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  • 2023 Simon-DeVos Prize Winners Laura and Jeff Sandefer Create Change Through Education

    A 2009 encounter with a teacher dramatically changed the course of Laura and Jeff Sandefer’s lives—and the lives of thousands of students—forever. 

    That year, the Sandefers were considering a move from Montessori to traditional school for their sons. During a meeting with a teacher from a local private school, Jeff Sandefer asked when they should make the transition.  

    “As soon as possible,” the teacher said. “Once they’ve experienced so much freedom, they will hate sitting in a desk and being talked at all day.”   

    When Jeff pictured his curious, energetic boys confined to a classroom in this way, he was heartbroken. And that afternoon, when he returned home to Laura, he told her “We’re not doing that to our boys. We’re either going to home-school or start our own school.” 

    That’s how Acton Academy was born.  

    For their groundbreaking contributions to education through platforms like Acton Academy and the Acton Children’s Business Fair, the Sandefers are the recipients of the 2023 Simon-DeVos Prize for Philanthropic Leadership. This Prize honors living philanthropists who have set an example of leadership excellence through charitable giving, and by conveying the values of individual freedom, resourcefulness, faith in God, personal responsibility, scholarship, volunteerism and helping others help themselves. 

    Awakening Heroes on a Hero’s Journey   

    Acton Academy is a global network of private schools inspired by the one-room schoolhouse approach to education. These schools inspire every student to see themselves as a hero in waiting, with an important quest to embark upon. At Acton Academy, students are encouraged to connect to their unique gifts and genius, much like the small-group learning and apprenticeships of early America.  

    “We believe each child has a special gift, and our role is to inspire them with great stories from the past to be the heroes in their own hero’s journey,” Jeff says.  “We believe children learn best through trial and error, in a tightly knit community, tackling real world problems through sharing the stories, examples, rubrics and recipes widely available because of 21st century technology.” 

    Acton’s founding centered around the idea that each student is a genius in his or her own way. Every individual has a unique calling to uncover, and within that potential lies the ability to change the world for the better.  

    “While our learners excel as thinkers, speakers, writers and users of math and technology, we believe courage, setting goals and getting along with others are even more important,” Laura says.  


    From a Small Rental Space to a Global Movement  

    What started with seven students in a small rental house has expanded to a growing, worldwide educational phenomenon. Acton Academy’s learning model is characterized by:  

    • Game-based learning programs that help students develop core knowledge and skills 
    • Discussions based on the Socratic method that encourage the development of critical thinking  
    • Real-world, hands-on projects and learning experiences  
    • Apprenticeships that equip students with all-important skills and knowledge they can take into their professional lives  

    Now, with 300 schools in more than 25 countries so far, the Acton Academy model is steadily increasing in popularity. Students from kindergarten through 12th grade study and develop their individual talents in these intimate settings as they prepare for entrepreneurship, higher education or the workforce. 

    “My parents had seven children, none of whom learned the same way,” says Bill Simon, Jr., co-chairman of the William E. Simon Foundation, which, along with the DeVos Family Foundation, sponsors the annual Prize. “Laura and Jeff Sandefer are visionaries in helping empower parents to create schools that meet the needs of their children through the Acton Academies. We are so pleased that their accomplishments and generosity are being recognized with the 2023 Simon-DeVos Prize for Philanthropic Leadership.”  

    The Sandefers credit Acton Academy’s success to the families who had the courage to try a new approach to education.  

    “We focused on the needs of the end customer,” Jeff says. “Then, we built experiments that turned into kits many could use, and a network of people willing to work and learn together. In every way, it was a bottom-up experiment that relied on the hard work of thousands of young heroes and parents with real skin in the game.”  


    Sifting Through the Past: Education Before the Industrial Revolution 

    As Jeff and Laura began to consider what launching their own school might look like, they traveled back in time—first to the Industrial Revolution of the 19th and early 20th centuries, when our current public school model emerged. The current public school system is professionalized and modeled to train productive citizens. But that means children are being trained in an environment that is, essentially, industrialized.  

    The Sandefers believe the traditional model of education fails to recognize students as individuals. Rather than treating children as cogs in a machine, Acton Academy seeks to transform them into the leaders and heroes they’re capable of becoming.  

    “Children aren’t widgets,” Jeff said in his 2011 TEDxOKC Talk.  

    Rather than emulating the current educational system, Acton Academy is modeled after the one-room schoolhouse educational style that predates the Industrial Revolution. It’s also characterized by apprenticeships that allow students to study under a knowledgeable teacher who can help them learn essential skills for the years ahead.  

    “Jeff and Laura’s visionary ideas have transformed the educational ecosystem by fostering entrepreneurship, critical thinking and character development in young people through experiential student-led learning,” says entrepreneur and investor Rick DeVos. “Their work through Acton Academy has empowered students to discover their unique gifts and become independent lifelong learners. Jeff and Laura’s outstanding contributions uplift communities and ignite a ripple effect of transformational impact.”   


