The Year1926

A Publication of

The Cleveland Foundation

"The Committee to dis-tri bu te said incomeshall be residents ofCleveland, men orwomen interested inwelfare work, possess-ing a knowledge ofthe civic, educational,physical and moralneeds of the commun-. "Ity....

Excerpt from the Reso-lution of January 2,1914. (See Appendix)

The Annual Reportof the Director of theCleveland Foundationfor the Year 1926

The Committee of theFoundation

MALCOLM L. McBRIDE, ChairmanCOLONEL LEONARD P. AYRES, Secretary

C. W. BRAND

MRS. F. H. GOFF

W. H. PRESCOTT

JAMES R. GARFIELDCounsel

CARLTON K. MATSONDirector

710 Federal Reserve Bank Building

Presen ta tion

THE Committee of the ClevelandFoundation for the first time presents

to the public the report of the Director ofthe Foundation. The record of the year1926 is impressive, a demonstration thatthe Foundation is fulfilling the promiseof its early years.

In presenting this report, we ask earn-est consideration of it by every personinterested in the Cleveland community.The Foundation is a public enterprise,charged always with a public interest.

THE COMMITTEE OF THECLEVELAND FOUNDATION

MALCOLM 1. McBRIDE, Chairman

The Year 1926The Annual Reportof the Director to

the Committee

DURING the past year income from three trusts,amounting to a combined capital sum of $810,000,

has come under the administration of the Committeeof the Cleveland Foundation. While the principal isconsiderable and financially an important fore-runnerof greater sums, yet the nature of the three trusts andthe terms governing them, are even more significantthan the funds themselves to the man or woman whowishes to make the accumulations of his lifetimesupremely useful to his community.

The three funds are:

The George H. Boyd fund (approximately)$700,000; the Dr. Hamilton F. Biggar fund, $100,-000; an anonymous scholarship fund (to be aug-mented by yearly additions) of $10,000.

The terms of the trusts directing the Foundation inthe administration of these funds, will be set forth inparagraphs which follow.

The George H. Boyd FundGeorge H. Boyd, of Sharon, Pa., who died on July 25,

1926, made the Cleveland Trust Company trustee andthe Cleveland Foundation residuary legatee of hisestate under a living trust agreement with certainprovisions taking effect at his death. A presentconservative estimate of the amount which will be

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placed at once under the administration of the Founda-tion, is $700,000. The annual income to be distributedby the Foundation Committee is estimated at $35,000.

Mr. Boyd, who lived in Cleveland the first fortyyears of his life, became interested in the Foundationthrough his acquaintance with the founder, the lateF. H. Goff. The possibility the Foundation offeredMr. Boyd of carrying out purposes dear to him with anintelligent and informed continuity, and at the sametime of safeguarding these purposes against futility,made its immediate appeal.

Therefore, in the living trust agreement controllinghis property, the provisions governing "The George H.Boyd Fund" were written as follows:

"Pursuant to the power reserved to the contributorsto said Foundation, I hereby direct that the trustestate be devoted to educational purposes, and thatthe Committee having in charge the disbursement ofincome shall, in conference with the officials of WesternReserve University, utilize said income for the benefitof Western Reserve University, or such one or any ofits departments as may at any time seem most in needof assistance; except that such Committee may, fromtime to time, by way of loan or otherwise, use a portionof such income for assisting worthy and deservingyoung men or women in securing the benefits of acollegiate or university education at said institution orelsewhere, according to its judgment and discretion,provided that it shall not at any time use more thantwenty-five per cent (25%) of the income for suchpurposes, and provided further, that in case saiduniversity should cease to exist, then said income maybe used for such other educational purposes as theCommittee may determine."

I t is under these provisions that the Committee ofthe Cleveland Foundation is now beginning to functionin its administration of the Boyd fund. The presidentof Western Reserve University has already met with

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the Committee and tentatively presented his sugges-tions and those of his board of trustees as to what usesshould be made of the portion of the income availableto the University. The first distribution will probablybe made in this direction with the beginning of the fallsemester, 1927.

Scholarship support of Sharon youths alreadyundertaken during Mr. Boyd's lifetime, is beingcontinued this year to the extent of $8,900. This willprobably nearly exhaust the quarter of the incomeavailable for scholarships during this one year.

