Are Bad Apples Spoiling the Otto Bremer Foundation?

The seas are rough, and there are three people of dubious moral persuasion at the helm: That’s how we see the latest situation at the Otto Bremer Foundation. The executive director is long gone, and the three trustees, who installed themselves as co-CEOs in June, are dickering over which way to steer the ship and running up their personal salaries in the meantime. And without anyone to stop them, there’s no telling what their next move might be.

See, most foundations are constructed with a system of checks and balances in place, much like the U.S. government, to ensure no one entity has complete power. The executive director/president/CEO and the trustees are there to keep each other in line.

After all, being in charge of a multimillion-dollar foundation is the kind of gig that could go to someone’s head: Managing all that money is a lot of responsibility, and if no one were looking… well, the door would be open for all kinds of nefarious doings. Like embezzlement, hypothetically.

So it strikes us, and others in the philanthropic community, as suspicious that the Otto Bremer Foundation trustees pitched out their executive director Randi Roth and put themselves in charge. And even more suspicious that the trustees have been steadily hiking up their own salaries since 2008—the number is now up to $1.2 million for the three of them. Note that median foundation trustee annual pay is $24,000, and many trustees aren’t paid at all.

These developments are especially shocking in light of the OBF’s formerly glowing reputation as one of the most upstanding and generous foundations in the Midwest. Founded in 1944, the foundation has given to food banks, community centers and groups that work with immigrants. It’s given $300,000 to the Phillips Eye Care Institute Foundation, and $80,000 to a hospice in Marshall, Minn. For a long time, it’s been a stock-in-trade Good Guy, giving broadly and generously to wide array of causes that tie in to public health, education, poverty, and general community betterment causes.

This entire scuffle seems to be a fairly recent besmirchment of the OBF’s rep. As recently as 2004, the Otto Bremer Foundation’s trustees paid themselves a perfectly modest $125,000 combined, right in step with the national average. That year, the trustees gave themselves a modest raise. Another small raise followed in 2007. Then, from 2008-2011, trustee income positively soared. In 2009, the year the recession got real for millions of Americans, two of the Bremer trustees gave themselves 157 percent raises. And meanwhile, it was business as usual for the foundation. Its profitability didn’t skyrocket; it kept on grantmaking at its usual pace.   

So, YO! What happened? What happened to tarnish this shining little star of a foundation to the extent that the National Committee for Responsive Philanthropy is calling on the Minnesota Attorney General’s Office and the IRS to investigate?

No one is talking. The trustees, and Randi Roth herself, are all mum on the subject. What we do know is that the OBF’s grantmaking saw some changes in 2013. In the last quarter of 2013, the OBF decided to double its usual quarterly giving, foisting $9.3 million off on organizations throughout the Midwest.

Are the trustees fed up with the foundation’s usual conservative approach to grantmaking, and looking to live a little? Are they spending untold hundreds of hours—the kind of hours that would justify pulling down a six-figure salary—shoring up the foundation’s investments, poring over new proposals, and charting a course for the future? Or are they power-hungry folk who’ve lost sight of helping those less fortunate, the whole reason their foundation exists? It all remains to be seen.