It's a common occurrence in the world of charitable giving: The job of foundation trustee is so cherished, the work so undemanding, and the pay so generous that trustees cling to their posts well past retirement -- into their 70s, 80s, and beyond -- while earning hundreds of thousands of dollars.
Edward R. Lake, a long-retired government worker living in Chicago, is one such trustee. In the 1940s, Lake's chance encounter with a reclusive multimillionaire turned into a friendship that came to pay huge dividends. In 1995 Lake was named executor to the estate of Frank J. Florik and trustee of his $29 million trust. The Florik Charitable Trust, Illinois' seventh-largest for giving in 2001, donates mostly to Catholic churches and schools.
In a four-year period between 1998 and 2001, Lake drew down $615,000 in trustee pay while making just a handful of large annual donations. Last year, as Lake turned 80, he took a $230,000 paycheck and wrote six checks. The trust assets themselves are managed by a Chicago bank.
"I don't know what the big issue is about how much money I've got," Lake said in an interview. He said he doesn't know how his salary is set, or by whom. "Nobody's concerned about it," he said. "If the [Attorney General] of Illinois thinks it's a problem, he can try and do something about it."
While state laws vary, compensation for trustees is generally set by statute or by the court that administered the estate.
From small-town family trusts to prominent foundations, it isn't hard to find instances of elderly board members carving ample retirement stipends out of funds meant for charity.
In downtown New York, the $51 million William T. Morris Foundation has been very good to its elderly board president. Like Lake, the 86-year-old Edward A. Antonelli claims full-time work as a director. But his pay, at $809,000 in 2001, far exceeds the salaries set by law for New York's governor, attorney general, and the mayor of New York City combined.
The Morris Foundation, established in the 1940s by a manufacturing mogul, mainly supports major charitable institutions -- hospitals, colleges, and museums. When asked by a reporter, Antonelli declined to answer questions about his work.
Other trustees make no claim to put in a full-time effort for their pay.
In Danville, Va., an 86-year-old friend of wealthy donors and a 78-year-old relative are each paid about $40,000 a year by the Alexander Berkeley Carrington Jr. and Ruth S. Carrington Charitable Trust. It's not a huge sum, but foundation tax returns indicate they spend 15 minutes per week on trustee work.
"We don't do a whole lot of work, but we do some head-scratching and we have some extensive discussions," said James W. Perkinson, 86, the retired accountant and longtime friend of the Carringtons of Danville, who made their money in the tobacco business. Perkinson is now a trustee for their charitable trust, which makes donations to local groups. "That type of work isn't pick-and-shovel work. It's background knowledge of what the Carringtons wanted, and there's no way to buy that."
Perkinson said the trustees meet anywhere from three to six times each year. Asked if the handful of meetings and other occasional work justified his salary, Perkinson said, "Definitely. Why shouldn't I? Everybody else gets paid."
A close friend of Florik's only surviving sister said she doubted that Florik, a self-made investor whose frugal ways were legend, would want hundreds of thousands of dollars going to anyone other than charity recipients.
"He did not care about money, but he pinched a penny harder than anybody, and didn't want it to be wasted," said Pam Ulrich, who attended church with the ailing 88-year-old Florence Florik and now cares for her. "What would an 80-year-old do with all of that money? I can't imagine that Frank would have gone along with that kind of a salary."
Lake said his foundation pay, which went from $110,000 in 2000 to $230,000 in 2001, has dramatically altered his lifestyle. And it has given him and his family a rare kind of retirement security. Once a $20,000-a-year federal agency employee, Lake and his wife moved from Lombard to Cary, Ill., where sprawling country homes offer sweeping river views. The couple can now afford long-term home health care, Lake said. And with some of his money, the retiree planned a trip for 10 relatives to Disney World this year. "I'm springing for everyone," Lake said. "The whole works. You only live once." Asked what he does to earn the money, Lake said: "I get mail every day. I look at it, and I put it away, or if I have questions I ask [the bank] about it." Among the projects he funded, Lake said, was a renovation of a parochial school his nephew attended. Lake said he will draw the same kind of pay until 2005, when the trust is set to dissolve.
"A lot of people thought I couldn't do this, see? I don't appear to be slick enough," Lake said. "But I fooled them. I fooled them all. When they say Mr. Lake, that means Mr. Lake. Nobody calls me Ed."