Besides traditional activism such as politics and writing and speaking, on occasion intellectual entrepreneurs try to find more innovative and creative ways to work for a free society. Examples include various forms of “new libertarian nation” projects (like Patri Friedman’s Seasteading Institute, and the Free State Project), as well as the idea of subscription-based patrol and restitution advanced by Guillory and Tinsley, or Stephen Fairfax’s ingenious proposal presented at Austrian Scholars Conference 2010, “Returning Gold to the Consumer Marketplace” (discussed here).
Along these lines, I’ve been fascinated with an idea I got when I read about an utterly fascinating legal squabble way back in 1996 or so when I lived in Philadelphia. This concerns the infamous Holdeen Trusts, and a series of cases and legal disputes centered around same. An article about it in the Philadelphia Inquirer caught my notice because it concerned the efforts of an eccentric millionaire New York lawyer, Jonathan Holdeen, to set up a series of trusts that would one day totally wipe out taxes, at least in Pennsylvania (see also The Holdeen Funds, by Rajan Mylavaganam, below).
Holdeen set up a labyrinth of trusts in Pennsylvania in the 1940s and 1950s, lasting for hundreds of years, with the accumulated trillions of dollars to be eventually used to endow and completely fund the operation of the government of Pennsylvania. He chose Pennsylvania, believing that that state’s laws were most favorable to the validity of such trusts. Holdeen “modeled his plan somewhat after that of the thrifty Benjamin Franklin who limited himself ot two hundred years (1790-1990).” (Holden v. Ratterree, 270 F.2d 701 (2d Cir. 1959); see also Holdeen v. Ratterree, 190 F.Supp 752 (N.D. N.Y. 1960); In re Trusts of Holdeen, 486 Pa. 1, 403 A.2d 978 (1979).)
Unfortunately, in 1977, a “judge ruled invalid a plan Holdeen had dreamed up to make Pennsylvania’s the first tax-free government in the history of the world.” Over the years, Holdeen deposited $2.8 million in several charitable trusts for the benefit of Pennsylvania. “His plan was to let the trusts grow, and to keep plowing the investment income back into them, for 500 to 1,000 years. Since charitable trusts are tax-exempt, the pool of money would become immense.”
By Holdeen’s calculations, the trusts would contain quadrillions or quintillions of dollars after a few centuries – more than enough to pay all the expenses of Pennsylvania government. All state taxes could then be abolished, and Pennsylvania would be a tax-free model for the world.
The Internal Revenue Service pounced on the plan right away. The tax agency saw it as an elaborate scheme by Holdeen to avoid taxes and to benefit his family.
[…] From the 1940s to the 1970s, Holdeen and his heirs battled with the IRS over the validity of the charitable trusts. In the end, the IRS lost. The U.S. Tax Court ruled in 1975 that the trusts were legitimate.
But a separate legal fight had developed in 1971 in Orphans Court, which has jurisdiction over trusts and estates in Pennsylvania.
To try to make his plan conform with legal requirements, Holdeen had named the Unitarian Universalist Church as a beneficiary of charitable trusts, with the understanding that the church would get a tiny portion of the yearly trust income.
While Holdeen was alive, church officials consented to the arrangement. After his death, the church filed suit in Orphans Court seeking all the income. Its lawyers contended that piling up money for 500 or 1,000 years was unreasonable and potentially dangerous.
Eventually, the church argued, the Holdeen trusts would soak up all the world’s money, and Jonathan Holdeen’s descendants, who were to remain in charge of the trusts, would have unimaginable power.
In 1977, [Judge] Pawelec ruled in favor of the church, concluding that Holdeen’s scheme was ‘visionary, unreasonable and socially and economically unsound.’
From then on, income from the trusts, which had grown to more than $20 million, was paid to the Unitarian Church at about $1 million a year.
My idea is that a similar idea could be used to set up some kind of trust that, in time, could accumulate billions of dollars in assets, that could be used to fund a massive anti-state think tank/activist center. The appropriate state or country to be used as a base would have to be investigated, but it could be seeded with a very small amount of money. Suppose it was seeded with $1000. Then over time, it would grow to some arbitrarily large size. It might take 300 years, but so what?–our activist efforts are aimed at the long term and the future anyway. The trust instrument could specify criteria for when the principal, the trust corpus, could start being used–say, when it reaches $500B (inflation-adjusted).
The Holdeen Funds
by Rajan Mylavaganam
(pasted here from the archive version)
In this paper1 I will inquire into the establishment of the Holdeen Funds and the management of these trust funds by the Unitarian Universalist Association of Congregations (UUA), the nominal beneficiaries so designated by the benefactor, Jonathan Holdeen. The Holdeen Funds have been represented to the Internal Revenue Service and promoted to the public by the UUA as intended for the impoverished people of India. Was this the original intent for the Funds, and have these intentions been respected?
I shall seek to show that there are serious discrepancies between the manner in which the income from the Holdeen Funds are being expended and their ascribed purposes. These manipulations may be serious enough to raise questions about the financial morality of the individuals responsible for administering the Holdeen Funds. Has the Board of Trustees of the UUA contravened the legal limits of the Holdeen Funds in the appropriations for the year 2000? This and other equally contentious questions will be asked throughout this paper and efforts made to answer them. Perhaps it is appropriate to begin by asking, “Who is Jonathan Holdeen?” and “What are the Holdeen Funds?”
I first heard mention of Jonathan Holdeen at Meadville Lombard Theological School, Chicago, Illinois where I had enrolled as a Doctor of Ministry candidate in September 1988. A seminary colleague of mine, on hearing of my interest in Indian Unitarians, contributed that a man named Jonathan Holdeen had left a considerable sum of money for “the poorest of the poor in India.” 2 I thought to myself, “How nice that Mr. Holdeen had left all this money for the poor people of India.” It affirmed my choice to be a Unitarian and I congratulated myself for having made the wise choice of becoming a student at a Unitarian seminary.
