Crony Philanthropy? Why This Boston Grantmaker is Being Scrutinized

Built upon a baseball legacy, the Boston-focused branch of the Yawkey Foundations has been known as a big supporter of youth sports and education for underprivileged kids in New England. But lately, this foundation has been known for something quite a bit different: insider wheeling and dealing.

The ground shook when the Boston Globe published its recent article pointing out the shadow looming over Yawkey's impressive grantmaking efforts over the years. Since the 2002 Boston Red Sox sale, Yawkey has made around $300 million in grants to charities in the Boston community to benefit the needy and homeless, as well as medical, artistic, and education groups in the city. But as Globe writer Bob Hohler points out, an insider culture has emerged at Yawkey that supports funding special interests and facilitates questionable fee distributions.

The former attorney general, Tom Reilly, once referred to the foundation as a “closed little club,” a stereotype that Yawkey has been trying to shake ever since it collected the proceeds of the Red Sox sale. Hohler points out that Yawkey abolished provisions to set term limits for the board, increased compensation to trustees and management, and awarded almost 25 percent of its grants to organizations affiliated with its trustees. The list of examples of insider culture goes on, but the point, here, is that Yawkey money might not be serving the grassroots groups most in need of support in Boston. 

After 14 months of silence, the Yawkey Foundations published an article on its website. It was a response to the Boston Globe article that focused on the impact that the foundations have made on Massachusetts and the Greater Boston area over the past 14 years. Signed by Chairman/Trustee John Harrington and President/Trustee James P. Healey, the open letter calls the Globe article “quite one-sided,” and highlights the foundation's accomplishments and specific grantees that have received funding. Without specifically addressing many of the allegations, the duo praises its trustees and advisors for a job well done.

"It is also important to note that there are numerous procedures in place that help ensure grantmaking decisions by private foundations are transparent and free of conflicts," they wrote. "We want to assure you that the Yawkey Foundations follow all these procedures, and are fully transparent about all grantmaking in our public filings, published annual report and on our website."

As we have written before, the rules governing private foundations are pretty permissive and the kind of activities described by the Boston Globe at the Yawkey Foundations tend to be perfectly legal. There's nothing in the law, for example, to stop trustees from nicely compensating themselves and directing grants to their favorite charities. In theory, foundations—created with tax-deductible gifts—are broadly supposed to serve the public interest; in practice, they have wide latitude on how to interpret this mandate. Yawkey may or may not have crossed an ethical line, here, as the Globe suggests, but the bigger issue is the law governing foundations.

The Yawkey Foundations have around $420 million in assets today. Most of that has gone toward education, closely followed by human services and youth and amateur athletics. You can review a list of past grantees from recent years in Yawkey’s annual reports.