Less than a year before his death on April 17, 1790, Benjamin Franklin added a codicil or an addendum to his will. In it, he bequeathed £ 1,000 or what would have been the equivalent of $ 4,000 to the cities of Boston and Philadelphia. (Franklin was born and raised in Boston, but traveled to Philadelphia when he was 17, making both cities close to his heart.)
The money, he wrote, should be handled in a very special way. For the first 100 years, each of the £ 1,000 interest would accrue and be used to fund loans for young traders starting their business. Franklin, who had become a printer on a loan granted him, valued the resources available to trainees.
At the end of the 1
A “vanity of the imagination”
Franklin had been a lifelong philanthropist, gifting Philadelphia with its first public library, first hospital, first volunteer fire department, and even first street lamp. His Philadelphia Academy became the University of Pennsylvania in 1750. Funds for his trusts were amassed from his salary as Governor of Pennsylvania from 1785 to 1788, a move marked by a belief that officials should not be paid. It was an edict that he even wanted to include in the constitution.
Franklin’s desire for the trusts was to bolster the careers and opportunities for young artisans looking to start their own businesses. It was a high level of ambition that assumed that the need would persist for the next two centuries. Even Franklin wasn’t sure if his wishes could be met without objection. “In view of the accidents to which all human affairs and projects have been subjected in such a long time, I may have flattered myself too much with a futile notion that these dispositions would continue uninterrupted and have the proposed effects,” he wrote in his will .
There was wisdom in his words, though it would take time for them to materialize. For the first 100 years, as intended by Franklin, the funds were used to subsidize trainees from trainees hoping to practice their craft. Franklin was very specific about the loanee population: you had to be male, a mechanic who had completed an apprenticeship under 25 and was married.
As time passed and the concept of apprenticeship fell by the wayside, critics of Franklin’s rigid parameters emerged. In 1884, just before the fund’s 100th anniversary, The Boston Globe found the trusts “inflexible” and irrelevant to a world where only three people used Boston’s trust funds for their intended trading purposes. In response, the trustees soon removed the training requirement, although the other elements were retained.
Discourse becomes uncomfortable
If Boston talked about how to best use the money, it was because they got more of it. In 1887, Philadelphia’s investments had left only $ 70,800 in total compared to $ 327,799.45 in Boston. With 75 percent of the money to be made available for public works in 1890, Philadelphia decided to open a museum called the Franklin Institute. A debate began in Boston about how best to spend it. Some suggested it could help reduce Boston’s debt. Others wanted to build a public bathhouse. A recreation hall for the Boston Public Garden was discussed.
As Franklin had predicted, the discourse eventually turned violent. From 1890 to 1904, no one could agree on how the money should be spent, and a group of Boston city councilors became controversial over accusations of misusing the funds on junkets. Ultimately, it was decided that the opening of a school should live up to Franklin’s original intentions to support the craft. Wealthy philanthropist Andrew Carnegie agreed to donate money if Boston donated land and used the trust to build a business school. The Franklin Union – later renamed the Benjamin Franklin Institute of Technology – opened in 1908 and eventually became a two-year technical school.
Restrictions on trusts were further relaxed as the 20th century progressed. In Boston, over 7,000 medical students received loans between 1960 and 1990.
The road to prosperity – and litigation
As the second century of Franklin’s trust came to an end, both cities wanted greatly to benefit from his generosity. The Boston Trust Fund was valued at $ 4.5 million. Philadelphia was worth $ 2 million. Most of the money – around 76 percent in the case of Massachusetts – would go to the state. Just like 100 years ago, there was debate about how the funds should be spent.
In Philadelphia, low-income housing attorneys are campaigning for the money. Those who believed in education should come first. Philadelphia City Hall advocated lavish annual parties to attract tourists. Mayor Wilson Goode appointed a committee of Franklin experts to try to accommodate his requests. The city’s share, around $ 520,000, was ultimately used for scholarships for students who want to learn a trade. The state gave its stake of around $ 1.5 million to the existing Franklin Institute museum.
While Boston saw disputes over how best to use the funds, it also contested one allegation. The Benjamin Franklin Institute of Technology argued that they were owed the $ 4.5 million under a 1958 law that ended the trust and turned it over to the school. However, the state’s Supreme Court ruled at the time that the trust couldn’t end prematurely. However, the school argued that the law continued to apply. In 1994, after several years of judicial date, the school finally received the $ 4.5 million – the sum of funds owed in both Boston and Massachusetts.
Inspired by Franklin’s philanthropy, multimillionaire Jonathan Holden used $ 2.8 million in 1936 to fund a number of trusts, some of which would not be released until after 1,000 years. Before the idea was cleared up in court and turned into trusts that pay off annually rather than disrupting an economy in the distant future, his donation to the state of Pennsylvania alone would have been worth $ 424 trillion.