I discovered that the UUA is a liberal religious organization that has some 200,000 members and 1003 congregations; and is the result of a merger between the American Unitarian Association and the Universalist Association. While small in numbers the Unitarian Universalists (UU) have had a far greater political representation in proportion to their numbers in the formal politics of State than most denominations. They are noted for taking bold social positions and are usually at the forefront of political, social and religious controversies that come before change and have been so since their inception in 1825. (See Chapter on William Roberts).
I skipped my second year at seminary to find out more about my new religious home by beginning a ministerial internship at the May Memorial Unitarian Society, Syracuse, New York. My training included conducting church services one Sunday a month. On one such Sunday, during the congregation’s response to my sermon on Indian Unitarians,3 I learned that Jonathan Holdeen had been a familiar, if somewhat eccentric, figure in Syracuse. From that time on I have noticed brief mentions of the Holdeen Fund in the UUA’s annual directory. There was, however, very little real information on Jonathan Holdeen or the Holdeen Funds, and not many were willing or able to speak knowledgeably on the subject of these Funds. In fact a recent request for information from International Office at the UUA drew this response from their Director, the Reverend Olivia Holmes, “Holdeen has nothing to do with your subject as far as I can tell.”4 The response seemed unusual given the huge amounts of Holdeen Fund moneys that were being spent by the UUA, and all of it in the name of the impoverished people of India.
It is now no longer difficult to access information on non-profit, charitable organizations that seek public financial contributions.5 In an article posted on the World Wide Web in October 1996 Chuck Shepherd, editor and compiler of the column, “News of the Weird,” wrote,
The Unitarian Universalist Church and heirs of Jonathan Holdeen settled their 20-year-old dispute on the disposition of Holdeen’s estate, which was created in 1945 as a series of trusts that eventually would have amassed so much money they would have allegedly have funded the entire federal government and rendered taxation unnecessary. In fact, the Church which was a nominal beneficiary of the trusts, argued for their abolition in 1977 on the ground that they would soak up so much of the world’s money that the administrators of the trusts would become too powerful.6
Shepherd compiled his column from actual news articles, and readily provided the source of the report upon my request. As it turned out the primary reporter for the stories on Jonathan Holdeen and the trusts he created was L. Stuart Ditzen.7 Ditzen reported on the court hearings between the UUA and Janet Adams Holden, Jonathan Holdeen’s daughter, in the Philadelphia Inquirer.8 These reports, along with United States Tax Court Reports,9 Form 990s filed by the Holdeen Funds10 make up the primary non-UUA sources for this paper. The majority of other sources for this paper come from UUA postings on the World Wide Web.11 The other significant organization whose record was examined for this paper is the Liberal Religious Charitable Society Inc.,12 a non-profit organization that is associated with the UUA.
The biographical material on Jonathan Holdeen presented here is culled from U.S. Tax Court reports.13 (This strange man did not even warrant an obituary in the New York Times).14 The court reporting reveals that Jonathan Holdeen was born Jonathan Holden in Sherburne, Chenango County, New York on 16 September 1881. He attended Colgate University until 1901. Upon graduation he worked in the law office of his father Stephen Holden before being admitted to the New York State bar in 1903. After gaining experience examining land titles at Title Guaranty & Trust Company in New York City he opened his own law office in Pleasantville, New York. He engaged more in business than practiced law, and during his lifetime built up considerable real estate holdings.
In 1932 he established an office in Poughkeepsie, and except for a brief spell of several months in 1940, he resided in Pine Plains until 1961. On the death of his wife, Stella Hamblen, he moved back to his birthplace, Sherburne, New York. From 1964 until 1967 Holdeen was the owner and resident of Onandaga Hotel in Syracuse, Central New York.15
Holdeen married Stella Hamblen in 1910 and by 1957 they had ten children and twenty-five grandchildren.16 In 1931 Jonathan changed his surname from Holden to Holdeen in an apparent attempt to distinguish his family as ” the Northern Westchester branch of the family.”17 The Court records the fact that other members of his family refused to change their names and his wife continues to be referred as Stella Holden in the Court’s reports.18 Jonathan Holdeen died on 14 June 1967 in relative obscurity, without as has already been noted, even getting a mention in the New York Times obituary column. This was incredible given that he invested large sums of money in a practical effort to rid the world of taxation.
