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The trustees' perk that keeps on giving

When the 14 part-time directors of the Herman Goldman Foundation gather for their monthly meetings, they have more to look forward to than the $12,000 annual stipend each of them receives.

That's because at one of their board meetings in 1993, the directors of the New York City foundation, which supports health care and other charities, voted to award themselves retirement benefits.

The pension award, worth up to $125,000 for each board member, and their heirs, is one case among many found by the Globe in which foundation directors, some working only a few hours a year, have dipped into assets intended for charities to award themselves retirement benefits and health care coverage.

``These are tax-subsidized dollars that could be going to charities, and that's a concern,'' said Daniel Borochoff, president of the American Institute of Philanthropy, a Chicago-based group that monitors charitable giving.

At the Beinecke Foundation in Greenwich, Conn., which funds environmental causes and the arts, John R. Robinson, a scion of the Beinecke family, received $280,000 in retirement benefits from 1999 to 2001, the last year for which the tax returns are available.

Haven A. Knight, a retired attorney and another member of the foundation board, said in an interview that he and Robinson also receive full health care benefits for themselves and their families, and defended those benefits as reasonable compensation for what Knight said was full-time work.

But the foundation's tax returns list Robinson and Knight as part timers. And when asked to describe his full-time responsibilities, Knight struggled to explain what he added to the work of the foundation's full-time office manager and an outside legal firm that billed the foundation $44,000 in 2001.

``We do a lot of phone work,'' Knight said.

The Goldman and Beinecke foundations are unusual but not unique. A survey taken earlier this year by the Council on Foundations, a Washington trade group, found that about 15 percent of independent and family foundations pay health care benefits, retirement benefits, or both to board members. The council said the ``vast majority'' of board members who take such benefits are part timers.

In extreme cases, the cost of such benefits can quickly drain foundation assets. At the Dallas-based Carl B. and Florence E. King Foundation, established by a Texas oil man to fund educational programs, the prospect of fiscal insolvency loomed after the foundation's president, Carl L. Yeckel, boosted his compensation to over $1 million, and that of the foundation's secretary, Thomas W. Vett, to about $500,000 in 2001. But the more serious threat to the foundation's future is a provision approved by Yeckel that would guarantee both men pensions equal to 75 percent of their top salaries starting at age 65, even though there is no pension fund to draw from.

Last year Yeckel resigned from the foundation and Vett was fired after the Texas attorney general's office discovered the excessive salaries and filed suit seeking to have the funds repaid. But Vett has sued the foundation, according to his attorney, Tad H. Keener, accusing the foundation of ``attempting to disavow a written contract.''

In and around California's Silicon Valley, the part-time directors of a number of small foundations - all the organizations sharing the same accountant - have continued to collect benefits even as their foundations' assets plummeted.

One of them is the Sara and Anders Kierulf Family Foundation, which was established in 1999 in San Carlos, Calif., but relocated to Utah when its sole trustees, Sara and Anders Kierulf, moved to Salt Lake City. The Kierulfs run the foundation out of their home, contributing to a variety of charities. They estimate they each spend 20 hours a week on foundation business for the $120,000 in salary that each of them takes.

They have also used foundation holdings to cover escalating medical costs for themselves and their three children. Last year, the foundation paid nearly $11,000 for the family's health care, up from $7,800 the previous year and $4,100 the year before that. Meanwhile, the foundation's assets dropped by almost a third - from nearly $6 million in 2000 to slightly more than $4 million last year.

The foundation's accountant, Martin Logies of Sunnyvale, Calif., defended the benefits, saying they had been approved by the foundation's board of directors. But he acknowledged that Sara and Anders Kierulf are the board's only members, and that they approved the benefits for themselves. As to the work the Kierulfs perform for their pay, Logies demurred. ``I couldn't give you that information,'' he said.

Some foundation officials are reluctant to describe a benefit paid to part-time board members as a perk. At the Herman Goldman Foundation in New York, where the part-time board awarded itself retirement benefits, 12 of the 14 current board members are practicing or retired attorneys associated with the law firm of Brauner Baron Rosenzweig & Klein.

David R. Kay, the foundation president and a Brauner Baron attorney, acknowledged that the law firm provides him with retirement benefits, but said the additional $125,000 benefit that he or his heirs may collect from the foundation is justified by his work there. ``There's no linkage whatsoever between the retirement plans,'' he said.

Michael Rezendes can be reached at

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