When Leona Helmsley died, it wasn’t exactly a national day of mourning. The billionaire real estate mogul was known as the “Queen of Mean,” and was often depicted as a symbol of Reagan-era excess. Once, when asked how much she paid in taxes, Helmsley was famously quoted as saying, “We dont pay taxes. Only the little people pay taxes.” A few years later, she served 18 months in federal prison for multiple counts of tax evasion; the New York Times, an inveterate critic, posthumously described her as “a symbol of unbridled arrogance and belief in entitlement.”
Her indictment was widely popular, but it also brought together unlikely allies in defense of what they saw as a politically motivated prosecution. Her legal counsel included Alan Dershowitz, a prominent left-wing law professor at Harvard, and Robert Bork, a Supreme Court nominee of Ronald Reagan. To this day, Bork believes that Helmsley was convicted of crimes largely committed by her husband. Bork further insists that by “little people” Helmsley was referring to her accountants—not edifying, to be sure, but not elevating herself above the law, either. Being rich and cantankerous isn’t a crime, but in Helmsley’s case Bork suggests a guilty verdict in the court of public opinion ultimately convicted her in a court of law.
When Helmsley died in August 2007, the media zeroed in on the aspects of her will that reflected her eccentric and unpleasant demeanor. She left $12 million to her pet Maltese terrier, Trouble, while she expressly wrote two of her grandchildren out of her will “for reasons that are known to them.” In a stunning act of generosity, Leona Helmsley left nearly her entire estate, valued between $5 billion and $8 billion, to the Leona M. and Harry B. Helmsley Charitable Trust.
By the time of Leona Helmsley’s death, the Helmsley family had been significant philanthropists for over half a century. In 1954, Harry Helmsley founded the Harry B. Helmsley Foundation. The foundation, later renamed the Leona and Harry B. Helmsley Foundation, gave to a wide variety of causes, but had a special interest in medical research and health care. Harry Helmsley died in 1997, and his will mentioned the Leona M. and Harry B. Helmsley Charitable Trust. The trust was in turn formally established by Leona in 1999. Harry Helmsley had no children and left virtually his entire estate to Leona. By all accounts, she had authority to direct the creation of the charitable trust as she saw fit.
Helmsley composed a two-page “Mission Statement” on March 1, 2004, which indicates that the charitable trust should be directed to “purposes related to the provision of care for dogs; and such other charitable activities as the Trustees shall determine.” (An earlier mission statement, dated September 16, 2003, is virtually identical, but also includes “purposes related to the provision of medical and health care services for indigent people.” It was explicitly revoked by the later mission statement.) Crucially, Helmsley’s various mission statements were never formally incorporated into the terms of the charitable trust.
As far as animal charities were concerned, a windfall from the Helmsley estate was entirely welcome. “[It] would be absolutely wonderful,” says Jodi Smith, a senior advisor to the president of the Humane Society of the United States. “Everyone in America knows about the problems of pet overpopulation and the need for spaying and neutering, puppy mills, dogfighting. The list goes on. These are very urgent issues, and Leona’s largess would go a long way toward helping these problems.”
Two years after Helmsley’s death, however, and months after the Helmsley Charitable Trust’s first disbursement of $136 million in April 2009, animal- and canine-related charities have seen very little of that largess, despite Helmsley’s mission statement. “Right now,” says Smith, “the trustees have awarded approximately $1 million out of the $136 million to canine-related organizations and, in fact, only $100,000 to dog-welfare organizations. That’s less than 1 percent. That’s clearly not the special emphasis Leona wanted.”
A Legacy of Medical Giving
Perhaps. It is uncomfortably true that, as one expert puts it, that “the history of modern American philanthropy is the history of foundations looking for ways to get around their founders’ intent.” But it is not clear that the trustees of the Helmsley Charitable Trust have in fact violated Helmsleys wishes. Discerning Leona Helmsley’s intentions can be awfully complicated.
In the wake of criticism from the animal-welfare community, the trustees have pointed to the black-letter text of the trust itself, rather than to the legally dubious mission statements. The Helmsley Trust has posted the following statement on its website:
Between 1999 and her death, Mrs. Helmsley signed a number of documents relating to the Trust, including several amendments and two so-called “mission statements.” The totality of these documents clearly provided that the trustees—in the language of the document establishing the Trust—“may, in their sole discretion, distribute the net income and principal of the Trust Fund to and among such one or more Charitable Organizations and in such amounts or proportions as the Trustees, in their sole discretion, shall determine.”
