Introduction

Inasmuch as the law requires that the Managers respect and fulfill the Hersheys’ intent, we should measure the success of the Hersheys’ philanthropy the way we know M.S. measured the value of philanthropy. M.S.’ sole measure of the value of the Hersheys’ philanthropic efforts was the amount of good it does. Thus, the success of the Hersheys’ philanthropy should be measured in terms of the benefits of their philanthropy to their intended Beneficiaries. When measured from this perspective, the Hersheys’ philanthropy has no equal. The residential, educational and other related facilities, and employees that directly serve the Resident Beneficiaries and the Non-Resident Beneficiaries, which comprise an important component of the School, was established according to the Hersheys’ standard for measuring the value of philanthropy. Based on research, the Hersheys’ Philanthropic Standard for measuring the value of their philanthropy is to measure the value of their philanthropy based solely on the amount of good it does for each Current Beneficiary in the context of such beneficiary’s unique abilities, interests, and commitment; it is not measured by the cost to the Trust of the benefits delivered to, or received by, such beneficiary. The Hersheys’ Philanthropic Standard helps to explain why the school, as a material component of the School, is just as unique as the School.

 

The unique attributes of the school include the school, the School Family and Milton Hershey’s Alumni Association; each is unique and plays an important role in the effectiveness and success of the Hersheys’ philanthropy, measured by the Hersheys’ Philanthropic Standard. 

 

The “school”

As we describe the unique attribute of the school, we first distinguish it from the School. By way of clarification as one seeks to understand the school, keep in mind that:

(1)   the School (a) includes, among other things, the school and the “ideal community,” and (b) is first and foremost a children’s home to be operated in perpetuity for Current Beneficiaries: dependent, at-risk children, who are in need of substantially year round institutional care by a children’s home such as that intended by the Hersheys for the full development of each Current Beneficiary as a whole person according to such person’s unique abilities, interests, and commitment, and

(2)   the “school” is the residential, educational and other related facilities, and employees that directly serve the Resident Beneficiaries and the Non-Resident Beneficiaries, which comprise an important component of the School. 

Because of the nature of the school, it possesses those attributes of the “School” that derive primarily from the School’s various children’s home qualities. Nonetheless, in light of the relationship between the School and the school as manifested in the Deed of Trust, the attributes of the school radiate throughout the School by virtue of the School’s and the Managers’ overall mandate under Milton Hershey’s Deed of Trust.

 

 

It is a Children’s Home

The primary objectives of the Hersheys in executing the Deed of Trust are (1) to operate the Hersheys’ Children’s Home in perpetuity for (2) the full development of the whole person admitted to such home. The trust corpus is held “in trust for a permanent institution for the residence and accommodation of poor white male orphans, and the requisite teachers and other persons necessary in and about such an institution and the maintenance, support and education, as hereinafter prescribed of such orphans.” Such “permanent institution” is the School. The School, among other things, includes the “school” and Hershey, Pa. (the “ideal community”) – the ideal community for and to be run by orphan boys. In the words of the Honorable Judge Warren G. Morgan:

This was no conventional school that the Hersheys had in mind. […] Indeed it is not merely a school at all, but […] a home […]. The vision of Milton and Catherine Hershey was to relieve poor children from all of the conditions of poverty; to undertake their total care and upbringing.^[1]  […]

The specific intention of the Hersheys, as plainly stated in the Deed of Trust, was to remove children from an environment of poverty and to place them in a residential setting where they would be provided all of the necessities of food, shelter, clothing and health care together with moral and ethical guidance as well as class-room education.^[2]

The permanent institution founded and endowed in perpetuity through the Deed of Trust was, and remains, first and foremost the Hersheys’ Children’s Home.

 

Before founding the School, M.S. taught himself by visiting a number of orphan institutions. He was heavily influenced by the fact that these schools lacked a truly loving, home atmosphere, and concluded that his boys must grow up within a real home surrounded by loving adults. Following the creation of the Trust in 1910, for the next 35 years he was able to demonstrate the Hersheys’ intent as reflected in the Deed of Trust and the various Indentures executed on behalf of his boys.  In his mind, M.S. believed that he made it clear as to the Hersheys’ intent and how the School should be operated following his death.

