Foundation Watch

A Sweeter Future: Could There Be a Happy Ending?


A Sweeter Future (Full Series)
Philanthropies Adrift in PhiladelphiaDeviating from Intent
Could There Be a Happy Ending?

Summary: In the last issue of Capital Research magazine, Martin Morse Wooster explored the complicated history of the Hershey Trust which operates and funds the Milton Hershey School. Managing its $12 billion endowment is anything but easy. A series of articles in the Philadelphia Inquirer begining in 2010 exposed problems related to the management of the Hershey School and the Hershey Trust and caused many to wonder if the organization should look for other ways to put the vast Hershey fortune to good use: The Hershey School has a ready-made cause in Girard College, a similar organization that has been sadly mismanaged by the city of Philadelphia for over 150 years. Could there be a solution that might save both these venerable philanthropic institutions?

Today, enrolment stands at just over 300 students. Attendees receive full scholarships (in excess of $60,000 per year) to attend the institution. Students, who must be “academically capable” live in gender and grade-level based groups. While they spend the week in the boarding school environment, they are sent home on Friday afternoons and return on Sunday night. According to the school’s website:

In the spirit of Stephen Girard, Girard College educates the whole child. Nowhere is this more evident than in the residential program. Students learn life lessons about living in a community, enrich their school-day educational experiences, and pursue the school’s core values of integrity, respect, self-discipline, compassion and responsibility.

In the April 2018 update I wrote a about the Milton Hershey School (available at CapitalResearch.org), I explained two possible modifications to the Hershey Trust that would empower its board to put the organization’s embarrassing wealth to more meaningful use. The first adjustment would expand the geographic spending limit from the current footprint of Derry Township (a 27 square mile patch of land in south-central Pennsylvania where the city of Hershey is located) to encompass all of southeastern Pennsylvania, including York, Lancaster, Harrisburg, and Philadelphia. As I wrote in my update, “Milton Hershey did not want to create a national organization with his fortune, he wanted to help his fellow southeastern Pennsylvanians.”

Second, the restrictions on limiting grants to the Milton Hershey School should be removed, as long as the restrictions on ensuring that the funds be used only for helping deserving low-income children get a good education remain in place. Perhaps Hershey’s fortune could be used to create a private operating foundation, albeit one where the Milton Hershey School is the largest single recipient. In my view, the best way to ensure that Hershey’s wealth is focused on the founder’s original goal is for this operating foundation to fund scholarships that would enable any eligible student from southern Pennsylvania to pay half tuition at a qualified private school, including the quasi-private Girard College. Since the goal is to distort Milton Hershey’s wishes as little as possible, scholarships would be a better vehicle for his wealth than either creating new charter schools or directly funding Girard College.

Clearly, Philadelphians—and philanthropically minded persons everywhere—can see the importance of preserving an institution like Girard College. The Hershey Trust should explore the possibility of using part of its endowment to aid that struggling school. But a better use of Milton Hershey’s funds would be to award scholarships to worthy students than to fund Girard College directly.

Without some meaningful changes to its disbursement policies, the Hershey Trust’s endowment will grow haphazardly, like an amoeba, an oddly unfortunate consequence of vast wealth that has in the past enabled scandal and financial impropriety.

Martin Morse Wooster

Wooster is a senior fellow at the Capital Research Center. He is the author of three books: Angry Classrooms, Vacant Minds (Pacific Research Institute, 1994), The Great Philanthropists and the Problem of ‘Donor Intent’ (Capital…
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