Bremer Must Clean Up Its Act

Somebody once described a foundation as a pile of money surrounded by people who want some.

The Otto Bremer Foundation, and its three trustees, may be a shocking case in point for that cynicism, if the report of the National Committee for Responsive Philanthropy is on target (“Charity watchdog questions Bremer,” July 1). Unfortunately, Bremer is not the first Minnesota foundation to come under this kind of scrutiny.

At Bremer, the criticisms include excessive trustee compensation of more than half a million dollars annually (after a 1,000-percent increase over 9 years); concentrating the roles of CEO, chairman and treasurer with the trustees; and firing the foundation’s executive director to justify the increased salaries.

NCRP’s credentials as a nationally recognized “watchdog” on behalf of the public interest are impeccable. It has served this role for 40 years and is headed by Aaron Dorfman, a professional and principled Minnesotan with deep roots in our philanthropic tradition and standards. His sharp criticisms of Bremer’s trustee conduct boil down to excessive compensation and avoiding the primary regulations of the Tax Reform Act.

Foundations exist at the pleasure of the U.S. government to serve a charitable purpose. While “charity” is a wide-ranging concept, the Tax Reform Act of 1969 spelled out clear rules for foundations. Before TRA, many (not all!) foundations were tax dodges, set up by clever lawyers.

The most egregious was the Ford Foundation. The Ford family had put all of the voting stock of Ford Motor Company into its foundation, thereby allowing the family to run the company free from stockholder input and estate taxes. It also got a tax credit for making the “donation” of highly appreciated stock. Sweet, as the kids might say today.

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