Further decisions about the administration of thescholarship funds will take into account Mr. Boyd'swishes and intentions, conditioned by such newly arisenneeds or appeals as should influence the FoundationCommittee in carrying out its trust.

The terms of the Boyd Fund illustrate to the manor woman who wishes first of all to remember somespecial institution or undertaking, how that can bedone through the Cleveland Foundation, and how atthe same time there can be secured through theFoundation plan an adequate safeguard against aharmful or futile rigidity. As has been well said, theFoundation offers "Insurance of Usefulness."

The Biggar FundDr. Hamilton F. Biggar, a prominent Cleveland

physician, who died on November 29, 1926, at the ageof 88, had provided through a living trust agreementthat there should be established:

"A fund of One Hundred Thousand Dollars ($100,-000.00) to THE CLEVELANDTRUSTCOMPANY,of Cleve-land, Ohio, which it shall thereafter hold as Trustee forthe charitable uses and purposes set forth in a Resolu-tion adopted by the Board of Directors of THE CLEVE-LANDTRUST COMPANYon the second day of January,1914, providing for a community charitable trust

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designated in said Resolution as "The ClevelandFoundation," to be managed, controlled, administeredand disbursed in all respects as provided in saidResolution, reference to which is hereby set forth atlength. It is my desire that the committee of TheCleveland Foundation having charge of the disburse-ment of its income give preference in the distributionof three-fourths (3/4) of the income derived from saidfund to such institutions and objects as have for theirpurpose the advancement of medical science,assistance of young men or women in procuring amedical education, or the relief from time to time ofhospitals or similar institutions whose facilities arecurtailed or impaired from lack of funds. It is mydesire that this gift be known as 'The Dr. HamiltonFisk Biggar Fund'."

It is the fixed policy of the Cleveland FoundationCommittee that a preference as expressed by Dr.Biggar, should be scrupulously observed until suchtime as unquestionable negative reasons make thecarrying out of the preference impossible or positivelyharmful.

Dr. Biggar made his gift in so broad and liberal away that such a contingency will probably never ariseand the preference can always be observed. It is notprobable that all, or even one, of the three namedoptional purposes of medical research, medical scholar-ships or hospital aid, will ever become futile or withoutpoint.

The terms of Dr. Biggar's trust illustrate admirablyhow funds can be set aside for cherished general pur-poses, with the option to choose the spending agenciesor individuals residing in the hands of the FoundationCommittee. In such a use of the Foundation, theutility of the gift is protected through the positivechoice from time to time of such active income-spend-ing agencies as may currently be most serviceable tothe community in the fields specified. '

The Foundation Committee has expressed its appre-[6]

ciation of the fact that the income from one quarter ofthe Biggar fund is available without preference ordesignation for the general purposes of the Foundation.

There have in the past been several funds of thissort set up, giving the Foundation Committee thegreatest latitude in administration. It is highlydesirable from the viewpoint of the future service ofthe Foundation to the community, that such undesig-nated funds be increased to the point where the Com-mittee will always be ready to back those projects ormeet those unexpected needs which the future develop-ment of a great city naturally places beyond the visionof any single individual or generation.

Special Scholarship FundA donor, who wishes to remain anonymous, during

1926 set up a special scholarship fund of $10,000, theincome from which is to be used for the higher educa-tion or training of young people having unusualability or being specially gifted.

The initial fund was created under a living trustagreement. The donor has expressed the intention ofadding to this fund, and the hope that the imaginationof others will be so caught by the fine and constructivepurpose of the gift that they will set up trusts directedto the same achievement.

The terms of the trust agreement making this$10,000 grant are as follows:

"Pursuant to the powers reserved to the donor insaid Resolution, I hereby express the preference thatat the discretion and under the direction of the Com-mittee of the Cleveland Foundation the income shallbe used to defray expenses of the further education orspecial training of young people of either sex who haveadequate basic preparation, preferably secondaryschool education or its equivalent, and who shall havegiven sufficient evidence of being specially gifted or of

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having unusual ability, and of being so qualified bycharacter and situation in life as to entitle them tosuch education or training."