 

Picture 3: Milton S. Hershey, circa 1905 and Catherine S. Hershey, circa 1910 [3]  Milton S. Hershey and his wife, Catherine S. Hershey, near the time they established The Hershey Industrial School Trust.
Picture 4:  George Copenhaver, the First Superintendent of The Hershey Industrial School, and  Prudence Copenhaver, George Copenhaver’s Wife [4]  Milton Hershey believed that credit for the success of the lives of the HIS students was due to the loving and thoughtful care of George and Prudence Copenhaver, who served as real parents to all of M.S.’s boys.

 

 

The Guiding Principles

As the Hersheys designed the School, they had the following guiding principles in mind:

·         Eliminate any notion of institutional life and charity.

·         The Current Beneficiaries must grow up with a feeling that they have a real home, among adults who love them, and the Hersheys’ Children’s Home Campus is to be rural and agrarian providing the Current Beneficiaries with a home-life that is in wholesome surroundings, keeping them close to nature, and teaching them to do productive chores in the development of their character, minds, and bodies. 

·         With respect to each Current Beneficiary, the overall objective is the full development of the whole person, both as a child and as an adult, according to such person’s unique attributes (that is, tastes, capacity, intelligence, and adaptability), interests, and commitment.

·         Give as many boys as possible real homes, real comforts, education, and training, so they become useful, happy citizens.

·         Some of the Current Beneficiaries would in time run the School, including the town of Hershey.

·         When measuring the value of their philanthropy one must apply the Hersheys’ Philanthropic Standard, which is to measure the value of their philanthropy based solely on the amount of good it does for each Current Beneficiary in the context of such beneficiary’s unique abilities, interests, and commitment.

 

Thus, the intent of the Hersheys in this regard can be summarized as the cornerstones of the Hersheys’ philanthropy, which are as follows:

·         Fully developing the whole person according to such person’s unique attributes (that is, tastes, capacity, intelligence, and adaptability), interests, and commitment;

·         Eliminating charitable institution, “communal” and all other attributes that might serve to limit the development of each individual and their respective self-image and confidence;

·         Providing the correct environment in which to best accomplish these first two objectives;

·         Building an institutional family – the School Family – to which each student becomes a member for life for the same reasons that healthy biological families are beneficial to its family members; and

• When measuring the value of their philanthropy one must apply the Hersheys’ Philanthropic Standard, which is to measure the value of their philanthropy based solely on the amount of good it does for each Current Beneficiary in the context of such beneficiary’s unique abilities, interests, and commitment.

 

 

The Nature of the Child Admitted & Indenturing

From 1910 through 1945, The Hershey Industrial School admitted as beneficiaries of the Trust only those who satisfied the requirements for admission to the School under the Deed of Trust. Here are the “Requirements for Admission” under Milton Hershey’s Deed of Trust:^[1]

Consistent with the operation of the Hersheys’ Children’s Home in perpetuity for the full development of the whole person admitted to such home, only a child determined at the time of admission to be a child:

(1)               who is dependent to the extent of not having sufficient means to properly support and educate such person (that is, such child is determined to be in need of the institutional care of the Hersheys’ Children’s Home),

(2)               with hereditary traits, physical and mental, that fall within expected and accepted norms for a child that is dependent or in need of the institutional care of the Hersheys’ Children’s Home,

(3)               that does not suffer from physical ailments that would make it inexpedient for such person to continue such person’s studies and training at the Hersheys’ Children’s Home,

(4)               with character traits and observable behavior that fall within expected and accepted norms for a child that is dependent (that is, a child who is in need of institutional care),

(5)               with at least a normal or average intelligence quotient and not otherwise incompetent to learn, or to master a trade, 

(6)               likely to benefit from the Hersheys’ Children’s Home’s efforts to fully develop such person as a whole person,

(7)               born in the United States of America,

(8)               who is subject to Indenturing, and

(9)               who is

(a)               from November 15, 1909 through October 29, 1933, a white male between 4 and 8 years of age whose father is dead, or

(b)               from October 30, 1933, a white male between 4 and 14 years of age whose father or mother is dead.

In the context of admission of a new beneficiary, “normal” means normal under the circumstances of being a poor child who has lost one or both parents and should allow for behavioral, emotional, and educational disruptions ordinarily associated with dependency and likely to be eliminated or greatly reduced if admitted to the School.