Holdeen was motivated in his unusual plans for the governments of the world by Benjamin Franklin. As Holdeen noted in his article, “Should Thrift be Nationalized?”, which was published along with other papers by Oswego Press, Cooperstown, New York.19
One of the first American statesmen performed an act which is suggestive of possibilities. When Benjamin Franklin died, it was found that besides providing for his children, he had made a number of philanthropic bequests out of his modest estate, two of which were unusual. He gave two funds of five thousand dollars each, one for Philadelphia where most of his life was passed and the other for Boston which was his native city. These funds were directed to be invested by being loaned to apprentices, starting in business for themselves, at 5% interest. The income was to be accumulated for one hundred years when the greater part of each fund was to be expended in providing some building or public work for the betterment of each city. As might be expected from the character of the investments, there were some losses. Nevertheless at the end of the century, Franklin’s Philadelphia fund is said to have increased from $5,000 to $450,000. There was a delay of some years while the citizens debated what to build with the fund. Meanwhile it increased to something like $650,000. The Boston fund has a similar history.20
An interesting afterword to Franklin’s wish for posterity was that the Massachusetts Legislature in 1958 tried to expropriate Franklin’s Boston Fund,21 and Holdeen “printed and sent to the members of the Legislature a protest against such action”.22
Holdeen opined that society in general would not address such questions as frugality and thrift and decided that it was possible that an individual had “it in his power to set in train, a process which will contribute more forcefully to that end than exhortion”.23 He set out to be that individual by entering into “some 186 agreements with his adult daughters or friends.”24 He maintained the principle of providing for his family first, including his children, nephews, nieces and grandchildren, with a part going to charity. This would later become one of the contentions raised by lawyers for the IRS, and the UUA’s lawyers, in efforts to breakup the Holdeen trusts. The experts testifying for the UUA argued that the trusts created by Holdeen’s scheme were a plot to empower and enrich his family out of all proportion to what can be considered appropriate and beneficial to the issue of a tax free environment in Pennsylvania.25 Holdeen had named tax exempt organizations including the American Unitarian Association as the nominal beneficiaries,26 anticipating such challenges from the IRS who saw his schemes as an elaborate effort to avoid taxation. Holdeen could not have anticipated the AUA’s merger with the Universalists or that the succeeding organization, the UUA, would not live up to his expectations of financial morality. The leaders of the UUA whom Holdeen chose over his family or the State would eventually betray his faith in them, as I shall demonstrate through this paper.
Holdeen’s trusts were simple in their concept and in the math. In designing his scheme Holdeen set aside a total of $2.8 million in varying sums and at different times, stipulating that the income from the investments be allowed to accumulate. After a period of five hundred years, and in some instances a thousand years, the principal and accumulated income was to be paid to the State of Pennsylvania.27 Pennsylvania could than use the income to pay for the necessary expenses of government. At least that was Holdeen’s plan, if it had survived. But we will never know, thanks to the UUA.
As early as 1913 Holdeen willed that a portion of his estate be used to promote his ideas, encouraging the nations of the world to accumulate enough income to meet expenses of government without a requirement for taxation.28 Was he already moving past his mentor Benjamin Franklin who is thought to have coined the saying, ‘Only death and taxes are inevitable’? Holdeen, perhaps hearing an echo of Benjamin Franklin’s claim, may have decided to prove his hero wrong on at least one of the two counts. He wanted to make Pennsylvania the first state in the Union that would not have to depend on taxation for its operations even if Pennsylvanians would have to wait 500 to 1000 years to realize their dream.29 Questions were raised about his efforts. Was Holdeen being prophetic and seeking to challenge conventional wisdom, or was he merely participating in the tried and true American pastime of avoiding personal taxation as charged by the IRS? Or was he seeking to assure his family unimaginable power over the people of the world, as charged by the UUA? I have not had the opportunity to peruse Holdeen’s writings30 and cannot provide conclusive answers to these questions at this time. What I can do is assure the reader that Holdeen was serious about his commitment. In 1932 when the market value of the entire real and personal property in the world was less than one trillion dollars,31 Holdeen provided specific formulas for the implementation of his plans to abolish taxation.
Holdeen was aware that his was an experimental idea and would be subject to challenge. He conceded that “the history of the past, with its records of invasions and revolutions proves that … an accumulated endowment … created two thousand years ago …would not (have) survive (d)”32 to 1912. Yet Holdeen was persuaded that advances that had been made in successive civilizations made it possible for futuristic thinking on his scale. He was sufficiently convinced that the time for his plan to eliminate waste and provide future leaders with resources to do the work of government was at hand. Holdeen believed that the inhabitants of the earth had reached “a stage of civilization when vested property rights will be unmolested even in case of conquest, unless they unusually conflict with the common welfare”.33 Holdeen cited the example of William of Wickham and his endowment for Winchester College, England in 1393,34 which had withstood the test of time, as a model for his faith in his system. Holdeen’s effort to follow his vision for the fiscal independence of the governments of the world was, however, challenged from two quarters, the IRS and the UUA. His efforts to defend the trusts occupied him, and after he died in 1967, his daughter, Janet Holden Adams, for the better part of fifty years.35
To accomplish his goal Holdeen put money over the years into a number of trusts and made the American Unitarian Association and other non-profit organizations the nominal beneficiaries, with control in the hands of his descendants and the final beneficiary the State of Pennsylvania.36 It was part of the plan that the AUA use their portion of income to assist the natives of India, their descendants and Asians in general.37 As soon as Holdeen died challenges were made to the trusts. No one seemed to like the scheme, except perhaps the taxpayers of Pennsylvania:
The government of Pennsylvania didn’t like it; the Internal Revenue Service absolutely loathed it. And the national Unitarian Universalist Church of Boston [sic], which played a key role in Holdeen’s plan, disapproved one part of it – the part that set aside earnings of the trust for Pennsylvania. The church wanted the money, instead, but did not declare that until after Holdeen died in 1967.38
The first challenge to his unorthodox vision came from the Internal Revenue Service which, not unexpectedly “waged a 30-year legal battle to prove that the trusts were part of an elaborate scheme by Holden [sic] to avoid taxes and benefit his family.”39 Jonathan Holdeen, succeeded by his daughter, Janet Holden Adams, successfully staved off the challenge of the Commissioner of Internal Revenue. In 1975 the judge held that the trusts initiated in 1945 were legal and “had no taxable incomes in the years involved.”40
This was not the end of Holdeen’s problems. The UUA now took their turn at breaking the trusts.