It will not be easy to carry out the admirable con-structive intention which is behind this fund. Properlyadministered, the income from the fund will go toindividual young men and women who have shownpromise of real talent. They will be young people inwhom intellect and imagination and not personalityalone are the controlling factors. They will have thebasic equipment with which they can be taught tothink independently of the standard patterns of thoughtwith which they may come in contact. When theirtraining is completed they should be able to exercisereal leadership in industry, finance, art, political andsocial relations, the kind of leadership which not onlygoes ahead, but which continually finds better waysahead and leads along those ways. They should be insome measure pathfinders of civilization.

The Foundation is prepared to give its earnestthought and energy to the administration of the in-come from this trust, not only because it is a trust, butbecause the Foundation believes that the encourage-ment through education of the specially gifted is aservice not only to Cleveland, but to the nation.It is an undertaking in which there may be manyfailures. Human material which gives promise of theunusual will even in the process of education frequentlyprove ordinary. But if only one really superior personis discovered and aided in each generation the effortand the expenditure will probably have proved worthwhile.It is hoped that this fund and its purposes will catch

the imagination of other potential benefactors, andthat resources enough will be added so that a broadprogram of scholarship aid to the gifted can be carriedout in Cleveland.

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Current ActivitiesSince June, 1926, the Director has been acting as

executive secretary of the Cleveland Conference forEducational Co-operation. The Foundation has con-sidered this loan of service as a contribution to animportant and essential Cleveland activity. Officespace for the staff of the Conference has been loanedby the Foundation since the Fall of 1925.

The Conference, of which Dr. Robert E. Vinson ispresident, and Frederic Allen Whiting, secretary, wasorganized in 1924 to study "the educational problemsof Cleveland and community with the expectation ofultimately developing a co-ordinated educationalprogram for the entire community."

Nineteen Cleveland institutions, having primary orsecondary educational functions are included in theConference. These institutions, through the Con-ference, have been making a self-study of their relatedproblems in eight fields:

Adult Education; Art, Music and Drama; Exchangesof Services; Research and Graduate Instruction; Sitesand Finances; Social Agencies and Correlated Activi-ties; Teacher Training; Vocational Guidance andInstruction.

The reports of the various committees have beensubmitted from time to time, after being prepared bythe sub-committees and presented to the Conferenceas a whole, to a Study Committee of representativecitizens whose function it is to criticize and acceptthe reports for the community. This committee con-sists of:

Hon. Newton D. Baker, chairman; Col. Leonard P.Ayres; Hon. James R. Garfield; Philip Mather; W. H.Prescott; E. M. Williams; L. B. Williams.

Four reports have been accepted, and notableprogress, particularly in the field of teacher training,

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has already developed from the reports. The Con-ference expense has been generously met by grant ofthe Carnegie Corporation before whom an applicationfor further support is now pending.

The Cleveland Year Book, "the sixth annual publica-tion of the chronicles of Cleveland by the ClevelandFoundation," was issued in the Spring of 1926. Thisedition included as an appendix a Directory of theCivic and Welfare Activities in the city of Cleveland.The Directory was added to meet a demand constantlyvoiced by the community.

In the interests of economy the Foundation officedid, as it has in the past, most of the work of collectingand editing the material which goes into the Year Book.It is hoped that some time funds will be available tomake the Year Book a much more comprehensivevolume with a correspondingly broader appeal to theneeds of students of current affairs in Cleveland. It isintended that the Year Book shall serve two purposes:

First, A current reference book.

Second, A historical record of the years in Cleveland.

It seems worthwhile here to quote from the fore-word of the 1925 edition as to the place and significanceof the Year Book:

"The Cleveland Foundation is an enduring linkbetween the vision of the present and the achievementof the future, and as such it is highly fitting that theFoundation should preserve the chronicles of the city.

"Something of history will have to go into thosevital decisions regarding the distributing of incomeand principal which the Foundation Committee ofeach future period will be called upon to make. Thosedecisions will be made, not in disregard of the civicdeeds and ideals of the benefactors who have passed,but in the interpreting of those deeds and ideals interms of contemporary needs and conditions.

"The Foundation Committee is charged perpetually[ 10]

with the laying out of the roads of progress, not brokenoff from the trodden highways of the past, but con-tinuing those thoroughfares to fit the living needs ofeach generation.

"It is hoped that the Year Book of 1925, with theother Year Books, will be a useful servant to all thosewho have to make the decisions of the future."