    Creating an Agile, Powerful Network Through Experimentation  

    Acton Academy’s founders and leaders have demonstrated a deep willingness to experiment and remain agile in their quest to develop its strong educational programs. According to Laura, they’ve carefully “defended against mission creep,” remaining focused on the task at hand.  

    “We learned from groups like the early Christian church and Alcoholics Anonymous how to create lightweight, powerful networks where those we serve promise to serve others and pay it forward,” she says.  

    Throughout Acton Academy’s development, its leaders have experimented in order to improve the educational model. They repeat what works until they can package it into a kit for others. Then, they create networks to learn from one another. When experiments are proven to be effective, they become part of Acton Academy’s playbook.  


    Entrepreneurial and Educational Roots Inspire a Fresh Method of Learning  

    At its core, Acton Academy helps to develop critical thinking and entrepreneurial skills in young students. The concept formed in part as a result of the Sandefers’ unique backgrounds.  

    A successful entrepreneur and educator, and the founder of seven businesses including the oil and gas company Sandefer Offshore and the energy investment firm Sandefer Capital Partners, Jeff learned entrepreneurship at an early age. His father, an oil businessman from Abilene, Texas, made his living from wildcatting, a high-risk method of exploratory oil drilling that may or may not yield results. At 16, Jeff launched his first business painting oil tankers.  

    He earned his bachelor’s degree in petroleum and gas from the University of Texas. From there, he went on to Harvard University to earn his MBA. During this time, he learned about the Socratic method, a teaching technique that Acton Academy employs today to encourage critical thinking in its students. For more than three decades, Jeff worked as a professor, first at the University of Texas then at his Acton School of Business MBA program and later as a guide at Acton Academy.  

    Laura, whose mother was a beloved teacher, holds a bachelor of arts and masters of education from Vanderbilt University. She’s also the author of “Courage to Grow: How Acton Academy Turns Learning Upside Down.”  

    Combining their shared backgrounds, the Sandefers blazed an entrepreneurial trail, establishing and growing Acton Academy into a global movement. Despite its success, they remain mindful of the reasons they first established the school.  

    “Our mission is to serve families and their quest for learning – not to take political positions or participate in educational reform,” Laura says.  


    Making an Impact Through Engaged Philanthropy  

    At the heart of every charitable donor is a desire to improve the lives of others. When it comes to being an engaged philanthropist, Laura says it’s important to focus on “questions, choices and community” over money and top-down solutions.  

    “[We focus on] questions to discover the deeply felt needs of an individual; choices to offer to the individual who becomes the hero in his or her own story and community so the individual becomes part of something grander and more beautiful, and almost always pays it forward by serving someone else,” she says.  

    Rather than using multiple metrics to gauge their success, the Sandefers say they only focus on one: the willingness of learners and their families to recommend Acton Academy to others.  

    Jeff says Acton Academy has looked to Philanthropy Roundtable as a model for its own growth and development.  

    “I found … Philanthropy Roundtable in 1989 when I was 29 years old,” he says. “Over the last several decades, their focus on donor intent, keeping overhead low and staying focused on the needs of those we serve have been guiding lights.”  


    Looking Toward the Future 

    As recipients of the 2023 Simon-DeVos Prize, the Sandefers will receive an award of $200,000, which may be paid toward one or more selected charities. Jeff and Laura have elected to split the award between the Acton Institute, which bears no relation to Acton Academy, and Hope International, a micro-finance organization that helps fight poverty. 

    “Jeff and Laura’s journey has been defined by a relentless pursuit of positive change, a commitment to innovation and a deep compassion for humanity,” says Dick DeVos, president of the Dick and Betsy DeVos Foundation. “Their ability to inspire, motivate and mobilize others across the globe through the Acton model is a testament to their exemplary leadership and charisma. Their story reminds me that each one of us has the capacity to make a difference, creating a legacy that extends far beyond our own lifetimes.” 

    For the Sandefers, accepting the Simon-DeVos Prize is the culmination of many years of philanthropy and impact. But it’s also a poignant moment for Jeff and Laura, who have been inspired by the Simon and DeVos families for many years.  

    “I’ve long admired the work and character of Betsy, Dick and the DeVos family,” Jeff says. “Likewise, Bill Simon has been a hero of mine since the 1970s, from his pioneering of the leveraged buyout to his world changing service as Secretary of the Treasury.”  

    “Being recognized by the Simon and DeVos families is a great honor and we’ll do everything we can to live up to it,” he adds. 

    The Prize was presented to the Sandefers on October 25, 2023 at Philanthropy Roundtable’s Annual Meeting in Rancho Palos Verdes, California. 

    Learn more about the Simon-Devos Prize here. 

