AG: Donor Intent Was Honored In Sandy Hook Fund Distribution

This report was updated August 8 adding comments from Fund Chairman Dr Charles Herrick.

Connecticut Attorney General George Jepsen issued a notice to the United Way of Western Connecticut and the Newtown-Sandy Hook Foundation August 7 indicating the agency and foundation honored donor intent in its decision to distribute $7.7 million of the more than $11 million collected in the wake of 12/14 to immediate victims and their survivors, in the amounts that were designated by the foundation.

The letter states: “…the Newtown-Sandy Hook Community Foundation, Inc did not act contrary to donor intent in determining the distribution allocation for direct payments to the families most affected by the tragedy.” (The entire letter is available here.)

The “families most affected” by the tragedy is a reference to the 26 families who lost loved ones; 12 families of children who survived but were in the classrooms where other children and educators were killed; and two individuals who were injured but survived the tragedy.

“This conclusion is based on a comprehensive review of relevant materials, interviews, and other information, and not, as has been inaccurately suggested, only a review of gift documents relating to a small percentage of donations,” AG Jepsen wrote.

United Way CEO Kim Morgan responded in a written statement, saying her agency is “pleased that Attorney General Jepsen’s detailed examination of donor intent of the funds contributed to the Sandy Hook School Support Fund, once again, validates that the United Way of Western Connecticut (UWWC) consistently honored the intent of donors.

“We are hopeful that Attorney General Jepsen’s findings regarding UWWC’s honoring of donor intent will also satisfy the interests of Senators Richard Blumenthal and Christopher Murphy and others who may have had questions regarding this issue,” Ms Morgan continued. “We now consider this issue to be resolved. Without further delay, it is time for the Sandy Hook Community Foundation to proceed with their work of determining how best to allocate the remainder of the donated funds to help heal the Newtown community.”

Fund Chairman Dr Charles Herrick told The Bee that his efforts overseeing the fund distribution has been one of the most difficult tasks he has ever faced.

“And I think my fellow board members would all agree with me on that matter,” he said. “We all took it on with the full knowledge that we would be faced with the tremendous scrutiny and criticism that we ultimately faced. It is one thing to be warned about it. It is an entirely different matter to undergo it. But we all agreed it was a responsibility that needed to be borne and we accepted it as members of the Newtown community.”

Dr Herrick said nonetheless, he and his fellow board feel their service to the foundation is a privilege, “and that with the criticism there was also a great deal of support that kept us going.”

“We especially thank the attorney general for his efforts in providing the transparency to the process that was needed,” Dr Herrick said. “We hope his letter demonstrates our sincere efforts to both compassionately assist those most directly impacted while reserving some of the funds for the healing of the community in the years to come.”

Among those calling for an audit or review of donor intent were US Senators Richard Blumenthal and Chris Murphy. Governor Dannel P. Malloy was also critical of the foundation’s choice to withhold some of the donated money for future needs. The remaining distributions will be addressed in subsequent granting rounds, versus being distributed directly to immediate victims and survivors in the initial round.

In a July letter to the foundation, Gov Malloy weighed in expressing frustration with the distribution process, also calling for an independent party to handle the remaining nearly $4 million in donations.

In his letter, Mr Jepsen said his “duty as Attorney General is to enforce donor intent, protect the public from false representations in charitable solicitations, and ensure appropriate use of funds solicited from the public.”

He went on to state that Newtown Sayings Bank has consistently represented that the fund is a multipurpose fund intended “to provide support” to “the families” and “the community” affected by the tragedy.

These representations are broad and impose upon the fiduciaries not only significant responsibility, but also significant discretion to determine appropriate uses for the fund that will “provide support” to both “the families” and “the community.”

The AG stated that in a press release issued on the day of the tragedy, United Way stated that the fund was established to “provide support services to the families and community affected by this senseless tragedy.” And in a press release dated December 18, 2012, United Way stated that the fund Would “provide support services to the Newtown/ Sandy Hook community” and that “[a] local board of Newtown community leaders is being convened to determine how the fund is most needed and best utilized.”

He said other news releases and screenshots showing descriptions of the fund on the United Way website were consistent in describing the fund as intended to provide for the community affected by the tragedy or for the families and community affected.

Mr Jepsen also stated that it has been repeatedly and inaccurately reported that his office reviewed only three percent of donations prior to issuing the May 30 letter.

“As you are aware, the conclusions set forth in the May 30 letter were premised upon a review that was far more comprehensive than simply examining three percent of the donations to the fund. In particular, I thoroughly examined the policies and procedures adopted by the foundation in concluding that they conformed with accepted standards for governance of charitable institutions,” Mr Jepsen wrote.

He said the initial review further concluded that the factors the foundation considered in determining that $7.7 million was an appropriate amount for the families were neither imprudent nor unreasonable.

“In addition, my office reviewed correspondence accompanying many sizeable gifts which specifically provided that the donations were for future needs of Newtown and the families, the solicitation documents for the Hartford Marathon road race, and a spreadsheet reflecting millions of dollars in general purpose donations,” Mr Jepsen said. “We spoke with individuals from United Way about the process and learned that every effort was made in the weeks and months after the tragedy to direct elsewhere donations marked for specific families or victims.”

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