Official actiVities of the Director undertaken orcompleted during the year were:

Executive Secretary, Cleveland Conference forEducational Co-operation; Chairman, Committee onAttendance and Membership, National Conference ofSocial Work; Chairman, Publicity Committee, theUniversity Hospitals; Member, Executive Committee,Education Extension Council; Member, Board ofTrustees, Community Child Guidance Clinic; Member,Community Christmas Committee of the WelfareFederation; Member, Educational Committee of theAssociated Charities; Member, Special Committee onthe School of Applied Social Sciences, appointed bythe president of Western Reserve University; Chair-man, Public Affairs Committee of the City Club;Member, Alumni Advisory Committee on the Appoint-ment of a President of Oberlin College; Member, OhioInstitute Committee, appointed by the president ofthe Welfare Federation.

Financial StatementThere is appended to this report the auditor's state-

ment covering the affairs of the Cleveland Foundationto the close of the fiscal year ending July 15, 1926. Astudy of this should give the reader an idea of therevenues and expenditures of the Cleveland Founda-tion up to the beginning of, and including, the firsthalf of 1926. This statement does not include anyincome from the three funds established during theyear.

It is to be noted that the income from trust funds,either designated or undesignated, has not been large.While the expectancy of the Foundation is impressive,,

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conservatively estimated to be more than $50,000,000,it has happened that the realization of the Foundation,particularly up to 1926, has been relatively small.

This is due in a measure to the fact that in its earlieryears the possibilities of the Foundation in safeguardingthe usefulness either of gifts to take effect immediatelythrough living trusts, or of bequests to take effect atdeath, were not much emphasized. The emphasis inpresenting the Foundation idea in these years waslargely upon its function as residuary legatee of estatesof which representatives of one or more generationsup to the legal limit of perpetuities, were given lifeuses.

The fact that some of the other and newer Com-munity Trusts, set up after the original plan of theCleveland Foundation, have larger capital funds isdue in some cases to the accident of mortality. This istrue in Indianapolis, with Community Trust funds of$2,000,000, and in Boston, with funds of $4,434,000.Recently established funds of $1,500,000 under ChicagoCommunity Trust administration, and $1,000,000 inNew York City, however, are under a living trustagreement or a deed of gift, and derive from the newerconception of the community foundations as currentlyactive agents immediately available to donors.

It is possible, therefore, that an increasing numberof funds will now continue to swell the aggregate ofthe Cleveland Foundation as there is a very apparenttendency, well defined in the foregoing record of 1926,to recognize the immediate availability and utility ofthe Foundation plan, either for insuring the usefulnessof current gifts made under living trust agreements, orof bequests made to take effect immediately followingdeath and independent of any life estates.

Respectfully submitted,Carlton K. Matson, Director.

February 14, 1927[12]

Cash Receipts and Disbursements

of

The Cleveland Foundation

For the Period from July 16, 1925, to July 15, 1926

BALANCEon Hand and on Deposit July 15,1925 _ $2,358.37

RECEIPTS

Contributions _Other Income _

$ 3,750.0023,594.20 $27,344.20

$29,702.57

DISBURSEMENTS

Disbursements as provided under theterms of the will governing the funds:

Julia A. Beebe $2,225.00A. H. and Julia W. Shunk__ 3,636.33 $ 5,861.33

General Office and Administrative Expense 14,359.61*Survey of Higher Education in Cleveland 990.30Cleveland Year Book—1926_ _____ ___ 2,083.11Payment on Bank Loan________________ 4,055.76Interest on Note Payable_______________ 136.26Office Fixtures Purchased_______________ 18.21 $27,504.58

Balance On Hand and On Deposit, July 15, 1926 $2,197.99

*The major expenses of the Survey were paid during the fiscalyear 1924-1925.