  • Will the “Apprenticeship Degree” Come to America? 

    A version of this essay by Reach University President Joe E. Ross first appeared in Inside Higher Ed on July 25, 2023.  

    Philanthropy Roundtable is pleased to share this essay by Joe E. Ross, president of Reach University. Ross and his team have worked to provide an innovative model that creates pathways to opportunity for individuals working within educational communities while simultaneously solving one of the largest problems plaguing our nation’s schools today – teacher talent pipelines. Reach University is providing a low-cost solution to the barrier of credentialing for individuals who are best positioned to meet the educational needs of their local communities through a groundbreaking apprenticeship model.  

    Among high school seniors, a privileged few get to pick between elite, world-renowned colleges like Columbia, Duke, Harvard, MIT, Northwestern, Stanford, Wellesley or Yale.  

    What if they could spend their next few years at investment bank Goldman Sachs instead?  

    Some now can. Dozens of famous employers — including Goldman Sachs and other corporate luminaries like Deloitte, GE, IBM, J.P. Morgan, Nestlé, UBS and Rolls Royce — have begun to offer a four-year paid “apprenticeship” that leads to a debt-free bachelor’s degree.   

    What’s the catch?  

    Well, to apply for the Goldman Sachs gig and others like it, you need to be based in the United Kingdom. Here in the United States, the apprenticeship-to-degree model is only beginning to emerge, particularly for working adults who otherwise lack access to college. If the idea takes off, it could be a long-term solution to the $1.7 trillion student debt crisis and restore lagging faith in American higher education.  

    How does this model work?  

    Imagine a job – a paid job – that turns into a degree. Applicants apply to the employer. The diploma is technically conferred by a collaborating university. But the action happens outside the Ivory Tower. Half of the learning comes from on-the-job work. The rest comes from job-relevant classes typically held outside of working hours. Tuition is largely paid for as part of the learner’s compensation. There are no student loans. 

    Early adopters of a similar approach in the United States include state education agencies and K-12 school districts seeking to address the teacher shortage. The nonprofit Reach University created a debt-free, apprenticeship-based bachelor’s degree specifically for school employees in Alabama, Arkansas, California, Colorado and Louisiana. Launched in fall 2020, the fully job-embedded program has grown from 50 candidates to over 1,500 in less than three years.  

    The federal Pell grant typically covers all but $2,000 of the cost of the job-embedded degree program. Philanthropy or Labor Department apprenticeship funding covers most of the remaining tuition, so each candidate’s out-of-pocket contribution is capped at $900 per year. That’s enough to ensure some skin in the game, while keeping the program affordable without student debt.  

    Dr. Heath Grimes is the superintendent of the rural Russellville City School District in northwest Alabama. The majority of students in Russellville are Hispanic but the district has had a hard time recruiting bilingual staff. Grimes began last year to recruit prospective hires who had graduated from the local community college. He positioned the district as a kind of “transfer institution” where they could use their job to turn their associate degree into a bachelor’s degree.   

    Elizabeth Alonzo, who held an associate degree in business, was among the first to accept this unusual offer. She now serves as an English language aide. Her job is a kind of apprenticeship where what she does at work renders both a paycheck from the district and academic credit from Reach University. Less than a year from now, Alonzo will graduate with the bachelor’s degree she needs to become a teacher. 

    She will be the first fully bilingual elementary school teacher in Russellville.  

    For now, the apprenticeship-to-degree program at Reach exclusively serves school employees – classroom aides, coaches and bus drivers, for example – who aspire to become teachers, and who first need to earn a bachelor’s degree.  

    But could this idea expand in the United States to fields outside of teacher preparation?  

    The answer is yes. Just look at what’s happening in the United Kingdom. More than 100 universities now offer so-called “degree apprenticeships” in fields ranging from management consulting to medicine, and more than 40,000 new students enroll each year. Robert Halfon, the U.K. minister for higher education and skills, likes to say that “degree” and “apprenticeship” are his two favorite words.  

    The ordering of those words — degree before apprenticeship — reflects the complexity of the apprenticeship system in the United Kingdom, where the “degree apprenticeship” is the pinnacle of a multi-level system that also includes the “intermediate apprenticeship” and “advanced apprenticeship.” This nomenclature does not translate on our side of the Atlantic. It makes more sense to refer to the American version as the “apprenticeship degree.”  

    After all, amid skyrocketing student debt, it’s not the apprenticeship that needs to be modified. It’s the degree.  

    That’s why Reach University is bringing together policymakers, philanthropists, employers and entrepreneurial leaders in higher education and workforce development to launch a new nationwide center to advance the apprenticeship degree – not as a postsecondary alternative, but as a postsecondary option – and to make it mainstream in the United States.  