That [according to the trustees] is the language of the Trust itself—not a characterization.
Despite the authority which they believe they were granted in the “totality of these documents,” the trustees still proceeded cautiously. “We chose,” the trustees further explain, “to act not simply on our reading of the operative language, but with the full imprimatur of the law.” In October 2008, the Helmsley Trust put the issue before the court. New York state law allows for a process to receive “advice and direction” on trustee issues from the Surrogate’s Court. On February 19, 2009, Troy K. Webber, the judge overseeing the probate of Helmsley’s estate, agreed. His ruling found that “the trustees may apply trust funds for such charitable purposes and in such amounts as they may, in their sole discretion, determine.”
Two years after Helmsley’s death—and only after the ruling—did the Helmsley charitable trust announce its first round of charitable gifts. While it is true that a very small amount of the $136 million went to canine-related charities, about $115 million of the total went to medical research—a cause that Leona Helmsley and Harry Helmsley enthusiastically supported for decades through the Leona and Harry B. Helmsley Foundation. The last point bears special consideration. The foundation was a long-time supporter of medical research and healthcare charities. Among its charitable donations were significant contributions to (among others) the Alzheimer’s Association (including a grant to pioneer the Alzheimer’s tracking bracelet), the Helen Keller National Center for Deaf-Blind Youths, the American Red Cross (including $5 million for Hurricane Katrina victims), the Greenwich Hospital (for the Leona and Harry B. Helmsley Medical Building), and the Juvenile Diabetes Research Foundation International.
In fact, the Helmsleys directed many of their largest gifts to medical research and health care. Over the years, they donated over $71 million to the New York–Presbyterian Hospital/Weill Cornell Medical College. Their contributions expanded capacity among medical and research teams in several medical specialties, including cardiovascular disease, rehabilitative medicine, and digestive diseases. In the summer of 2006—in the last gift made during Leona Helmsleys life—the trust awarded $25 million to establish a comprehensive center for digestive diseases at the hospital. Today, the Leona M. and Harry B. Helmsley Center for Colon and Rectal Surgery offers diagnostic, medical, and surgical treatment for patients suffering from gastrointestinal diseases, and convenes specialists to develop best practices and explore effective new treatments.
Also worth noting is the fact that Helmsley’s donations to medical research and health care vastly outweigh her donations to canine-related charities. “Mrs. Helmsley was not known for reticence,” the trustees have noted. “Here, her actions spoke as clearly as the words of the Trust documents. In the eight years between the formation of the Trust and her death, Mrs. Helmsley contributed (as the sole trustee of this Trust and otherwise) over $55 million to charitable causes; of that amount, she made only one gift to a dog-related charity, for $1,000.”
“Even more telling is this,” the trustees continue. “The claim that the Trust was established for dog-related purposes relies on a document entitled ‘Mission Statement’ signed by Mrs. Helmsley in 2004. Between her signing that document and her death—during which time she alone controlled the trust—Mrs. Helmsley and the trust gave over $29 million to charities; of that, the amount she and the Trust gave to dog-related charities was exactly zero.”
Explicit but Non-Controlling
And yet, Helmsleys March 2004 mission statement—with its explicit endorsement of “purposes related to the provision of care for dogs”—remains. Its existence lends plausibility to the argument that the trustees of the Helmsley trust are violating the spirit, if not the letter, of Leona Helmsley’s wishes. Many animal-welfare groups certainly see it that way. “The trustees went to court basically to get a ruling that they didn’t have to give to dog welfare charities,” Smith says. “And we never had an opportunity to participate in that hearing so were reviewing everything now.” Smith further tells Philanthropy that the Humane Society has not ruled out the possibility of pursuing legal action against the trust.
The trustees take strenuous issue with such claims. “Did Leona Helmsley,” they ask, “intend for this charitable trust to focus on the care and help of dogs, rather than people? Absolutely not. Have the trustees of this vast fortune acted improperly and ignored Mrs. Helmsley’s instructions? Again, absolutely not.”
