Struggling Hospital Depletes $135M Endowment
Exactly why the courts would allow LICH to tap into the principal is hard to understand, says Susan Doliner, vice president of development at Maine Medical Center, a 600-bed hospital in Portland.
"I'm not sure how they got the court orders to let them spend those funds. It is unusual because you are required to permanently restrict those funds and never spend the original principle," Doliner says. "To permanently restrict, that is what endowment means. ... That principal must always stay in hand according to accounting guidelines and the fiduciary responsibility of the institution."
Interest from the principal provides an income stream, and that is the only revenue that should be spent, Doliner says. "You would never touch the principal, which will grow over the years."
What is even harder to understand is why LICH would break one of the fundamental codes of philanthropy and go against the express wishes of the donors.
Doliner says it is "absolutely important" for hospitals to spend donations in the way donors intend.
"Rule number one is that our job is to professionally steward the assets of the institution. We must make sure the funds are spent in the way the donors intended. If you make a gift to cardiology, our job is to make sure it is spent on cardiology," she says.
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