The Nation's Richest Charity for Kids (Hershey) - Where is the Money Going?

[JPZenger]

30 years before he died, Milton Hershey left almost his entire fortune and the control of the Hershey Corporation to benefit a boarding home and school for kids in need - the Milton Hershey School in Hershey PA.

Over many years, there have been questions about whether the Hershey Trust have truly been emphasizing serving the neediest kids and whether they are serving the most children as the funds allow, as ordered by Mr. Hershey in his gift. Here are excerpts from a press release from a watchdog group:

"On January 9, 2009, we of Protect The Hersheys' Children, Inc. (PHC) released a 2003-2008 Analysis of MHS Leadership Compensation and Performance results. The Analysis demonstrates that the last five years have been ones of tragic failure for MHS and self-enrichment for the MHS leadership. Among other things, the Analysis points out that, during the last five years:

- 994 children were removed from MHS while only 610 children graduated. This is in spite of per-child annual costs of approximately $100,000.

- $600,000,000 was spent on infrastructure, even though only 393 children were added to stabilized enrollment. This is an astonishing $1,500,000 in infrastructure spending for each child added.
Infrastructure decisions have defied belief, including construction of a $40,000,000 intake facility that crowded 20 children into each bedroom and 40 children under one roof, in disregard of 100 years of childcare progress.

While money was squandered on such senseless items as purchase of a failing luxury golf course and vanity projects benefiting MHS leadership cronies, though not helping needy children, only 29 projects were constructed for housing MHS children. This has led to shameful child-crowding, including the introduction of dormitories.

The MHS leadership has ordered childcare cutbacks while increasing its own compensation. Based on their own IRS filings, MHS Board members are paying themselves between $192 and $773 per hour for their part-time "charitable" board work, including $402,000 annually for MHS Board Chairperson Leroy Zimmerman. MHS President O'Brien is being paid $664,000 annually while several MHS administrators are in the quarter-million dollar range. These figures shock the conscience, particularly when considering that the Trust lost $1.9 billion in assets over the last year.

As our Analysis make clear, MHS has been on the wrong course for the last five years. Those who care about the Hersheys' child-saving mission should understand this, notwithstanding the MHS leadership's self-serving claims to the contrary. Indeed, the MHS leadership cannot refute what is in our Analysis, refuses to discuss these matters privately, and will not debate the issues publicly, so compelling are the facts marshaled by PHC.

Further, when PHC respectfully asked the MHS Board to agree to cease paying itself compensation sums unheard of at other childcare charities and to abide by charitable board compensation norms, the MHS Board's response was total silence. Truly, the hubris of the current MHS Board rivals that of the previous one, just as its childcare and fiscal failures rival those of the last failed Board.

Instead of addressing the facts or engaging in credible dialogue on these issues, the current MHS leadership seeks to mischaracterize what has transpired. It does this to avoid responsibility for its five-year track record, and in order to cling to lucrative positions and power. This includes propagating the fiction that President O'Brien's departure is "voluntary" and that his tenure has been a "success."

In actuality, President O'Brien has been asked to step down and his tenure has been a disaster --and every day that he and his Senior Leadership Team remain in place exacerbates MHS problems. Indeed, MHS employees continue to identify disturbing practices that hurt MHS children. But the climate of intimidation and bullying at MHS is so severe that employees are powerless to put a stop to this, or even anonymously to report misconduct, so demoralized and intimidated have employees become under the current MHS leadership.

Nor will matters improve in the future if we, too, endorse the fiction that MHS is "on the right track" or if we accept anything less than complete overhaul of the MHS leadership, Board and Administration.

Since we know that the MHS Board cannot reform itself and will only compound its past MHS hiring mistakes with additional errors, the real question is whether the authorities will finally act to improve the MHS childcare mission, as was promised in the past. Frankly, we do not know the answer. But be assured that PHC will do everything in its power to keep a spotlight on the conduct described in our Analysis, especially the tragic results of the last five years.

Again, we urge you to review our Analysis for related details. The case presented there is irrefutable. Further, it is incumbent upon alumni and all others who care about MHS to be informed on these matters.

In the meantime, we emphasize that replacement of President O'Brien provides a unique opportunity for comprehensive and positive MHS change. But for this to occur, candor will be required of us and action will be required from the authorities. This action includes replacement of the current MHS leadership and reform of the flawed MHS Board structure. Naturally, this action must occur before another MHS President-selection mistake is made by an improperly-constituted MHS Board. This is a Board that continues to elevate the personal and political interests of Board members above the needs of MHS children, and that still lacks even one credible residential childcare professional, as a result of the decisions made by local authorities five years ago.

Had those authorities fulfilled their obligations to needy children in 2002-2003 in constructing a new MHS Board instead of playing politics and engaging in cronyism, MHS today would already be flourishing. This would be under the direction of credible childcare professionals, who would utilize resources optimally, make proper MHS hiring decisions, and otherwise fulfill the child-saving wishes of our Founders. MHS today would be saving children's lives on a different order of magnitude, and serving children far better, including through genuine program advancement.

But instead, sloganeering is used to mask abysmal failures and MHS remains burdened with childcare regression, child-crowding, bullying of employees, unconscionable spending decisions, and gross self-enrichment by the MHS leadership.

The time for meaningful change has come to MHS in the form of action by the Office of Attorney General --and before another $600,000,000 is squandered or another 1,000 needy children are failed by inadequate programs.

PHC, for its part, will continue to speak truth to power, whether or not this meets with universal approval. As you surely are aware, with each passing day PHC's positions are vindicated, more children are hurt, and PHC's warnings prove warranted. This disturbing trend will continue until MHS is rescued from failed leaders and until MHS resources are finally unleashed to save children, rather than to advance the latest non-child agendas of the MHS Board.

For more information or to ask questions or discuss these important issues, please visit our website at: www.protecthersheychildren.org. Unlike those responsible for the continuing failures at MHS, PHC welcomes dialogue and is willing to defend our positions in any meaningful forum.

Thank you for taking the time to read this.

Sincerely,

Protect The Hersheys' Children, Inc.

Protect The Hersheys' Children, Inc. is a not-for-profit corporation dedicated to the well-being of Milton Hershey School (MHS) students, i.e., the children and sole lawful heirs of Milton & Catherine Hershey."