When a child suffers a broken home as a result of becoming a dependent, full- or half- biological orphan, such orphan experiences a void which is not easily filled. In the absence of the School, dependent children are left to fulfill their needs as best they can under the guidance of hundreds of persons – social workers, foster parents, government workers, teachers, judges, relatives, administrators, ministers, and others with similar qualifications. Unfortunately, these relationships are not sufficient to ensure the individual child’s full development. These relationships often prove insufficient for a number of reasons. Sometimes they do not last long enough. Where the child is without a healthy, loving family, these relationships may not adequately address such child’s need for a healthy, loving family. Substitution of these short term or limited scope types of relationships in cases where the child needs a healthy, loving family, stable environment and opportunities to succeed generally will lead to this child growing into an adult who achieves much less than his full potential or worse, experiencing any number of undesirable outcomes for which he is at risk as a dependent child. 

 

To be admitted to the School under Milton Hershey’s Deed of Trust, an otherwise qualifying orphan had to be subject to Indenturing. In other instances where indenturing was used in the context of serving the poor, those uses were not always developed with the best interests of the child in mind. Unlike these other instances, with which the Hershey context should not be mistaken to possess any similarity, the use of indenturing to be admitted to the School had the best interests of each child in mind; this is because the Hersheys’ Philanthropic Standard for measuring the value of their philanthropy is to measure the value of their philanthropy based solely on the amount of good it does for each Current Beneficiary in the context of such beneficiary’s unique abilities, interests, and commitment.

 

Thus, the expressed intent under the Deed of Trust was that no otherwise qualifying orphan could, under any circumstances, be admitted to the School until after the parent or guardian gave the Mangers adequate power to prevent said parent or guardian from interfering with or withdrawing the orphan(s) from the school.  In other words, once the orphan became a Current Beneficiary, the Managers became responsible to act in the best interests of each Current Beneficiary and consistent with this responsibility it was expressly provided that relatives, friends, and others would not interfere with or withdraw any orphan from the school.  Moreover, the Managers were to have adequate power to enforce every proper restraint in relation to each orphan.  Thus, the Managers were to have complete custody and control of each Current Beneficiary to the exclusion of all others.  This was the basis upon which the Hersheys authorized The Hershey Industrial School and the Trust, through the Managers, to admit to the School a qualifying orphan and thereby become a Current Beneficiary.  The form of Indenture used also reflects the requirements of Paragraph 15.  The form of Indenture provides greater insight into the nature of the legal relationships that were to be established as required by Paragraph 15. Each Indenture is a contract between the Managers on the one hand and the subject orphan’s parent, guardian, or other competent authority on the other.

Each Indenture establishes the legal relationships amongst and between the Managers, each orphan’s parent, guardian, or other competent authority, and the minor orphan.  Each Indenture also alters the preexisting relationship between each orphan’s parent, guardian, or other competent authority, and such orphan.  Once an Indenture had been executed and the minor orphan admitted to the School, the relationship between the Managers and such Current Beneficiaries was further modified and enhanced through the Deed of Trust.  Each Indenture remained the sole governing instrument binding upon the orphan’s parent, guardian, or other competent authority, and the Managers to evidence their contractual relationship.  However, each orphan not only derived benefit from the Indenture as an intended third party beneficiary, but also upon becoming a Current Beneficiary following admission to the School derived additional benefits under Milton Hershey’s Deed of Trust.

By virtue of the Managers entering into an Indenture, each Current Beneficiary comes to have a direct relationship with the Managers, and through a combination of this relationship and admission to the School also forms a direct relationship with the Trust.  Considering that (1) under each Indenture all parties intended to benefit its subject orphan under (a) his Indenture and (b) the Deed of Trust, (2) each Indenture contemplates that the orphan is a party by virtue of the execution of the Indenture by an adult on behalf of the minor orphan; and (3) the language of Milton Hershey’s Deed of Trust to the same effect that the Trust is for their benefit, there can be no doubt but that the Current Beneficiaries are the beneficiaries of the Trust. 