The Court reports indicate that Holdeen, based on correspondence he had with Percy W. Gardner, had on 8 November 1944 invited the AUA to participate in his financial plan. In his letter he had specifically offered the AUA the opportunity to make any revisions.41 At that time the American Unitarian Association agreed with and gave legitimacy to Holdeen’s plan in return for a small portion of the income from his scheme. The participating of a non-profit charitable organization was necessary for Holdeen’s scheme to conform to Pennsylvania’s law since Pennsylvania was one of the few States to permit this type of idea. More importantly, the AUA had no objections to any of this in 1944. The UUA, successor organization to the AUA, did not agree and upon Holdeen’s death in 1967 began legal proceedings to get all the money. Ditzen headlined one of his articles:
“DREAM TO END TAXES NOW A NIGHTMARE (-) LAWYER WANTED TO USE INCOME FROM TRUST FUND TO RUN PENNSYLVANIA; CHURCH FIGHTS FOR MONEY.”42
Nor was the State prepared for Holdeen’s plan. As Ditzen observed the “Pennsylvania attorney general’s office stood with the church.”43
The UUA argued through its lawyers that “piling up money for 500 and 1,000 years was an unreasonable and potentially dangerous”44 activity for a charitable trust. Under the sub-heading, “Doomsday Predictions” the newspaper commented: “During the drawn-out proceedings in Orphans Courts in the 1970’s church lawyers presented experts who made hand-wringing predictions about the fast-growing Holdeen trusts.”45 Holdeen’s plan was once again under attack – this time from the very Church that had agreed to legitimize it. The UUA’s lawyers presented experts to persuade Judge Edmund S. Pawlec that the trusts if allowed to “continue for hundreds of years … would balloon so large that they would sponge up all the money in the world.”46 One economist declared “that the trusts would grow so big that ‘they [Holdeen’s descendents] would absolutely own the world’.”47 Another direly predicted, “Any time you wanted to make a telephone call or take a trip … you would be paying money to the Holdeens. … And everyone in the world would work for the Holdeens’.”48 The Holdeen family countered by presenting Gardner Ackley, former chairman of the president’s Council of Economic Advisers, as their witness: “Ackley scoffed at the Church’s experts. He testified that Holdeen’s notion was a good idea.”49 Ackley’s testimony was not sufficient to sway the judge’s opinion. Judge Pawlec found Holdeen’s plan to be “contrary to public policy”.50 In his 1977 opinion Judge Pawlec wrote:
The expressed purpose [of the plan] is so visionary, unreasonable and socially and economically unsound that we must conclude the entire plan is charitably purposeless, contrary to public policy and hence void.51
Two years later the Pennsylvania Supreme Court upheld the Judge’s opinion and the Holdeen trusts were broken.52
The portions of incomes from the trusts due to accumulate toward Holdeen’s grand objective of a tax free Pennsylvania was now to be turned over to the UUA. The UUA, which had been invited to participate in Holdeen’s long range vision to alleviate the burden of taxation in return for one five-hundredth of the income was now to receive “all the income of the trusts, past and future.”53 Janet Holden Adams was still the trustee and was not ready to give up the ghost. It must have been difficult for a daughter to see her father’s dream end in this way. She responded by holding back the trust income to the UUA.54 “And she started giving money to other charities. ‘Once they broke the trust, I figured, heck’, she says by way of explanation. ‘I wouldn’t give them a nickel if I had a choice’.”55
The UUA proceeded to bring lawsuits against Janet Holden Adams that lasted for 20 years. The legal battles could have ended here but unfortunately for Janet Holden Adams, who was now 82, the UUA began accusing her of “mismanagement, self-dealing and fraud … [and] demand[ed] $12 million in damages.”56 Adams’ lawyers countered by saying that the trusts under Adams’ care had done very well. Her investment strategy had outperformed the stock averages for Dow Jones and Standard & Poor. “And they earned huge dollops of income – money that was intended to endow Pennsylvania but that has been paid, instead under court order to the church.”57
The UUA had been unremitting in its efforts to challenge Janet Holden Adam’s management of the trusts. Their lawyers, no less aggressive, had charged $932,000 by March 1994, to be paid out of the Pennsylvania trusts.58 The Church apparently had been transformed during this process and began behaving as “the IRS had done in the 1940’s and 50’s and 60’s, [sending] accountants to scrutinize the books and records”.59 Yet by 1986 the UUA had apparently backed off from their difficult position, with lawyers for the Church telling Judge Pawlec that they were satisfied with the way the trustees had managed the investments.60
Three years later, however, the UUA sent its lawyers out again demanding that the trustees be changed, and Adams resigned in 1989. This did not stop the lawyers for the UUA from summoning her three times to Philadelphia from her home in Pine Plains, New York “for a total of 13 days of depositions in which they have grilled her on the details of 45 years of investments.”61 Even the judge was beginning to express concerns about the legal battles in his courtroom. In a conference in 1992, Judge Pawlec called for a limit in some fashion to the burgeoning legal fees, adding, “We have to use some kind of common sense in trying to bring this to a resolution.”62 The dispute was finally settled in 1996 without a trial. The UUA became the sole and undisputed distributors of the income from the trust that Jonathan Holdeen had established. By 1996 the UUA had “received $21.9 million [and] the income continues to flow at the rate of $1 million a year”.63 The UUA was now in charge, receiving trust income from a bank in Philadelphia.