    We believe the emergence of the apprenticeship degree has three notable implications for the future of American higher education:  

    1. For starters, we’re skeptical of narratives that paint the apprenticeship as a mere “alternative” to college. This is a false binary. An apprenticeship that intentionally leads to a degree provides both near-term job skills and long-term upward mobility.  
    1. Second, we imagine the future of college as the future of work: The workplace becomes a campus. Colleagues become classmates. Classes may be online, but learners are not remote. This would be a big change for higher education. To conflate the apprenticeship degree with an online degree or an executive degree would be like mistaking Superman for a bird or plane. 
    1. Finally, when it comes to the nation’s seemingly intractable student loan crisis, we believe the debt-free apprenticeship degree could save the day. But this will only happen if job-embedded higher education goes mainstream, drawing the imagination of learners across all income levels. 

    Enrique Peñalosa, a former mayor of Bogotá, Colombia, has been quoted describing this third dynamic in the context of urban policy: “The sign of an advanced society is not where the poor have cars, it’s where even the rich use public transportation.” 

    Similarly, we’ll know the apprenticeship degree is changing the landscape of opportunity in America when rich and poor alike aspire to a job that will lead to a good degree.  

    Not the other way around.   

    To learn more about Reach University, visit www.reach.edu. If you are interested in helping accelerate Reach’s work addressing the teacher shortage or supporting Reach’s Fall 2023 launch of the new National Center for the Apprenticeship Degree (NCAD), please contact NCAD Executive Director Eric Dunker, edunker@reach.edu.   

    For more information about other organizations providing Pathways to Opportunity, reach out to Philanthropy Roundtable Program Director Erica Haines.  

  • This Labor Day, Pioneer Institute Highlights Importance of Vocational Training

    As Americans celebrate the achievements of our nation’s workers this Labor Day, Philanthropy Roundtable is proud to support organizations that eliminate barriers to upward mobility, expand opportunity and reward hard work. I recently sat down with Jim Stergios, executive director of Pioneer Institute, a think tank that envisions a nation where people can prosper and society can thrive because of “world-class options in education, health care, transportation and economic opportunity, and where our government is limited, accountable and transparent.” 

    The interview below has been edited for length and clarity. 

    Q: You lead Pioneer Institute (PI), a Massachusetts-based public policy think tank that concentrates on education, health care and economic opportunity. What is your mission and what role do you play in the broader public policy landscape? 

    Stergios: Pioneer’s mission is to advance innovation across multiple states in education, health care and economic opportunity through best-in-class research, advocacy and legal action.  

    Our education team works in multiple states with the goal of preparing students to be good citizens and economically successful. Our strategic focus is on innovations, especially the expansion of public (charter and vocational-technical) and private school choices, not on fixing broken public systems.  

    Our health care strategy focuses on the life sciences. In the last half century, the U.S. shed 40% of its hospital beds, largely because of the rise in outpatient care made possible by massive medical advances. Our life sciences team works in seven states and Washington, D.C., to promote transparent pricing, fend off price controls and expand adoption of pricing strategies that will make cutting-edge treatments more affordable.  

    On economic opportunity, we run on dual tracks, defending Massachusetts’s economic competitiveness and piloting in several states, for now, a program on the catalytic role of immigrant entrepreneurs in the U.S. economy as a way of building an understanding of capitalism. 


    Q: Over the last 30 years, PI has focused on policies that expand opportunities for all people. Where do you see the biggest opening for making gains in this area?  

    Stergios: In these increasingly politically charged times, organizations must focus on research, partnerships and legal strategies. That’s why we started the Pioneer Public Interest Law Center. Its job is to create precedents that will have immediate and lasting impact. Currently, it is focused on equal treatment for special needs students in private schools, enforcement of state obligations to teach U.S. history and civics, and the defense of immigrant entrepreneurs harmed by unnecessary government regulations. 

    Pioneer has seen significant progress in recent years, in Supreme Court cases like Espinoza v. Montana Department of Revenue, where our amicus brief was cited in Justice Alito’s concurring opinion, and Carson v. Makin. Since these decisions, Pioneer’s research and advocacy on the ground in 10 states assisted local activists in securing legislation expanding choice.  


    Q:  While vocational training in schools has fallen out of favor over the last several years, you have focused on it quite a bit, authoring a book on this issue called “Hands-On Achievement: Massachusetts’s National Model Vocational-Technical Schools.” Why have you focused on this topic? 

    Stergios: Education reformers usually focus on either charter or private school choice. Massachusetts vocational-technical schools are public schools of choice that were ignored for too long. The commonwealth’s 1993 Education Reform Act required vocational-technical students to pass the same tests as their peers in other public schools to earn a diploma. That, along with a system in which students alternate weekly between academic and vocational education, has created a network of schools that outperform the state’s comprehensive high schools, ensure that students graduate with strong work skills and credentials, and have dropout rates a third of the statewide average.  

