One of the ways to establish an estate-planning legacy to carry out charitable objectives is the forming of a private foundation. Forming such a private foundation can be complex, but is ultimately intended to enable its philanthropist founder or founders to control assets and direct the foundation’s charitable work.
One such famous private foundation is in recent news. Legendary actor, race car driver, World War II veteran, and philanthropist Paul Newman passed away in 2008 at the age of 83, leaving behind a wife, children and a private charitable foundation. Years before his death, Newman initiated the Newman’s Own Foundation, which produces “Newman’s Own” line of products familiar to many of us on grocery store shelves. Newman’s Own Foundation, per its website, states that its Mission is “To nourish and transform the lives of children who face adversity,” and that “[t]he Foundation continues Paul Newman’s commitment to use all the money that it receives from the sale of Newman’s Own products to support children, their families, and their communities.”
However, two of Newman’s daughters, as beneficiaries of Newman’s Estate and trustees of certain trusts established by his Estate Plan, have filed suit against the foundation. Their Complaint alleges a breach of fiduciary duty by the foundation and seeks, among other things, $1.6 million in damages to be donated to charities of their choice. As the Complaint appears to be newly filed, no Answer has yet been filed on the foundation’s behalf, but has issued statements that it continues to honor the intentions of its founder, and that "Best practices surrounding philanthropic organizations do not allow for the establishment of perpetual funding allotments for anyone.”