Listed below are excerpts from six Form 990’s filed with the Department of the Treasury, Internal Revenue Service, by First Union National Bank (as trustees) for the Holdeen Funds and the income received by the UUA for 1999:
Fund Number UUA’s Income
Holdeen Fund 45-10 $258,423
Holdeen Fund 50-10 $75,128
Holdeen Fund 46-10 $25,973
Holdeen Fund 47-10 $933,130
Holdeen Fund 54-120 $61,963
Holdeen Fund 55-10 $339,00664
In each of these filings with the IRS the response to the question, ‘Purpose of grant or contribution’ (Part XV 3A) is,
For endowment or other use in aid of maternity, child welfare and educational and migration expenses of natives of India [or Asia] and their descendants.65
The IRS documents provide final confirmation that the Holdeen Funds are inextricably linked to the people of India, their descendants and Asians in general.66 Holdeen India Program (HIP) which operates out of the Washington, DC office is perhaps the least arbitrary of the UUA’s efforts to fulfil its trusteeship. HIP claims, and I have no reason to doubt this claim, to be assisting the most impoverished groups in India in a direct way in areas of greatest need. HIP works through registered voluntary Indian organizations sympathetic to HIP’s aims.67 Katherine Sreedhar, Director of HIP, writes, “We are in India to increase people’s power, to help them improve their livelihood and their quality of life.”68 Some of the groups receiving assistance from HIP:
- Self-Employed Women’s Association, a self-governing union founded in 1971 with a current membership of over 30,000. SEWA runs a cooperative bank, a self-funded social security plan, and various income-producing ventures, and has advocated for policy changes for unorganized sectors of society.
- Deccan Development Society promotes village self-help through cooperative women’s groups called sangams. Now there are more than 30 sangams which have made over 200,000 rupees available for short-term loans to help support change in farming communities.
- Annapurna Mahila Mandal is building a women’s center, and helping secure bank credit for the thousands of women who support themselves by preparing meals for unattached men who left their villages and families to seek work.
- Vidhayak Sansad attacks the problem of bonded labor, when a debtor is forced to pay off a landlord’s loan by working exclusively for the landlords. Such people have no right to bargain, strike, or leave; though bonded labor was technically outlawed in 1976, more than 2 million people are still in its thrall. Vidhayak Sansad trains people to seek their freedom, teaches them how to avoid debt, and has developed employment projects for newly freed laborers, displaced tribals, and other ‘untouchables.’
- Mahiti helped villagers in a perennially drought-stricken area design and build an innovative rain collection project, so that people and cattle can survive and thrive in areas where disease and fighting over life-saving water was the previous order of the day.
- Shakti Shalini’s focus is on preventing dowry deaths,69 as well as dowry harassment cases, divorce, and violence against women. A dowry death occurs every 36 hours in New Delhi. Currently, the program offers housing for eight women and their children, as well as legal aid, job training, medical care, child care, counseling, and room and board for up to three months.
Sreedhar informs me71 that these programs which commenced in 1984 are of great benefit to the people who receive the support. Recently the Holdeen India Program scored a coup when the Robert Kennedy Foundation honored Martin Macwan, a Holdeen partner, with its Human Rights award on 21 November 2000.72 In the wake of the recent earthquakes in Gujarat the HIP provided additional support for the victims through their partner organizations. “The UUA Holdeen India Program is providing up to $100,000 in special grants to its partners in Gujarat”.73 All of these are indeed commendable and helpful activities initiated by HIP and paid for by Jonathan Holdeen’s generosity.
There are other interactions that have (based on reports on the World Wide Web on various trips to India) become an issue in this paper because the HIP is frequently mentioned in association with these visits. In these interactions the financial integrity of the UUA and the implications for the Holdeen trusts is less clear. These brief trips74 by UU ministers and related persons to visit HIP related programs in India which, if they had been paid for out of the Holdeen trusts, would create moral concerns of a financial nature since they would be incongruent with Holdeen’s sense of frugality and thrift.75
During his presidency of the UUA John A. Buehrens has made frequent references to the various programs supported by the Holdeen trusts: “We’ve [Denny Davidoff, UUA Moderator?] travelled to India … ; to Belfast for the IARF; and to Beijing for the World Conference on Religion and Peace to talk … about religious freedom and human religions; to the Parliament of World’s Religions (Cape Town?) and even to meet the Pope — …”76 Is it reasonable to assume that the expenditures incurred during these visits come from the Holdeen Funds? If this is so, it is far better that the monies be given directly to the people the UUA are claiming to help.
The UUA has also participated in a number of projects in locations outside the context of the trusts with money from the Holdeen Funds (or Holdeen Designation Trust payments as they are referred to in the Minutes of the UUA).77 The table below is an illustration of the UUA’s ‘charitable’ grants from the Holdeen Funds for the year 2000.
Liberal Religious Charitable Society Inc. (LRCS) $267,000
International Association of Religious Freedom (IARF) $160,000
Partner Council Church (PCC) $60,000
International Council of Unitarian and Universalists (ICUU) $60,000
World Conference on Religion and Peace (WCRP) $20,000
Unitarian Union of Northeast India (Khasi Hills) $10,00078
The UUA provides brief descriptions of the above organizations through their Office of International Relations headed by the Reverend Holmes.79 The ICUU that received $60,000 was organized in 1995 “to strengthen the worldwide network of Unitarian, Universalist, and UU congregations”. According to the Reverend Polly Guild the ICUU was formed in response to the need to provide democratic representation to offshore Unitarian and Universalist congregations and to avoid the perception that the UUA was “engaging in a form of beneficent imperialism”.80 In elections held in Hungary the members elected as the President of ICUU the Reverend Jill McAllister of People’s Church in Kalamazoo, Michigan, USA. ICUU’s offices are in Weston, Massachusetts and the entire Executive Committee is from Europe and the Americas with the Reverend Polly Guild as the Program Coordinator.81
The Partner of Church Council (PCC), which received $60,000, was founded in 1993 “to focus and coordinate the enormous grassroots energy … following the collapse of Communism in December 1989”.82 The Council has a web site with information on former Eastern European countries complete with assistance on visa applications and advice for the discerning tourist.83
The WCRP received $20,000 from the Holdeen trusts and advertises itself as “an international multi-religious organization dedicated to reaffirming religion’s moral commitment to peace and to translating shared concerns into practical, effective action”.84 WRCP’s has its own very impressive web site and has an institutional structure with thirteen Trustees,85 twenty-four honorary Presidents86 (including John A. Buhrens, President of the UUA), thirty-eight members of what is referred to as a Governing Board,87 and a six member Secretariat.88
The International Association for Religious Freedom, which received $160,000 from the Holdeen trusts, is proclaimed as ” a world community of religious organizations that includes 80 member groups in 25 countries”.89 Mr. Robert Traer, the outgoing Secretary General, reflecting on his 10 years at the IARF, commented,
The IARF has generally assumed that building relationships between organizations and individuals from different religious traditions is a mark of success, and surely this is a prerequisite for any other positive result. But if these relationships are largely self-serving, then the IARF is more of an interfaith ‘club’ than a service organization. There’s nothing wrong, of course, with enjoying each other’s company but the rhetoric of the IARF promises much more.90
Mr. Traer hits the mark when he suggests that there is a growing school of thought that gives priority to forming ‘clubs’ for ‘building of relationship.’ There is everything wrong, however, if it is paid for with monies that come from the Holdeen Funds, as seems to be the case with not only the IARF but the ICUU, PCC and WRCP too. These organizations led by leaders who should know better are engaging in questionable behavior ethically speaking.