    That is especially impressive because Massachusetts’s vocational-technical schools educate more special needs and low-income students than other public schools. No state has gotten vocational-technical education right the way Massachusetts has. These graduates have a choice of pursuing further education or entering jobs that offer family-sustaining wages—without college and the debt that often accompanies it. Importantly, expanding stronger vocational programs in other states will address labor shortages in the trades and technology manufacturing and services sectors. 


    Q:  How have your strategic partnerships helped PI expand vocational and technical school efforts outside of Massachusetts?   

    Stergios: Pioneer is partnering widely to extend the impact of our vocational-technical school work. Through our longstanding partnership with the Massachusetts Association of Vocational Administrators, we were able to connect with national industry organizations such as SkillsUSA and Advance CTE.  Working through our chambers of commerce, we developed contacts with peers in our target states (Kentucky, New Hampshire, Ohio, Oklahoma, Tennessee and Texas). Employers we’ve connected with understand the deficiencies in federally funded workforce development programs. Finally, we work with State Policy Network affiliates to disseminate our work nationally. 

    Pioneer also has hosted webinars on “Hands-On Achievement,” garnering over 14,000 views in our target states, California, Florida, New York and Washington. The book generated national print articles in outlets like The Washington Post, The Washington Times, IndustryWeek, Public News Service, radio coverage, media attention in target states and think tank podcasts and articles. Our mini-documentary, “Training Our Future Workforce: Voc-Tech Success,” was watched over 84,000 times. 


    Q:  The recent Supreme Court decision ending affirmative action in higher education will impact students throughout the country. Why is focusing on K-12 education important in creating opportunities for all students?   
     
    Stergios: Our focus remains on K-12. Much of the racial tension generated by affirmative action results from the failure of our monolithic public schools. Affirmative action in higher education admissions is itself a clear indictment of the success of America’s public K-12 schools. If traditional public schools were doing their job, such an “end of pipe” workaround would never have been necessary. This is, in part, why the vocational-technical model is vitally important. We need more K-12 models that bridge achievement gaps.  


    Q:  What are the ongoing challenges or pitfalls for PI and organizations like yours that aim to address expanding opportunity through education? How are you tackling these issues?   
     
    Stergios: I’m very hopeful about education. In 2000, few would have believed that by 2023, district schools in the U.S. would lose 10% of their market share, as measured by enrollment, to charters and private education models. Instead of responding by improving the product, the two national teachers’ unions are doubling down on divisive, self-serving rhetoric.  

    Pioneer is part of a group of organizations supporting change in states where that is possible. Only the threat of even greater losses in market share will force traditional public schools to change direction and focus on providing educational opportunity to all students. 

     For more information about this organization or others providing Pathways to Opportunity, reach out to Philanthropy Roundtable Program Director Erica Haines.  

  • Donor Intent Watch: Controversies Around the Country

    In May, following the passage of the Donor Intent Protection Act in Kansas, Philanthropy Roundtable launched a monthly series on donor intent controversies around the country to better inform those who care about this important topic. This edition of our Donor Intent Watch again focuses on several higher education disputes, this month in Arizona and California.  

    We also have two disappointing updates, one on a Dartmouth College case we featured in May and the other on proposed donor intent legislation in Ohio. We encourage donors to contact us with any questions they have about our featured items and to consult additional resources on donor intent at the Roundtable’s Donor Intent Hub.   


    Discord at Arizona State University 

    Philanthropist Tom Lewis made headlines this month when it was revealed he had withdrawn his funding for the T.W. Lewis Center for Personal Development at Barrett, Arizona State’s Honors College. His decision ended a 20-year relationship between Lewis and his wife, Jan Lewis, and Barrett. Lewis has taken great care with his grants in higher education, and we featured him prominently in our donor intent guidebook, “Protecting Your Legacy.”  

    His philanthropy at ASU began with small grants to Barrett, expanded to significant scholarship offerings and culminated with the founding of the Center for Personal Development, which offered Barrett students innovative courses, workshops and a speaker series. At no time did he fall into the endowment trap, but instead structured larger awards as grants made in increments over a limited term, with continued donations dependent on satisfactory progress reports. “Start small and start short,” he advised other donors. 

    Lewis’s style of grantmaking made it possible for him to pull his support in the wake of campus protests and the alleged termination of the Center’s executive director, following a February 2023 presentation at the Lewis Center on “Health, Wealth and Happiness.” Lewis expressed disbelief at the “outrage” sparked by the event’s mostly conservative speakers, saying: 

    We expected some opposition, but I was shocked and disappointed by the alarming and outright hostility demonstrated by the Barrett faculty and administration. … After seeing this level of left-wing hostility and activism, I no longer had any confidence in Barrett to adhere to the terms of our gift, and made the decision to terminate our agreement, effective June 30, 2023. I regret that this decision was necessary, and hope that Barrett and ASU will take strong action to ensure that free speech will always be protected and that all voices can be heard.  