To be admitted to the School under Milton Hershey’s Deed of Trust, an otherwise qualifying orphan had to be subject to Indenturing.  Indenturing was substantive in nature and modified certain legal relationships.  It means a new legal relationship was formed between each minor orphan, the Managers and such orphan’s parent, guardian, or other competent authority and evidenced by an Indenture, pursuant to which:

(1)               the minor orphan’s parent, guardian, or other competent authority releases and relinquishes to the Managers the “custody and control of” such orphan at all times such orphan is a minor – such that

(a)               said orphan is “to dwell with and serve” the Managers and “to be under their exclusive custody and control;”

(b)               said orphan is to “faithfully, honestly, and obediently serve the said Managers and conform to all their rules and regulations with reference to residence, studies, work and duty, and all other rules and regulations established by the Managers, their executive officers, or others by them appointed;” and

(c)                “the intent of this release being to enable the Managers to enforce in relation to the said orphan every proper restraint, and to prevent relatives, friends, or others from interfering with or withdrawing the said orphan from the school;” and

(2)               the Managers as a fiduciary undertake, among other things therein provided,

(a)               to “teach and instruct, or cause to be taught or instructed, the said orphan as set forth in the deed founding and endowing the school, and will keep and maintain the said orphan during the period aforesaid;”

(b)               “in their discretion, before or after the arrival of the said orphan at the age of eighteen years, provide for his further education at some other school, college, or university;” and

(c)                this additional obligation “The home provided for the said orphan by the Managers is situated at Hershey, Dauphin County, Pennsylvania, and that will be his residence,”

in each case at all times the orphan remains a minor which undertakings are also set forth in the Deed of Trust as a continuing obligation of the Trust until fulfilled in accordance with the Deed of Trust or in the case of clause (2)(c) above in accordance with such Current Beneficiary’s Indenture.

The legal document entered into as evidence of the relationship required for Indenturing is referred to as an “Indenture.” If the child suffers an “Orphan Termination Event,” the Managers may terminate the Indenture and the contracting parent, guardian, or other competent authority “agrees to immediately assume the charge and care of the said orphan” and the undertakings of the Managers cease. For purposes of Paragraph 16 of Milton Hershey’s Deed of Trust, such Orphan no longer merits remaining at the School until they reach the age of 18. Note that Paragraph 21, which requires orphans to leave the school at age 18 and to cease to receive the benefits of the school, does not require them to leave the School (which includes the “ideal community” or Hershey, PA) nor to cease receiving benefits under the Deed of Trust or their respective Indenture (except to the extent such benefits are to be received by being at the school).

Though each Indenture is a contract with a finite term, the maximum term of which would be 17 years from a Scholar’s 4^th birthday to his 21^st birthday, assuming the longest period of time one could be a minor, there are some benefits that by their very nature continue even following the expiration of such Indenture.  The Indenture is entered into by parties who are able to contract – the orphan’s parent, guardian, or other competent authority and the Managers.  This must be the case at all times such orphan is not able to contract on his own in order to clearly shift responsibility to the Managers and to restrict that which such orphan’s parent, guardian, or other competent authority could do with respect to such orphan once he is admitted to the School.  Nonetheless, such orphan is an intended third party beneficiary of his Indenture and a party through the execution of such agreement on the minor’s behalf by an authorized adult and the Managers.  In this context, let’s discuss an example of the benefits that by their very nature must continue beyond the stated term of an Indenture, keeping in mind that the Indenture is necessary at all times the Current Beneficiary is a minor but not necessary once the Current Beneficiary is an adult.  Thus, the stated term of an Indenture is up to the date on which the subject Current Beneficiary turns 21 years of age.    

An example of benefits that by their nature must continue beyond the stated term of an Indenture is the obligation, or undertaking, to provide a “home” that includes providing his “residence.” This obligation has at least two attributes.  The first – its residential attribute – is clearly referenced as a separate matter and contemplated as part of providing a home.  However, there must be more to the attribute because there is a reference to providing a home which is to be his residence.  If the reference to providing a home were not intended to mean more than his residence, the Indenture would have just said residence.  Moreover, the Indenture contemplates that the Current Beneficiary’s residence can be changed, while his “home” is always to be “situated at Hershey.”  Thus, as third party beneficiaries of, and a party to, their respective Indentures, the Managers, on behalf of the School, became obligated to provide both Orphans and Scholars: (a) a residence, and (b) a home, including (i) the social unit formed by a family living together (that is, one’s close family and self), (ii) a place to which one intends to return, and (iii) as one grows older, a place of origin and emotional attachment.  The School Family results from such promise to provide a home, and is a core component of the School.  Moreover, the Managers, again acting through its agents pursuant to these trust obligations which originated, in part, under the Indentures, manifested related undertakings or responsibilities for the further development and continued excellent health of the School Family by setting forth responsibility for (1) keeping in touch and corresponding with, keeping a close relationship with, assisting in procuring employment for, and providing other necessary assistance to, all Former Students and (2) looking after the general welfare of all Former Good Students, Former Commendable Students and Original Alumni Association Members, as well as (3) looking after the general welfare of those who were formerly students at The Hershey Industrial School and left there with a good record.  Collectively, we refer to these as the “Trust’s School Family Obligations.”