The Liberal Religious Charitable Society (LRCS), which received $267,000, the largest single recipient aside from the funds, is much more of an enigma. LRCS does not have a UU web site. I located three references to LRCS in a cursory search of UUA files on the World Wide Web. There is the already mentioned reference to LRCS in the budget as receiving from the Holdeen trusts $267,000 for the year 2000.91 The other two references to LRCS appear in connection with real estate transactions in Boston’s prestigious Beacon Hill neighbourhood, where the UUA is headquartered. In one reference, Lawrence R. Ladd, financial advisor to the UUA, assured the Board of Trustees that the additional debt incurred by the UUA for real estate purchases will be met by the LRCS. Ladd writes that the LRCS has promised “to provide $300,000 a year for two years and $150,000 a year for an additional three years, to help cover costs of this important initiative”.92 Form 990 filed with the IRS records that in 1999 the LRCS made a donation of $520,000 to the UUA.93 Is the Board of Trustees of the UUA ‘laundering’ Holdeen Funds to pay down property loans incurred by the UUA? A search on the World Wide Web of non-UU sources disclosed the following information on LRCS. The LRCS is a non-profit organization with a registered office at 61 Thicket Street, South Weymouth, MA 02190 with a mission described as providing religious education in association with the UUA. A visit to this location showed that it was typical house in a small New England town and was listed as the residence of Mr. William A. Donovan who is the Treasurer and Clerk of the LRCS.94
The other officials of LRCS in 1999 were:
President: William N. Holway, 2645 East 35th. St. Tulsa, OK.
Vice-President: Dr. Robert Adelman, 1540 Beachwalker, and Amelia, FL
Directors: Dr. Charles Davidson, 1502 First Ave # 4, and Coralville, IA
Mr. Robert E. Senghas, 54 Rivermount Terr. Burlington, VT
Judith W. Pickett, 109 Oakview Dr. Kettering, OH.
Jerry Gabert, 25 Beacon Street, Boston, MA.
Lucia B. Santini Field, 1691 West Street, Wrentham, MA.
Carol O. Orts, P.O. Box 9, Colerain, OH.95
Mr. Jerry Gabert is also the Treasurer of the UUA and one of three signatories authorized to individually sign checks up to $5,000 in “a bank account to hold funds associated with the Holdeen India program. This account was opend with BankBoston on July 31, 1998;”.96 Mr. Robert Senghas, a Director at LRCS, is also a UUA Trustee. He requested that it be noted that he abstained from voting in the HIP appropriations for the year 2000 and 2001.97 Mr. Senghas also abstained during a vote to “ratify the action taken by the Treasurer to make a final draw under the 41 Mt. Vernon loan agreement with BankBoston in the amount of $675,062 on September 21, 1998 for completion of the renovation financing, thus increasing the loan amount outstanding to $2,000,000.”98 Mr. Senghas had requested indemnification for “UUA employees and appointed volunteers for their work on behalf of the Association.”99 Are these efforts on Mr. Senghas part to express concern about the manipulation of the Holdeen Funds for illegitimate purposes?
The official documentation shows the UUA continue to claim that the funds are for Indians and Asian migrants and their descendants. Yet the allocation of grants to ICUU, WRCP, IARF and PCC clearly represent a diversion of the funds. The allocation of $267,000 to the LRCS which is than re-funneled into the UUA’s treasury to pay for real estate is, if it is true, a gross injustice.
It is true that the Holdeen India Program spends some of its share of the Holdeen Funds in India but there is no indication on what percentage of the total of approximately $1.7 million received in 1999 is devoted to HIP. The total amount allocated according to the Minutes is $577,000.100 How the majority of the proceeds for year 2000, approximately $1.2 million, is utilized is not properly explained. Certainly there is no evidence of criminal misappropriation of funds or any other illegal activity by individuals. Yet there are many ethical questions that must matter to a religious organization.
Since my efforts to gather information from the UUA on the activities of the Holdeen Fund have not been successful, I can only hazard an educated guess as to what Holdeen would have thought of the airplane travel between India and the United States, not to mention Eastern Europe, Ireland etc. Jonathan Holdeen, despite his great wealth did not own an automobile, broke up packing crates for firewood, and gave himself haircuts rather than pay for them.101 It is not difficult to conclude that he would have frowned on the ‘relationship’ building activities of the ‘clubs’ that receive allocations from the Holdeen Funds.102
The effort to house a multi-million dollar corporation in small house in a small town in New England, while spending millions on buying and renovating office space in the most prestigious neighborhood in Boston requires some explanation. What is suspected is that it is being funded out of the Holdeen Funds and not from contributions of member churches who will definitely not put up with such philandering under the guise of philanthropy. This type of activity in a charitable organization combined with continued reference to the impoverished people of India by UUA’s public relations machinery on the World Wide Web will in the long run hurt sincere efforts by liberal religious organizations to be a meaningful presence at home and abroad.
