The Harry and Jeanette Weinberg Foundation, hailed a year ago as a trust that might one day give away up to $45 million annually, distributed only $1.8 million to charities in 1990.
Although the foundation had record assets of $743,664,514 at the end of its fiscal year in February, its donations were less
than 10 percent of its 1989 gifts, when it had an estimated worth of $650 million.
Meanwhile, the foundation chose, for the most part, the same charities selected in 1989: The Associated: Jewish Community Federation of Baltimore, which received $1,724,000; United Way of Central Maryland and Lackawanna Co. (Pa.); and 19 charities in and around Dyersburg, Tenn., where the foundation owns a factory that makes grenade parts. The foundation matches contributions from factory employees.
New recipients included the Fuel Fund of Central Maryland, the Hawaii Food Bank Inc., in Honolulu, and the Rotary Foundation.
But it was the size of the donations that apparently dismayed and disappointed some local charities, said a staff person at the attorney general's office, where foundation tax forms are filed.
When Harry Weinberg died Nov. 4, 1990, most of his billion-dollar estate was willed to the foundation he created in 1959 in his and his wife's name. At the time, it was anticipated that the foundation would make charitable contributions totaling $30 million to $45 million a year to groups serving the poor and needy.
But that expectation was based on a common, somewhat simplistic view of theIRS code governing private foundations. According to that widely held belief, a foundation must give away 5 percent of its net assets annually.
However, the seven-page tax code, known as section 4942, sets such thresholds, said Dom LaPonzina, a spokesman for the IRS. Instead, it requires that "qualifying distributions" -- which may include the cost of running the foundation -- be the greater of a foundation's adjusted net income or minimum investment income.
Additional rules make it almost impossible for anyone outside the foundation or the IRS to determine exactly how the formula applies to the Weinberg Foundation. The IRS cannot discuss individual returns. The trustees did not return calls to their office yesterday.
Weinberg, a self-made man, was secretive and reclusive. Born in Eastern Europe in 1908, he grew up in a poor neighborhood in southwest Baltimore. He made his fortune in real estate, first in Baltimore and then Hawaii, where he eventually resettled.
Until Weinberg died, his namesake foundation attracted little at
tention. It did not accept grant applications or produce an annual report. It didn't even have a listed telephone number.
The foundation still tries to maintain a low profile. But with Weinberg's death, it has been forced into the limelight. Once his estate is settled, the foundation will be one of the 15 largest in the nation.
Internally, it is a modest organization, according to its tax return. Only three directors receive any compensation for their work with the foundation: Bernard Siegel, president, $81,250; Nathan Weinberg, vice president and secretary, $10,420; and Ted Gross, vice president and assistant secretary, $50,003. Administrative costs were $11,500.
Its assets are far from modest. Weinberg's legacy to the foundation includes his vast real estate holdings, a stock portfolio valued at $137 million and bonds valued at $141 million as of last Feb. 28.
Gross runs the office from 3900 Charles St., part of Weinberg's real estate holdings. Although the office has been inundated by mail since Weinberg's death, the foundation still makes it a policy to "pre-select" its charities. It continues to have an unlisted phone number.
One thing has changed since Weinberg's death: the foundation's charter. Under the new conditions, 25 percent of the money distributed must go to Jewish charities serving the poor; 25 percent to non-Jewish groups; and the remaining 50 percent to qualifying groups of any kind. The Associated may not receive more than $2 million in any 12-month period.
There are indications that next year's donations should easily exceed the 1990 total of $1,888,500. Pledged donations to St. Agnes Hospital, Meals on Wheels, the Bais Yaakov School for Girls, Goodwill Industries and other groups total more than $3 million to date.