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Resolution Creating the FoundationAdopted by the Board of Directors of The Cleveland

Trust Company, January 2nd, 1914

With a view to securing greater uniformity of purpose, powers andduties of administration in the management and control of propertygiven, devised and bequeathed for charitable purposes, the Boardof Directors of The Cleveland Trust Company agrees to accept ofsuch gifts, devises and bequests as Trustee for the uses, purposes andwith the powers and duties hereinafter set forth, all property so heldto be Iknown as constituting The Cleveland Foundation, and to beadministered, managed and dealt with, save as hereinafter provided,as a single trust. From the time the donor or testator provides thatincome shall be available for use of such Foundation, such income,less proper charges and expenses, shall be annually devoted per-petually to charitable purposes, unless principal is distributed ashereinafter provided. Without limiting in any way the charitablepurposes for which such income may be used, it shall be available forassisting charitable and educational institutions whether supportedby private donations or public taxation, for promoting education,scientific research, for care of the sick, aged or helpless, to improveliving conditions or to provide recreation for all classes, and for suchother charitable purposes as will best make for the mental, moraland physical improvement of the inhabitants of the City of Cleve-land as now or hereafter constituted, regardless of race, color orcreed, according to the discretion of a majority in number of a com-mittee to be constituted as hereinafter provided, or in event of thefailure of two of the public officials empowered to appoint membersupon the committee, to make such appointments within thirty daysfrom the time they are requested in writing by the Trustee to do so,or in event of the unwillingness, failure or inability of a majority ofthe members to serve if appointed, or of the power to disburseincome by said committee being adjudged by a court of last resort tobe illegal, then according to the unfettered discretion of a majorityof the members of the Board of Directors of The Cleveland TrustCompany, such committee, or the directors of The Cleveland TrustCompany in event the power shall lodge in them, to use or distributethe net income when and as above provided, in such manner as willbest accomplish the purpose expressed, according to their absolutediscretion; provided that, if contributors to the Foundation, in theinstruments creating their trusts, indicate their desire:

1. As to time when and purposes for which principal contributedby them shall be distributed;

2. As to purposes for which their income shall be used, either for adefinite or indefinite period of time;

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3. That the power to distribute principal or income shall be vestedin the Committee constituted as hereinafter provided, with theexception only that the member provided to be selected by theJudge of the United States District Court shall be appointed bythe Board of Directors of The Cleveland Trust Company;

the Trustee shall respect and be governed by the wishes as so expres-sed, but only in so far as the purposes indicated shall seem to theTrustee, under conditions as they may hereafter exist, wise and mostwidely beneficial, absolute discretion being vested in a majority ofthe then members of the Board of Directors of The Cleveland TrustCompany to determine with respect thereto. Principal or interestdiverted under this power to other than the specific purposes indi-cated shall be used and distributed for the general purpose of theFoundation.

The CommitteeThe committee to distribute said income shall be residents of

Cleveland, men or women interested in welfare work, possessing aknowledge of the civic, educational, physical and moral needs of thecommunity, preferably but one, and in no event to excede two mem-bers of said committee to belong to the same religious sect or denomi-nation; those holding or seeking political office to be disqualifiedfrom serving. Said committee shall be selected as follows:

Two by the directors of The Cleveland Trust Company, preferablyto be designated from their own number.

One by the Mayor or chief executive officer of the City of Cleve-land.

One by the senior or presiding Judge of the Court for the timebeing having jurisdiction of the settlement of estates in CuyahogaCounty.

One by the senior or presiding Judge of the United States DistrictCourt for the Northern District of Ohio, or of the Court that mayhereafter exercise the jurisdiction of said Court in Cuyahoga County.

In event of any question arising as to the official herein authorizedto make said appointments, the decision of the Board of Directorsof The Cleveland Trust Company shall be final and conclusive withrespect thereto; all appointments to be for a term of five years exceptthe appointments first made, which shall be as follows:

One member by the Board of Directors of The ClevelandTrust Company fOr_ One Year

One member by the Judge of the United States DistrictCourt for the Northern District of Ohio for Two Years

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One member by the Judge of the Probate Court of Cuy-ahoga County fOL Three Years

One member by the Mayor of the City of Cleveland fOL__Four Years

One member by the Board of Directors of The ClevelandTrust Company fOL Five Years

Vacancies by expiration, death, resignation or refusal to serve tobe filled for the unexpired term by authority making original appoint-ment, in event of the failure for thirty days after receipt of writtennotice from the Trustee so to do, then by the Directors of The Cleve-land Trust Company; the expenses of the committee, includingcompensation to be fixed by the Trustee to a secretary, who shall beappointed by and hold office subject to the will of the Trustee, shallbe paid out of the income, but the members shall serve withoutcompensation. They shall annually organize by the election of achairman and shall keep complete records of their proceedings,receipts and disbursements, copies of which shall be filed with theTrustee on or before the 20th day of January in each year; dis-bursements shall be made by the Trustee on the written orders of amajority of the committee given at regularly called meetings. Failureof the committee for twelve months to file disbursement orders withthe Trustee shall empower the Board of Directors of The ClevelandTrust Company to disburse income then available for distribution.