    While this is an unfortunate conclusion to what had been a productive relationship, Lewis has the satisfaction of knowing he did not leave funds behind in a perpetual endowment that would no longer align with his values.    

    Read more here and here.  


    Hastings College of the Law Changes Its Name to UC College of the Law, San Francisco 

    On September 30, 2022, California Gov. Gavin Newsom signed a bill to change the name of University of California Hastings College of the Law to University of California College of the Law, San Francisco. Within a week, the Hastings College Conservation Committee, which includes alumni and six descendants of the law school’s founder, Serranus Clinton Hastings, filed a lawsuit against state and school officials.  

    The plaintiffs say the removal of Hastings’s name violates a contractual agreement made between Hastings and the state in 1878 when he made a gift of $100,000 in gold to establish the institution. Among other stipulations in that agreement, the lawsuit argues, was one which ensured that the school would forever be called the “Hastings College of the Law,” and which promised Hastings’s heirs the return of his gift —with interest —should the school ever “cease to exist.” That amount is currently some $1.7 billion. 

    The dispute erupted in 2017 when the San Francisco Chronicle published an op-ed calling for renaming the law school because its founder had encouraged and financially supported lethal violence against Native Americans in the 1850s. In response, a Hastings Legacy Review Committee was formed and commissioned a three-year study on the matter. The current lawsuit contends the study raised doubts about any direct involvement of Serranus Hastings in the deaths of members of the Yuki tribe.  

    The plaintiffs also note that, in September 2020, Hastings’s dean, David Faigman, recommended against any name change, but suggested instead that the school engage in “developing a true partnership between the descendants of those [S.C.] Hastings wronged and the school that bears his name, [which] will create substantive opportunities to transcend that history and live and work for common goals.”  

    When another article accusing Hastings of masterminding a massacre of Native Americans appeared in The New York Times in late October, 2021, however, the response abruptly changed. Within days of the article’s publication, the law school’s board resolved that Dean Faigman should collaborate with California’s state government to remove the Hastings name from the institution. A bill authorizing the change, AB 1936, was introduced in the California Assembly on February 10, 2022. It passed both Assembly and Senate without a negative vote in August of that year, was signed by the governor in September and took effect on January 1, 2023. 

    This will be a particularly interesting dispute to follow because of the use of legislation by California to invalidate the 1878 agreement. The lawsuit argues this is not only “an unconstitutional impairment of the state’s contractual obligations to S.C. Hastings and his descendants,” but it also “violate[s] constitutional prohibitions against bills of attainder and ex post facto laws, as well as the California Constitution’s requirement that the College remain in its existing ‘form and character,’ free from sectarian or political influence.” 

    Read more here. 


    Update on Dartmouth College Lawsuit 

    In the May 2023 Donor Intent Watch, we discussed a case at Dartmouth College concerning a 2002 restricted gift made in the will of the late Robert T. Keeler for the “sole purpose” of maintaining the school’s golf course. A second restriction advised the college that any funds not used for that purpose were to be returned to Keeler’s charitable foundation. In 2020 Dartmouth closed the course, but the New Hampshire Attorney General’s Charitable Trusts Unit determined that because financial reasons spurred the closure, Dartmouth would be allowed to keep the funds and use them for “golf-related” purposes, including financial support of the men’s and women’s varsity golf teams. The estate of Robert T. Keeler filed a lawsuit rejected by a circuit court on the grounds that the estate of Robert T. Keeler did not have standing to bring such a suit. In response to an appeal filed by the estate to the Vermont Supreme Court, the decision of the circuit court has been affirmed by a unanimous vote.   

    Legal standing is all too frequently a stumbling block in efforts to protect donor intent, and in this case, the use of a will to convey the donor’s restrictions was insufficient to establish such standing. Dartmouth was ultimately successful in maintaining control of the funds because “the statement of understanding between the Keeler estate and Dartmouth that formalized the gift made no provision for the estate or the foundation to recover the money if the golf course was closed.” Donors should certainly consider bringing in legal representation to help craft a carefully worded gift agreement with the recipient institution – possibly one which names a contingent beneficiary with legal standing to sue.   

    Read more here. 


    Update on Ohio Donor Intent Legislation 

    Thank you to Jeff Moritz, son of Michael Moritz, for whom the Ohio State University College of Law is named, for alerting us to the outcome of proposed donor intent legislation in Ohio. Senate Bill 83 had passed the state Senate along party lines, with Republicans voting in its favor. That bill contained controversial higher education provisions, but included a donor intent protection amendment for endowment agreements between donors and state higher education institutions.  

