The Price of Liberty is Eternal Vigilance
Clemson School of Architecture
Was the Spaulding - Paolozzi gift proper?
Directors of the Foundation include Mayor Riley and Clemson faculty
Warwick Jones, Editor
Countess Spaulding - Paolozzi may be getting a lot of credit she would not want. The funds from her Foundation have been used to make a $500,000 grant to the Aquarium and a $1 million grant to the School of Architecture that Clemson proposes to build in Ansonborough. In recognition of the latest grant, the School will be named after her.
Opposition to location of School of Architecture
Many Charleston citizens think that the site, in the historic district of Charleston, is not right for the school and that the proposed building is too large for the site. A number of neighborhood associations have opposed the plan and have been joined by the Preservation Society and Save the City. These organizations have proposed that the new school be located on Ansonborough Field. The request to the Mayor has been ignored, though the Mayor stated at the recent meeting held to announce the Foundation's grant that those opposed to the school would "learn to love" the new structure.
So we thought we would check out the Foundation and were rather surprised by what we found. We have not been able to access the Foundation's Articles of Incorporation but we do have some of the 990 forms submitted to the IRS. These would indicate that the Foundation's purpose, unless one stretches the imagination a great amount, does not encompass the latest grants. And what is more, Mayor Riley and members of the Clemson Faculty are directors of the Foundation.
The purpose of the Foundation is very specific
We recognize that, even though the public may often be the indirect beneficiary of its grants, the Foundation is a private entity and the public is therefore not in a position to challenge its grants. Nevertheless, when the result of a grant has a direct negative impact on us, as does the grant to Clemson's School of Architecture, we certainly may question it.
First, let's look at the Foundation's purpose. We quote from the IRS 990 forms:
A. To research issues concerning health and aging of people
B. To research issues concerning ecological protection and preservation
C. To research issues concerning sustainability and development of agriculture
D. To research issues concerning women, including but not limited to health, aging and human rights.
Or, as more succinctly stated in another section of the tax return, "to research issues concerning health and aging, ecological preservation, agricultural development, and all issues concerning women."
Presumably both the grant to the Aquarium and the grant to the Architectural School were made under the rubric of "ecological preservation." But although the Aquarium may be educational in terms of marine life and may preserve a few individuals among marine species, the Aquarium's principal business is not the preservation of marine ecology or even research for it. Wouldn't a grant to the College of Charleston's Grice Marine Laboratory have been more in keeping with the Foundation's stated purpose? Similarly, although the Architectural School may peripherally address environmental issues in a very few of its courses, the thrust of the School is design, not environmental study, and, in any event, "environment" is not the same as "ecology." Would the Countess really have been happy donating a million dollars to a School that lists among its course one that is intended to study "Real estate and land development process from the developer's perspective" (as is the School's course in Real Estate 'Master Builder' Development Process)? Would it not have made her happier if the million dollars had been donated instead to the Clemson Department of Biological Sciences, which has a plethora of courses in the study of ecological systems and their preservation? Or to Clemson's Department of Agriculture, which also would met one of the Foundation's four explicit purposes?
The donations to the Aquarium and the Architectural School are all the more puzzling, since it would appear that Clemson's two representatives on the Foundation's Board, one of whom is associated with the Agricultural Department and the other with the Biological Sciences Department, did not object, or have chosen to remain slent.
Viewers can make up their own minds as to whether the objectives of the Foundation cover the grants to the Aquarium and the Architecture School. Our view is that they don't. Of course, maybe there are other objectives that exist in the Foundation's Articles of Incorporation. But considering that the four cited above are the only objectives declared to the IRS, one must assume that anything else is secondary. And if they are secondary, one has to ask why 10% of the Foundation's assets were paid out to causes that are not prescribed? The directors may not have done anything illegal but it seems they have acted against the spirit of the Foundation's purpose.
Assets near $15 million
We understand that the Foundation was set up prior or in 2002. Its funding was to come essentially from the assets of the Countess's estate. At the end of 2003, the Foundation had net assets of $14.9 million. Of this total, $5.5 million were related to the Hoopstick Island property, and the balance was largely cash or near-cash funds. Hoopstick Island was sold for $5 million in 2004, about 10% below book value. Notwithstanding, net assets of the Foundation at the end of 2004 were probably little different to those at the end of 2003. We have requested a copy of the 2004 return.
Directors of the Foundation
In August 2004, the Foundation had the following directors.
Dr Theodore Stern
Honorable Joseph P Riley Jr - Mayor of Charleston
Joel Smith - Dean, School of Business, USC
William Edwards Murray
Lester S. Schwartz - Tax Attorney
Nigel Redding - President of Spoleto Festival
Jennet R Alterman - Principal, Center for Women
Professor Dan Kelting - Assoc Prof, Adirondack Aquatic Institute, Paul Smith College
Dr John Mills - President, Paul Smith's College
Bruce Hecker - Director, Department of Education, SC Aquarium
Dr John Feussner - Chairman, Department of Medicine MUSC
Dr Calvin Schoulties - Dean, College of Agriculture etc, Clemson University
Dr Alan Elzerman - Director, School of the Environment, Clemson University
Original board members chosen or approved by Countess
We understand that the original Board members of the Foundation were appointed or approved by the Countess before her death in 2002. Clearly she held Mayor Riley, Nigel Redding, and others in high esteem. But the Board has condoned grants that go beyond was the Foundation's stated purposes. Her endorsement of individual directors does not bestow a right for them to approve such grants. And indeed, should grants for purposes in which Board members have a special interests, such as the arts and architecture, or the Aquarium, be made by the Foundation?
Class I directors were originally picked by the Countess and have the right to appoint other board members in Class I. Class 2 directors are members by virtue of the position they hold in the specific learning institution. But the choice of directors, even experts from the Aquarium, Clemson or the Paul Smith College, should not be assumed to be an endorsement of any and all programs at those institutions. The Countess may have been looking only for expert guidance for the Foundation as it identified worthy projects that were in accordance with the objectives of the Trust.
Grants to Clemson and Aquarium do not fit Foundation's primary objectives
The objectives of the Foundation are noble and the issues that it could address are very worthwhile. We think it is very strange therefore that the major grants so far have been for purposes that are, at the best, very secondary, and that, at the worst, are not included among in the Foundation's four stated purposes. What is more, the grants could be defined as "political" or "politically motivated," since both the Clemson School of Architecture and the Aquarium are among Mayor Riley's pet projects.
The Foundation's four purposes are all related to worthy social causes: research on (1) health and aging, (2) ecological preservation, (3) agricultural development, and (4) all issues concerning women. Worthier social causes exist that pertain much more directly to these purposes than the projects chosen by the Board. And in the case of Clemson, presumably there are numerous potential benefactors, for example, among it alumni, who would be glad to help fund the School of Architecture. Why were Clemson and the SC Aquarium selected to receive funds that could have been used to much better purpose?
Mr. Lester Schwartz, speaking at the announcement of the grant to the Clemson School of Architecture, is reported as saying that the grants were in accord with purposes of the Foundation. We find it hard to reconcile this with the objectives of the Foundation as submitted to the IRS.
There have been references in the press that the Countess was a supporter of the Aquarium and Spoleto. We don't dispute this. But we find it strange that if she wished to support these entities through her Foundation, she made no mention of any of the activities in which they are engaged. Where is the reference to architectural studies and preservation, for example, or even general educational purposes, such as neccessary to justify a grant to the Aquarium? The purposes of the Foundation are specific, and as far as the Aquarium and the School of Architecture are concerned, they seem exclusionary. We can only speculate on the Countess's reasoning.