In other words, the Trust’s School Family Obligations give rise to “School Family Benefits,” which means, in the case of each Current Beneficiary, the benefits derived from being provided a “Home.” Providing a Home and School Family Benefits to those who are admitted to the School is fully in accord with the high Hersheys’ Philanthropic Standard. The following, Diagram 11: Relationships Resulting from Indenturing, illustrates the relationships resulting from Indenturing:

 

 

 

 

 

 

Beneficiaries of the Trust

Each person who satisfied the Requirements for Admission, is admitted to the School and receives, or is entitled to receive, benefits from the Trust either because the person (i) has not been discharged, (ii) has been discharged but continues to receive, or is entitled to receive, benefits from the Trust because the person is a Scholar whose Scholar Education Completion Date has not occurred, or (iii) is a Former Student receiving School Family Benefits is a “Current Beneficiary.”  A person who is able to satisfy the Requirements for Admission, but is not a Current Beneficiary, is a “Contingent Beneficiary.”  All Contingent Beneficiaries and Current Beneficiaries constitute the “Beneficiaries” of the Trust as a whole.  There are no other beneficiaries of the Trust outside those two groups, other than pursuant to the legal fiction that the Attorney General of the Commonwealth of Pennsylvania is a beneficiary of the Trust so as to ensure consistent enforcement of the Deed of Trust.

The following table sets forth the various groupings of beneficiaries of the Trust:

 

Table 1:  Beneficiaries of the Trust

 

Beneficiaries of the Trust
Term	Meaning
	Attorney General, Current and Contingent Beneficiaries
Beneficiaries	All Contingent Beneficiaries and Current Beneficiaries constitute the “Beneficiaries” of the Trust as a whole.  There are no other beneficiaries of the Trust outside those two groups, other than pursuant to the legal fiction that the Attorney General of the Commonwealth of Pennsylvania is a beneficiary of the Trust so as to ensure consistent enforcement of the Deed of Trust.
Attorney General	Pursuant to the legal fiction that the public is the beneficiary of a charitable trust, the Attorney General as the chief legal officer of the Commonwealth of Pennsylvania is responsible for the enforcement and protection of the Trust, as the protector, supervisor, and enforcer of charitable trusts generally.
Contingent	A person who is able to satisfy the Requirements for Admission, but is not a Current Beneficiary.
Current	Each person who satisfied the Requirements for Admission, is admitted to the School and receives, or is entitled to receive, benefits from the Trust either because the person (i) has not been discharged, (ii) has been discharged but continues to receive, or is entitled to receive, benefits from the Trust because the person is a Scholar whose Scholar Education Completion Date has not occurred, or (iii) is a Former Student receiving School Family Benefits.
Resident and Non-Resident Beneficiaries
Resident		Each Current Beneficiary who is receiving the education provided directly by the School, as well as receiving food, clothing, lodging, health services, physical training, exercise, and recreation directly from the School and lives on the Hersheys’ Children’s Home Campus.
Non-Resident		Each Current Beneficiary who no longer lives on the Hersheys’ Children’s Home Campus and either (a) has received his Direct Education and now is pursuing, or is going to pursue, the part of his mandated education that is provided through other schools, colleges, and universities and not by the School  or (b) is receiving only School Family Benefits.