    The bill was added to the Senate version of the Ohio biennial budget in mid-June, but to gain the support of the Ohio State Bar Association, the bill’s proponents had agreed to a reduced statute of repose and the inclusion of only those endowments in place prior to the date of enactment. In the end, because of widely acknowledged disagreement between the Senate and House over the bill’s higher education content, SB 83 was removed from the budget in its entirety. We will stay in touch with our friends in Ohio as Moritz notes they “will be regrouping and determining our next steps over the next few months.” 

    Mentioned on this page
    Native Americans in the United StatesUniversity of California College of the Law, San Francisco

  • Mental Health Awareness Month: How Nonprofits Are Helping Individuals in Need

    In honor of Mental Health Awareness Month, Philanthropy Roundtable is highlighting the innovative work of civil society in approaching one of the biggest challenges our country faces: mental illness. With one in five Americans experiencing mental illness each year, there is a significant opportunity for philanthropic leadership in helping to address the needs of these vulnerable individuals and provide support for their families.

    The realities of mental illness in America are staggering:

    • 46% of Americans will meet the criteria for a diagnosable mental health condition sometime in their life, and half of those people will develop conditions by the age of 14.
    • About 3-5% of the U.S. adult population has severe or serious mental illness.
    • 30% of adult Americans with serious mental illness receive no treatment (medication or therapy).
    • 10% of Americans with a mental illness are uninsured, with limited access to treatment.
    • Between 11-20% of veterans who served in Operations Iraqi Freedom and Enduring Freedom experience PTSD and/or other mental health conditions.
    • 1 in 5 kids has a diagnosable mental health condition.

    The above realities are even more nuanced when considering that mental health issues contribute to higher rates of homelessness, hunger, substance abuse, domestic violence and other societal issues, including lower education outcomes for the next generation.

    The Roundtable supports philanthropists committed to fostering overall health and well-being, including those working to address the impact mental health issues are having on individuals and communities. We work to connect funders with organizations that provide vulnerable populations access to care and other resources. From foundations such as the Hackett Family Foundation, the Rees-Jones Foundation, the Marcus Foundation and others, philanthropists are approaching mental illness in ways that are having a positive tangible impact on people’s lives.

    While the mental health initiatives philanthropy supports are vast, below is a sampling of the innovative nonprofits and thought leaders who are making a difference in people’s lives all over the country:

    • Headstrong Project: The Headstrong Project is a nonprofit mental health organization providing confidential, barrier-free and stigma-free PTSD treatment to veterans, service members and family connected to their care. Headstrong’s growing clinical network focuses its capabilities across states where unmet mental health needs are highest. On average, Headstrong treats 1,400 clients per month through 275 clinicians in 15 states and Washington, D.C.
    • Meadows Mental Health Policy Institute: The Meadows Mental Health Policy Institute provides independent, nonpartisan, data-driven and trusted policy and program guidance to ensure all Texans can obtain effective, efficient behavioral health care when and where they need it. Their vision is to be the national leader in treating all people with mental health needs.
    • Stop Soldier Suicide: Stop Soldier Suicide’s mission is to reduce service member and veteran suicide using enhanced data insights, focused client acquisition and suicide-specific intervention services. Their vision is a nation where service members and veterans have no greater risk for suicide than any other American. In 2020, they served more than 700 service members and veterans and their work has reduced clients’ suicide risk by an average of 27%.
    • Treatment Advocacy Center: The Treatment Advocacy Center is a nonprofit dedicated to eliminating legal and other barriers to the timely and effective treatment of severe mental illness. The organization promotes laws, policies and practices for the delivery of psychiatric care and supports the development of innovative treatments for and research into the causes of severe and persistent psychiatric illnesses, such as schizophrenia and bipolar disorder. In the past year, the organization was involved in passing 12 priority bills related to mental illness, including a federal bill and bills in Alabama, Arizona, California, Colorado, Georgia, Kentucky, Louisiana, Maine, Missouri, Virginia and Washington.

    Thought leaders and other resources related to approaches to mental health:

    • Dr. Sally Satel reviews Dr. Thomas Insel’s book “Healing: Out Path From Mental Illness to Mental Health” for The Wall Street Journal, discussing how few patients get the care they need.
    • Naomi Schaefer Riley’s op-ed in New York Post entitled “Too Many Children Are at Risk Because of Their Parents’ Mental Illness” discusses mental trauma passed on through generations.
    • DJ Jaffe’s TED Talk at the National Council for Mental Wellbeing evaluates how society may be responsible for misleading government officials into denying violence, rather than taking steps to reduce it with those who are severely mentally ill.
    • The New York Times highlighted the influence of psychiatrist E. Fuller Torrey and his research over the past 40 years into involuntary psychiatric treatment policies for people with schizophrenia and other mental illnesses
    • A report published by Manhattan Institute Senior Fellow Stephen Eide and Adjunct Fellow Carolyn D. Gorman articulates a concept to help those with serious mental health issues before, during and after crisis by focusing on a “Continuum of Care.”
    • Philanthropy Roundtable hosted a webinar discussing the effects of COVID-19 on the national economy and its relation to rising rates of diseases and deaths of despair.
    • Manhattan Institute Senior Fellow Stephen Eide wrote a New York Post op-ed entitled “NYC can be a pioneer in the treatment of the seriously mentally ill,” which considers New York City Mayor Eric Adam’s plan for the city to be more proactive in dealing with psychotic individuals.
    • A Manhattan Institute report by Isabel McDevitt, co-founder of Work Works America, writes about the homeless in America who are able and willing to work, but policy fails to address the employment-based solutions that could better serve them.

