Bob Fernandez's 'Chocolate Trust' not too sweet on Hershey institutions
Among America's titans of industry, none has left a legacy quite like Milton Hershey. In 1909, he and wife Kitty endowed an orphanage for boys with hundreds of acres of dairy farms in Pennsylvania's Lebanon Valley. Over the years, the Hersheys, who were childless, added the earnings of the chocolate company to the mix.
The Chocolate Trust
By Bob Fernandez
Camino Books. 256 pages. $24.95
nolead ends nolead begins
Reviewed by Mark Wagenveld
nolead ends Among America's titans of industry, none has left a legacy quite like Milton Hershey. In 1909, he and wife Kitty endowed an orphanage for boys with hundreds of acres of dairy farms in Pennsylvania's Lebanon Valley. Over the years, the Hersheys, who were childless, added the earnings of the chocolate company to the mix.
The Chocolate Trust is a searching, often searing examination of how this mix of charity and business success has fared. It grew out of Inquirer business reporter Bob Fernandez's reporting on the Hershey Trust, set up to manage the school's money and appoint its board. It's an impassioned plea for the complete overhaul of school and trust.
"Representatives of the Trust called me vindictive and wrong," Fernandez writes. "But poor mothers and concerned alumni lit up my phone" with complaints about life at the tuition-free residential school, which today serves about 2,000 students from low-income families, pre-K through high school.
Total assets dedicated to the Milton Hershey School have grown to $12 billion - enough to fund the entire Philadelphia school system for four years. And a central theme of the book is that much more could have been done to serve the intended beneficiaries of Hershey's will.
As the wealth piled up, the Trust that controlled the school - and its money, after Milton's death - began eyeing other opportunities. The school population had risen to 1,080 by 1960, far short of the Trust's own goal of 1,500. Meantime, the surpluses kept growing. The Trust could have broadened its population (it integrated in 1970 and has also added girls and older children), but instead it secretly laid plans for a $50 million medical center.
In what Fernandez describes as "typical of the smoke-filled backroom politics of Harrisburg at that time," the trust won required approvals from the state Attorney General's Office and the Dauphin County Orphans Court without any public discussion or disclosure, barely leaving a paper trail. Philadelphians who have followed the legal sagas of the Barnes Foundation and Girard College, each with its own thorny trust issues, might shake their heads in wonder.
The medical project soon ran into cost overruns, and the trust elected to hand it over to Penn State, which could qualify for federal help. "One has a hard time," Fernandez writes, "not viewing this medical center project as a $50 million gift from Milton and Kitty's orphans' fund to Penn State by two alumni boosters, Gil Nurick and Sam Hinkle" - two of the power brokers who steered the deal.
Fernandez questions other business dealings, including a $12 million purchase of an adjoining golf course. He is dismissive of reforms announced by state Attorney General Kathleen Kane in 2013. He criticizes the school's dropout rate, reporting that over a recent decade, "2,034 students dropped out or were kicked out of the fabulously wealthy and free school, while only 1,439 graduated." Students and parents complained to the author of a "Big-Brother-like campus" with excessive rules and discipline.
Fernandez's verdict is that it's difficult "not to view the management of Milton and Kitty Hershey's trust fund over the last 50 years as a massive taking, or redirecting, of funds for orphans and poor children by the state's political establishment and Trust leaders to benefit local economic development and themselves." He calls for the trust to be dissolved and school expansion put on hold while its child-care mission is reevaluated and every dropout or expulsion over the last decade is investigated.
