Accountability and the Weinberg Foundation


October 22, 1992|By PABLO EISENBERG

Recent newspaper articles about the Harry and Jeanette Weinberg Foundation in Baltimore highlight the irresponsibility of the foundation and its trustees, the lax standards of accountability required of philanthropic institutions by both the Internal Revenue Service and the general public, and the lack of courage by non-profit organizations and foundations in the face of outrageous behavior by one of their colleague institutions.

The five trustees of the Weinberg Foundation have apparently molded the institution in the image of its founder -- secretive, arrogant, contentious and cantankerous. The foundation's telephone number is unlisted, the location of its offices unknown to all but a few people, and its operating style and decision making a mystery. The phone number and address on its IRS Form 990 are those of the Weinberg real-estate operations and not those of the foundation's offices.

The trustees have had no previous involvement with foundations and, apparently, not much with the rest of the non-profit world. They have shown little interest in what other grant makers have done and they rarely consult with their peers. They justify their approach and style by saying ''that's what Harry would have wanted or done.'' That may be good enough for Harry but it's not good enough for the public, the taxpayers and non-profits.

The foundation does not publish grant-making guidelines or annual reports and it discourages unsolicited proposals. Darrell Friedman, president of the Jewish Community Federation of Baltimore, argues that the trustees are accessible because they have always responded to him and the federation. But that's the problem. He and his organization are among the few that have had access to the trustees. The trustees have not responded, either in writing or by phone, to hundreds of other organizations that have tried to reach the foundation. In short, the foundation and its trustees are both inaccessible and largely unaccountable.

It is one thing for a wealthy individual to be secretive and unaccountable; it is quite another matter for one of the 25 largest foundations in the country to be so abusive of the public trust. Harry Weinberg could have kept or given away his money without creating a foundation, in which case he would have had to pay taxes to the federal government. But he chose not to,

preferring to create a foundation, thereby avoiding substantial tax payments. In exchange for those tax benefits, he made a compact with the American people to meet urgent public needs in a publicly accountable way.

The irresponsibility of the foundation reaches the boundary of illegality in one provision of its bylaws that states that some of the foundation's second-generation trustees, and all of its third and subsequent generation trustees, must be Jewish. This is an outrage, especially for a philanthropic institution that claims to have as its primary purpose assistance to the poor on an economic basis. What if the bylaws had stipulated that trustees could not be Jewish, Catholic, Latino or black, or could only be white Protestant males? Civil-rights groups and the Baltimore Jewish community would most certainly have been up in arms.

The provision is discriminatory and should be eliminated. In view the tax expenditures involved in the exemptions granted to Weinberg and other foundations, the IRS has a responsibility to pursue this matter. Either the bylaws should be changed or the Weinberg Foundation should lose its tax-exempt status.

To make matters worse, the bylaws also include a clause that requires its current and future Jewish trustees to have been members in good standing of a synagogue for five years prior to election to the board. Those trustees who decide after their election to resign from membership in a synagogue are automatically dismissed from the board. The foundation therefore has the right to distinguish between ''appropriate'' and ''inappropriate'' Jews.

One further provision in the bylaws deserves mention. It states that any charitable organization that criticizes the foundation or challenges, directly or indirectly, the manner in which the Trustees exercise their discretion on any subject . . . shall forever be barred from receiving any distribution from the Corporation.''

Those two provisions reflect the narrowness, arrogance and meanness of disposition that seem to infuse the very heart of the Weinberg Foundation, despite its allocation of funds to some deserving non-profits. The foundation, unfortunately, does not embody the spirit and generosity of modern philanthropy. Not even a public-relations company -- which the foundation recently hired -- can hide this stark fact.

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