
of initiative is essential, not merely to
prevent the possibility of the powers of
revision remaining entirely unexercised,
but also to give their exercise a character
of completeness. Without it, the charities can only be dealt with individually, as
applications happen to be made."
I am of the opinion that protection from
the evils of the Dead Hand, as respects
endowments that may be created in the
future, can be secured by the Legislatures
in the several states or by Congressional
action where the charter was issued under
federal authority, enacting laws requiring
registration of charitable endowments and
conferring upon a properly constituted
Commission full power to deal with endowments hereafter immutably dedicated to
definite and specific uses.
I have no doubt that our Legislatures
have power to enact such laws or that the
effect, if enacted, would be to vest in them
the same control and dominion over endowed charities possessed by Parliament.
Page Twenty-three
Believing, as I do, that an important
function of charity is to experiment in
benevolence and to pioneer the way in new
fields of charitable endeavor, and as the
usefulness is demonstrated, to pass the
activity over to the public to continue,
Charity Commissioners should be forbidden,
unless the purpose be manifestly vicious and
harmful, to substitute a new scheme for the
one indicated by the donor until sufficient
time has elapsed-say fifty years-to enable
the merit of the donor's scheme to be thoroughly tested; and it must not be forgotten that it often takes a long time to
demonstrate the usefulness of an idea.
When I was a student in the University
of Michigan, Prof. Langley, then occupying
the Chair of Physics, demonstrated that
Mr. Brush's idea that electricity could be
utilized for commercial lighting was not
merely impractical, but impossible. It was
but a few years later when the world
broadly smiled when his brother, then in
charge of the Smithsonian Institute, began
his experiments in aviation with a heavierthan-air machine.
It is but fair to the donor that a thorough
test be made of any idea in benevolence he
wishes to have tried out. I would only
urge that, if the donor's scheme proves
worthless, a prompt and inexpensive method
be provided for diverting the funds to such
Page Twenty-four
purposes as the then living trustees or the
Charity Commissioners, under changed conditions, may deem most widely beneficial.
It took England many centuries to learn
how to deal with her problems of the
Dead Hand. We ought early to find a way
to profit by her mistakes.
If Mr. Rockefeller was correct in thinking
that "the only thing that is of lasting benefit
to a man is that which he does for himself,"
and that money that comes without effort
is seldom a benefit and often a curse; if
Mr. Carnegie was correct in saying that
"the aim of the millionaire should be to
die poor, and thus avoid disgrace"; if Mr.
W. K. Vanderbilt was right in thinking that
"inherited wealth is a big handicap to
happiness" and that "it is as certain death
to ambition as cocaine is to morality"wealth must continue to flow in increasing
volume to charitable uses.
I am not unmindful that Mr. Rockefeller's gift to the Rockefeller Foundation
was made in broad terms for the use of
mankind; nor of the splendid gifts made
by Mr. Carnegie, Mr. Harkness and Mr.
Du Pont and others in recent years. They
give promise of more intelligence being
shown in making gifts to charitable use in
the future, but it would be a mistake to
assume that all donors will be as wise as
they.
Page Twenty-five
Conceit, vanity, love of ostentation, the
desire for posthumous fame-will be controlling motives with many in the future as
in the past. Then too, it is doubtful if anyone will succeed in planning a scheme which
will insure from within efficiency and purity of its own working. There will be need
for bodies having the power of administration the Charity Commissioners of England
had, to prevent mismanagement, extravagance and waste and to stimulate activity.
Mindful of our duties to future generations and our responsibility to our own, we
must recognize the need for remedial legislation to defeat the Dead Hand. But many
years, I fear, will be required to effect this
legislation. Fortunately, there is a method,
in the meantime, to accomplish some or
most of its purposes, with respect to endowments henceforth created.
Every lawyer, every trust officer, every
citizen, should use his influence in persuading donors creating charitable endowments
to vest broad powers in their trustees to
disregard the originally expressed preference
regarding the purposes to which income may
be devoted, if in the course of years those
purposes become obsolete or harmful. In
accomplishing this result I am hopeful that
the Community Trusts, established during
the past seven years in some forty American
cities, may prove a helpful instrumentality.
Page Twenty-aix
These Trusts or Foundations recognize,
in the words of the New York Community
Trust, "first, the element of certain and
constant change which is taking place in
our social structure and in our viewpoint
with respect to charity, and, second, that
the charitable problems of each generation
can better be solved by the best minds of
these generations than by the dead hand of
the past."
Supervised and safeguarded
flexibility of distribution is assured by the
terms of the instruments creating the
Foundations. Competence and continuity
in the management of funds is provided by
the selection of capable corporate trustees.
And the public interest is protected and
represented by the designation of a majority of the Committee of Distribution by
public authorities.
If the Foundations can measurably fulfill the purposes for which they are organized, they offer a helpful agency near at
hand for making philanthropy more effective and for cutting off as much as is harmful of the dead past from the living present
and the unborn future. Through their
operation we may anticipate some degree
of relief from the withering, paralyzing,
blight of the Dead Hand through the years
when no intellect remains to apply reason
and sympathy and discretion to the terms
of antiquated fiats.
Page Twenty-seven
C-5M.
1-15-24