On the one hand, Leona Helmsley left a mission statement that clearly indicates an emphasis on the care and welfare of dogs; but, just as clearly, the same mission statement is legally inoperative—and it simultaneously gives the trustees broad latitude for independent action. On the other hand, Leona Helmsley’s history of charitable givingincluding her charitable giving after the mission statement was composed—reflects no special concern for canine-related charities.
If anyone is to blame for the confusion over the charitable intentions of Leona Helmsley, it is Leona Helmsley herself. Her donor intent is, at best, ambiguous. It seems that her charitable legacy will be as conflicted as her life and work. It’s a salutary reminder to living donors: make certain your intent is clear, and create safeguards to preserve it.
“A Cudgel against Donor Intent”
The saga of the Helmsley Charitable Trust has become more than another cautionary tale about the need for donors to explicitly clarify their philanthropic wishes, lest a probate court do it for them. The details of the Helmsley trust have been widely cited to call for new laws advocating tighter regulatory control of private philanthropy. From the beginning, the case was “used as a cudgel against donor intent,” says William Schambra, director of the Hudson Institute’s Bradley Center for Philanthropy and Civic Renewal.
The media coverage of Helmsley’s estate certainly did not help. Reports largely repeated the narrative that Helmsley’s concern for dogs was the product of a difficult and eccentric person, one who was largely insulated from real-world concerns. A survey of the news stories shows the story was handled lightly. One NBC news report featured seven groan-inducing puns: Helmsley’s grandchildren were not even “thrown a bone,” the trustees “announced how they’d be spending the initial portion of kibbles and bits,” the trustees were “barking that what she’d done in her will was for the dogs,” etc.
In July 2008, when the initial details of Helmsley’s trust emerged and news accounts were suggesting that the bulk of the trust would be going to canine-related causes, Ray Madoff penned a widely disseminated op-ed for the New York Times. A law professor at Boston College, Madoff has long advocated capping the charitable deduction for estate tax purposes. She seized on the details of the Helmsley estate to renew her case.
“The charitable deduction constitutes a subsidy from the federal government,” Madoff wrote. “In Mrs. Helmsley’s case, given that her fortune warranted an estate tax rate of 45 percent, her $8 billion donation for dogs is really a gift of $4.4 billion from her and $3.6 billion from you and me. To put it in perspective, our contribution to Mrs. Helmsley’s cause equals approximately half of what we spend on Head Start, a program that benefits 900,000 children.” Madoff added that the chief benefit from Helmsleys estate would be an “eternal monument to Leona Helmsley’s generosity toward dogs.”
Schambra, by contrast, believes that a strong case could be made for honoring Helmsley’s wishes as a matter of funding a worthy and needed charity, regardless of whether the trustees are legally bound to do so. “You always have to defer to the donors intent,” he says. “Donations for the humane treatment of animals and children are explicitly included as charitable purposes in the Internal Revenue Code, for crying out loud. It’s not like this is some bizarre, marginal thing.”
Further, the numbers certainly suggest that animal welfare is an issue about which Americans care a great deal. At a September 2008 panel discussion with Madoff, co-sponsored by the Bradley Center for Philanthropy and Civic Renewal and the Chronicle of Philanthropy, Les Lenkowsky, director of graduate programs at the Indiana University Center on Philanthropy, noted that Americans spend $50 billion annually on pet care. A 5 percent annual payout on an $8 billion trust would amount to spending less than 1 percent of that amount on animal charities.
Lenkowsky also pointed out that comparing the Helmsley trust to Head Start is highly misleading. “When I was in office,” he said, “we tried to count [the number of federal child welfare programs]. We came up with over 300 programs run by the federal government trying to aid disadvantaged children. So the amount we spend on ‘preventing cruelty to children,’ so to speak far exceeds what we spend on pet care.
As conflicted as the Helmsley case is, it could end up underscoring the need to preserve the right of donor intent. After reviewing the Helmsley case on his blog, Nobel Prizewinning economist Gary Becker wrote, ”Respecting individual preferences, no matter how idiosyncratic, is one important measure of free society, even when those tastes relate to bequests and inheritances.“
Mark Hemingway is a freelance writer in Washington, D.C.