    If you are interested in learning more about how Philanthropy Roundtable supports donors committed to addressing our nation’s mental health crisis, please contact Esther Larson, program director at Philanthropy Roundtable here.

  • The Return of the Wealth Tax Debate

    Can the government tax charitable assets? A court case put before the U.S. Supreme Court may hold the answer to this question. By considering whether unrealized assets can be taxed, the courts could open the door for a new wealth tax covering assets within private foundations or charitable trusts.

    The U.S. Court of Appeals for the Ninth Circuit recently sidestepped the equal apportionment clause of the 16th amendment by becoming the first court in the country to state that an “income tax” doesn’t require that a “taxpayer has realized income.” In other words, this opens the door to the possibility that you can be taxed on income you didn’t receive (yes, you read that right).

    Last week, Competitive Enterprise Institute petitioned the U.S. Supreme Court to take up the issue in Moore v. United States.

    To understand what is at stake, we begin with investments. When the value of stocks and investments rise but are yet to be sold, they are called unrealized investment gains. These gains are not taxed according to current tax regulations until the investment is sold and the capital gains are realized.

    To illustrate, let’s say you purchased a painting for $1,000, and after a year, its market value rose to $1,500. As long as you haven’t sold the painting, the $500 increase in value is considered an unrealized gain, and you don’t need to pay taxes on it.

    The decision by the Ninth Circuit, if not overturned, could usher in a new era of federal taxes being imposed on properties, stocks, appreciating assets, possibly even jewelry, artwork, vehicles and household furniture.

    What’s more, opening the door to the possibility of imposing federal taxes on wealth would have profound implications for the charitable sector.

    Emmanuel Saez and Gabriel Zucman, two well-known French economists who have provided advice to Senators Elizabeth Warren and Bernie Sanders regarding their proposed wealth tax plans, have suggested a new approach to calculating tax bills for wealthy Americans. This new approach would consider not only the personal assets of these individuals, but also the assets of their charitable foundations.

    The change would be significant, given that American charitable foundations provided  $91 billion to nonprofit organizations in the previous year. If wealthy individuals’ foundations were to see a reduction in assets, the communities currently benefiting from those donations would experience a substantial (negative) impact.

    In 2019, the National Taxpayers Union Foundation conducted an analysis of Warren’s proposed wealth tax on charitable foundation assets and found the tax would consume between 6% and 25% of the annual disbursements of five selected foundations, including the Dell Foundation, the Omidyar Network and Dalio Philanthropies.

    The history of wealth taxes suggests they are not effective and are frequently abandoned due to the economic damage they cause. Fifteen European countries have introduced wealth taxes over the last century, but only three still enforce them.

    In 2017, France eliminated its wealth tax after the prime minister acknowledged it was prompting the departure of 10,000 to 12,000 millionaires each year. This tax impeded economic growth and contributed to just over 1% of overall tax revenue, which is an inadequate return for the cost.

    Sweden, which is often cited as a progressive policy model, had a wealth tax for almost 100 years before abandoning it in 2007. The tax had virtually no effect on government finances while being blamed for significant capital flight. Germany also had a wealth tax, but it was deemed unconstitutional and abolished in 1996. Wealth taxes have not proven successful worldwide, and it remains uncertain whether the U.S. Constitution grants Congress the authority to impose such a tax.

    The 16th Amendment says “taxes on income” do not need to be apportioned among the states. This likely means that other federal taxes, such as a tax on unrealized capital gains and other wealth taxes, must be applied equally to all 50 states, according to population.

    Alabama, which makes up roughly 1.5% of the nation’s population, would have to produce roughly 1.5% of the revenue raised by the tax. But Alabama and seven other states have no billionaires, and California and New York combined have 43% of them, so equally apportioning the tax among the states would be impossible.

    As the decision by the Ninth Circuit Court is petitioned, the Supreme Court may issue a decision on this matter — it could have profound implications on the possibility of federal wealth taxes being imposed on the unrealized assets of Americans.

    Whether we consider the economic costs of a tax on unrealized capital gains, the historical precedent of nations abandoning wealth taxes or the question of constitutionality, the result would be less economic growth, fewer jobs and a significant reduction in philanthropic giving.

    To learn more about the impact of wealth taxes on charitable giving, read our policy primer here.