Yet Holdeen is dead and his daughter, Janet Adams Holden, has given up on her quest to protect her father’s legacy. The descendants of the natives of India, the first and second generation Indian and Asian immigrants who have been in this country for some years, have not been asked to participate in any concerted effort to join the UUA. (See the chapter on East Indian Immigrants and Unitarian Universalism). The poor in India and elsewhere generally belong to the lowest categories in the pernicious caste and class systems of the world. Their lack of skills in the world of sophisticated legal and financial matters has left them at the mercy of the powerful and privileged in Boston and elsewhere.
Therefore, the matter must finally rest in the hands of what is, after all, a democratically governed association of congregations made up of some of the most ethical and progressive people in the United States. There is no other recourse but to ask the member congregations of the Unitarian Universalist Association of Congregations to monitor the activities of their elected and appointed officials. In the absence of responsible oversight by the member congregations of the UUA, the poor peoples of the world are in danger of losing their inheritance, and the Unitarian and Universalists their reputation.
- This will eventually be a chapter in my D. Min dissertation provisionally titled “Caste, Class, Power and Privilege in Unitarianism.”
- The poor of India have been invoked in a number of ways in Unitarian Universalist literature both on-line and in printed form. Examples are highlighted in this paper.
- Raja Mylvaganam, “Caste and Class in Boston And Calcutta,” (Winter 1989). May Memorial Unitarian Society, Syracuse, New York.
- Olivia Holmes, “RE:,”13 December 2000 <OHolmes@uua.org>
- GuideStar, a project of Philanthropic Research, Inc., provides complete data on non-profit organizations that file Form 990 with the Department of the Treasury, Internal Revenue Service. They can be reached at <http://www.guidestar.com>
- Chuck Shepherd, “Church Heirs Settle Odd Estate Dispute,” News of the Weird (October 1996). Available [Online]: < http://www.positiveatheism.org/writ/apocolypsa.htm > [7 January 2001].
- Mr. Stuart Ditzen, reporter for the Philadelphia Inquirer, was the primary source for the news stories on the Holdeen Funds that have been carried by various news organizations since 1977.
- L. Stuart Ditzen, “Quiet Finish To A No-Tax Dream,” Philadelphia Inquirer. 11 October 1996. sec. LOCAL, edition: SF, p. AO1. Available [Online] <http://www.newslibrary.com/deliverccdoc.asp?SMH=381310> [10 January 2001].
- “Estate of Jonathan Holdeen v. Commissioner of Internal Revenue, memo 1975-29.” (U.S. Tax Ct. 1975), filed, 19 February 1975[Federal and State Case Law]; Available [Online]: http://www.lexis.com/research/retrieve [11 January 2001].
- Charity Search (2001). Available [Online]: < http://www.guidestar.com > [13 January 2001].
- A major portion of the sources for this paper is made up of UUA postings on the Internet, making it possible to include, “By their web pages” to the list of “Ye shall know them” aphorisms.
- Charity Search, (2001). Available [Online]: < http://www.guidestar.com > [21 January 2001].
- “Finding of Fact,” “Estate of Jonathan Holdeen v. Commissioner of Internal Revenue, memo 1975-29. (U.S. Tax Ct. 1975), filed, 19 February 1975[Federal and State Case Law]; Available [Online]: http://www.lexis.com/research/retrieve > [11 January 2001].
- Research students are told that the New York Times obituary column is a must to find information on their subjects, and one should be surprised if no mention is made of the subject under study.
- Finding of Fact
- Ibid. A collection of essays by Stephen Holden, Jonathan Holden and Audrey Holden Naylor entitled The Futurite Cult: the future life, life for many or for few nationalized thrift war and the schools and other papers. 2nd. ed. (Cooperstown: Otsego, 1931) is cited as the source for the passage.
- Findings of Fact.
- “Charitable Beneficiaries,” “Estate of Jonathan Holdeen v. Commissioner of Internal Revenue, memo 1975-29.” (U.S. Tax Ct. 1975), filed, 19 February 1975[Federal and State Case Law]; Available [Online]: http://www.lexis.com/research/retrieve > [11 January 2001]. The other nominal beneficiaries were Hartwick College; West Virginia Wesleyan College and Talladega College.
- Ibid. Computations will demonstrate that if a single cent could be kept invested at four- percent interest for 1000 years it would become a thousand trillion dollars.
- 30. Stephen Holden, The Cult of the clan: (Cooperstown: Otsego, 1930); Stephen Holden, The Holdens of Hartwick (Cooperstown: Ostego, 1932).
- Findings of Fact.
- L. Stuart Ditzen, “Dream To End Taxes Now a Nightmare Lawyer Wanted To Use Income From Trust Fund To Run Pennsylvania; Church Fights for Money,” Pittsburgh Post-Gazette. 1 March 1994. sec. State, p. B4. Available [Online]: < http://www.newslibrary.com > [11 January 2001].
- Finding of Fact.
- Ditzen, “Dream To End….”
- “Opinion, ” Holdeen.
- “General Facts Concerning The Trusts.” Holdeen.
- Ditzen, “Dream To End….”
- “GuideStar Pages – Holdeen Fund,” Forms 990-PF, Return of Private Foundation. Department of the Treasury, Internal Revenue Service. 1999 for Holdeen Funds 45-10; 50-10; 46-10; 47-10; 54-120; and 55-10. (19 May 2000) Available [Online]: < http://www.guidestar.com > [11 January 2001].