 

Beneficiaries of the Trust
Term	Meaning
Orphans and Scholars
Orphan	Each Current Beneficiary who is not a Scholar, which would include any Current Beneficiary who, after repeated attempts are made to change the attitude of such person so that the Trust can help, is nonetheless: a)       not worthy either because of such person’s (i) unwillingness to apply themselves or (ii) nasty desire to break the rules of the school, or b)       not demonstrating sincerity of purpose in the program which such person is undertaking, or c)       more of a hindrance than a help and does not, and will not, cooperate in taking what the Trust has to offer, or d)       a person who does harm and will accept no good. Generally, an Orphan is a child who became a Current Beneficiary, but failed to evolve into a Scholar.
Scholar	Each Current Beneficiary who is doing his best to take full advantage of the opportunities presented to such person through the Trust. It is implicit in the terms of the Trust and each Indenture that it is the responsibility of the Managers to exercise all reasonable care to cause each Orphan to develop into a Scholar.

 

 

 

Benefits Under MS' Deed of Trust & Indenture

The various groupings of Beneficiaries set forth in the previous section become relevant in different contexts.  For instance, financial planning by the Trustee and the Managers should consider many things, including Current Beneficiaries, Contingent Beneficiaries, and Scholar Additional Education.  Each group requires careful financial planning and decisions that are in the best interest of each Current Beneficiary.  The Managers are required to make distinctions between Scholars and Orphans.  These groups receive different benefits under Milton Hershey’s Deed of Trust.  Here we focus on the additional benefits to be derived by Scholars versus Orphans.

Below is a breakdown of the various groupings of benefits that the Current Beneficiaries receive under Milton Hershey’s Deed of Trust and their Indentures:

 

Table 2:  Capital for Success: Basic Benefits, Education, Character, Self-Reliance, & Family

 

Capital for Success: Basic Benefits, Education, Character, Self-Reliance & Family
Term	Meaning
Basic and School Family Benefits:
Basic	The food, clothing, lodging, health services, physical training, exercise, and recreation contemplated by the first sentence of Paragraph 17 of Milton Hershey’s Deed of Trust, as well as a Minimum Education and School Family Benefits.
School Family	The benefits derived from being provided a “Home,” which Home includes: (a) a residence at the Hersheys’ Children’s Home Campus while a Resident Beneficiary, (b) being a part of the social unit formed by a family living together  – that is, the “School Family,” (c) while a Non-Resident Beneficiary, a place to which one intends to return, and (d) such Current Beneficiary’s place of origin and emotional attachment, as well as being part of the School Family as it further develops and enjoys continued excellent health through the Managers and other members of the School Family (1) keeping in touch and corresponding with, keeping a close relationship with, assisting in procuring employment for and providing other necessary assistance to, all Former Students and (2) looking after the general welfare of all Former Good Students, Former Commendable Students and Original Alumni Association Members, as well as (3) looking after the general welfare of those who were formerly students at The Hershey Industrial School and left there with a good record.
Education
Minimum	Until such person reaches 18 years of age, the Vocational, Agricultural, and Academic Education contemplated by Paragraph 17 of Milton Hershey’s Deed of Trust designed to fit such person for the trades such person is to learn, and a useful occupation in life.
Character	The moral and religious training, training to speak the truth at all times, and training in the habits of economy and industry contemplated by Paragraph 18 of Milton Hershey’s Deed of Trust.
Self-Reliance	Both before and after leaving the School, programs designed to ensure each Scholar’s effective and healthy assimilation into society in preparation for becoming self-reliant, provided directly by the Trust and in cooperation with the Alumni Association (e.g., mentor, transition, placement, and other programs).
Vocational, Agricultural, and Academic	Both before and after leaving the School, the education contemplated by Paragraph 17 of Milton Hershey’s Deed of Trust, which is instruction in the several branches of a sound education, agriculture, horticulture, gardening, such mechanical trades and handicrafts as the Managers may determine, and such natural and physical sciences and practical mathematics as in the opinion of the Managers it may be important for the Orphans to acquire, and such other learning and science as the tastes, capacities, and adaptability of the several Scholars may merit or warrant, to fit themselves for the trades they are to learn, and a useful occupation in life, bearing in mind that the main object in view is to train young men to useful trades and occupations, so that they can earn their own livelihood; one of the objects of the School being to teach and instruct in agriculture, horticulture, and gardening, each Orphan admitted to the School shall at such time or times as may be required, do such work upon the farms as may suit his capacity and ability, including vocational, agricultural, and academic.
Direct	Education which is provided directly by the School.
Indirect