TaxationAfter the entire income of any trust constituting the Foundation

is available for charitable purposes, all or any portion of the propertybelonging to such trust may be listed for taxation, regardless of anystatute exempting all or any part thereof by reason of its applicationto charitable purposes, if a majority of the Board of Directors of TheCleveland Trust Company shall so direct. The receipts and dis-bursements of the committee as well as of the Trustee shall beannually audited by an independent Auditor, and there shall bepublished annually in the two newspapers published in the City ofCleveland reputed to have the largest circulation therein, a certifiedstatement by such Auditor showing in detail the investments held ineach separate trust constituting the Foundation, the amount ofincome received during the preceding year, the purpose for whichthe income has been used, and a classified statement of the expensesof the committee and the Trustee. Failure to make such publicationshall authorize any court of competent jurisdiction to appointanother trustee in event the court shall find that neglect to makesuch publication is due to gross carelessness or willful neglect of theTrustee.

116]

Successor trustees, however, or for whatever reason appointed orcreated, shall have all powers and discretions and be charged withlike duties in all respects as herein conferred upon The ClevelandTrust Company.

PrincipalWith the approval of two-thirds of the entire Board of Directors,

of The Cleveland Trust Company, given at a meeting called specifi-cally for that purpose, all or any part of the principal constitutingthe trust estate may be used for any purpose within the scope of theFoundation, which may have the approval of four members of saidcommittee, providing that not to exceed twenty (20) per cent of theentire amount held as principal shall be disbursed during a period offive consecutive years. In event a court of last resort shall everadjudge that the provisions requiring the approval of said committeeto disbursement of principal or that the power conferred on saidcommittee to disburse income is invalid, the power to distributeprincipal and income shall be vested exclusively in the Board ofDirectors of The Cleveland Trust Company, and thereafter saidcommittee shall act in an advisory capacity only.

To further assure the carrying out of the purposes of the Founda-tion, each and every of its provisions are to be regarded and con-strued as independent of every other provision. In event a court oflast resort shall adjudge that any of the terms, conditions or provi-sions of the Foundation are invalid, such adjudication shall in nowise affect the validity of the remaining provisions, and the Directorsof The Cleveland Trust Company, by a two-thirds vote of the entireBoard at a meeting called specially for that purpose, are empoweredto direct that the administration of the trust be proceeded with insuch manner as will most nearly conform in their judgment to thecharitable intention and purposes of the Foundation, due considera-tion being given to changed conditions and varying circumstances.

Either the attorney-general of the State of Ohio, or the law officerof the City of Cleveland, shall have the right to institute appropriateproceedings in any court of competent jurisdiction to restrain,correct or recover for any mal-adminstration of the trust estate byTrustee or the Committee, and shall at all reasonable times have theright to inspect the books, vouchers and records of the Trustee andthe Committee in any way pertaining to the Foundation.

Powers of TrusteeIn administering the property constituting such Foundation,

unless otherwise specifically provided in the instrument creating the

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trust, the Trustee shall have power to sell, lease, transfer or exchangeall or any part of said property at such prices and upon such termsand conditions and in such manner as it may deem best; to executeand deliver any proxies, powers of attorney or agreements that itmay deem necessary or proper; to invest and re-invest in such loans,securities or real esate as it may deem suitable for the investment oftrust funds, irrespective of any statutes or rules or practices ofChancery Courts now or hereafter in force limiting the investmentsof trusts companies or trustees generally; to determine whether moneyor property coming into its possession shall be treated as principalor income and charge or apportion any expenses or losses to principalor income according as it may deem just and equitable; to select andemploy in and about the execution of the trust, suitable agents andattorneys and to pay their reasonable compensation and expenses;the Trustee in no event to be held liable for any neglect, omission orwrong-doing of such agents or attorneys, provided reasonable careshall have been exercised in their selection. The Trustee, save forits own gross neglect or willful default, shall not be liable for any lossor damage.