- GuideStar Pages – Holdeen.
- “About the Holdeen India Program.” Holdeen India Program. Available [Online]: http://www.uua.org/international/holdeen/about.html > [22 November 2000].
- When the dowry (inducement to marry) by the bride’s relatives are not paid as negotiated the dispute is sometimes resolved by killing the unfortunate bride usually by ‘accidents’ in the kitchen.
- Kathy Sreedhar, “No subject,” 22 November 2000. <Holdeen@aol.com>
- “Holdeen India Program Main Page” Holdeen India Program. Available [Online]: http://www.uua.org/international/holdeen/news.html >[22 November 2000].
- “UUA President Visits Holdeen Partners In India, Offers Aid,” UUs & the News. (16 February 2001). http://www.uua.org/news/india [27 April 2001] Buehrens fails to notice the fact that the expenditure in India from Holdeen Trust Funds is miniscule compare to the $21 million that the UUA received in 1996 from these Funds and the subsequent annual receipts in excess of $1 million that has been received by the UUA.
- In one instance the Rev. Jill McAllister, the Rev. John Gibbons, and six lay persons of the UUA traveled to India to represent the UUA at a gathering. “In the Khasi Hills of India, in February, nearly 10,000 members of the Unitarian Union of Northeast India will hold their100th annual meeting”. (One can only hope that the $10,000 gift to the Khasi Unitarians referred to above was not utilized to pay for the trip led by the Reverends Gibbons and McAllister). Dr. William F. Schulz, former President of the UUA, “spent February 1992 in India in consultation with the Holdeen India Fund, a fund dedicated to ending communal violence and to the political and economic empowerment of women, bonded laborers and others.” The Rev. Olivia Holmes, another UU visitor to India, described the Holdeen trust income as “designated for use in India for maternity, child welfare, education and migration expenses, and other uses”. The Reverend Holmes shares her “inspirational” trip replete with photographs on one of the many web sites devoted to the HIP.
- “General Facts Concerning the Trusts,” Holdeen.
- “From John Buehrens’ Address to GA.” Available [Online]: <http://www.pbat.com/uunews2/messages/128.html > [15 January 2001].
- “Minutes, UUA Board of Trustees Meeting, January 22-23, 2000,” 10 May 2000. Available [Online]: http://www.uua.org/TRUS/minutes1-00.html [7 January 2000].
- A special vote was taken to “authorize the expenditure of $10,000 from the Holdeen reserves for the purpose of making a one time, special gift to the Unitarian Union of Northeast India, in the Khasi Hills, in recognition of their 100th Anniversary”.
- “UUA Office of International Relations,” (3 October 2000). Available [Online] http://www.uua.org/international [13 December 2000].
- Polly Guild, The Reverend, “Introducing ICUU,” (2 March 2001). Available [Online]: www.uua/org/icuu-intro.html [13 January 2001].
- “Executive Committee, ICUU Offices.” Available [Online]: <http://www.uua.org/icuu/officers.html > [13 January 2001] In the face of this expropriation of the Holdeen funds I suspect the people of India may have settled for a ‘beneficent imperialism’.
- Polly Guild.
- “UU Partner Church Council,” (27 April 2000). Available [Online]: < http://www.uua.org/uupcc/. > [13 January 2001]
- “UUA Office of International Relations,” (3 October 2000). Available [Online]: www.uua.org/international/ [13 December 2000]
- “Trustees, Religions for Peace,”(N.D.) Available [Online]: < http://www.wcrp.org/profile/trustees.html ]: [14 January 2001].
- “Honorary Presidents, Religions for Peace,” (N.D.). Available [Online]: http://www.wcrp.org/profile/hp.html [14 January 2001].
- “Governing Board, Religions for Peace,” (N.D.) Available [Online]: http://www.wcrp.org/profile/GB.html [14 January 2001].
- “Secretariat, Religions for Peace” (N.D.). Available [Online]: <http://ww.wcrp.org/profile/secreteriat.html >[14 January 2001].
- “Our Interfaith Challenge,” International Association for Religious Freedom. (N.D.). Available [Online]: < http://www.geocities.com/~iarf/cpwr99.html > [14 January 2001].
- Minutes, January 22-23 2000.
- Lawrence Ladd, “41 Mount Vernon “, Financial Advisor’s Report to the 1998 UUA General Assembly, Rochester, New York. Available: [Online]: http://www.uua.org/ga/ga98/financial_report.html [7 January 2001].
- Lawrence Ladd, “41 Mount Vernon “, Financial Advisor’s Report to the 1998 UUA General Assembly, Rochester, New York. 27 June 1998. Available [Online]: http://www.uua.org/ga/ga98/financial_report.html [7 January 2001].
- “GuideStar Pages,” Available [Online]: < www.guidestar.com > [13 January 2001].
- GuideStar Pages.
- “Minutes, UUA Board of Trustees Meeting.” (October 1998) Available [Online]: http://www.uua.org/TRUS/minutes 10-98.html [22 January 2001].
- “Minutes, UUA Board of Trustees, October 1998 Meeting,” Available [Online]: http://www.uua.org/TRUS/minutes 10-98. html [22 January 2001].
- Minutes, UUA board of Trustees, January 1999 Meeting,” Available [Online]: http://www.uua.org/TRUS/minutes 1-99. html [22 January 2001].
- Minutes, UUA Board of Trustees Meeting, January 22-23, 2000.
- Ditzen, “Quiet Finish….”
- “Administration of the Trusts,” Holdeen. We can guess with some certainty his response to these extravagances, given the retort he gave to the Massachusetts Legislature when they tried to expropriate Benjamin Franklin’s trusts.