Princeton University has agreed to return part of a multimillion-dollar endowment at the heart of a legal dispute that experts say could hurt charitable giving.

The Ivy League school says it has reimbursed the Robertson Foundation $782,000 it used on graduate student fellowships because the spending was not adequately disclosed to the foundation board.

The reimbursement, however, was of no consolation to the heirs of the wealthy family seeking to sever the university’s ties to an endowment that has grown to more than $800 million, their lawyer said.

“This just looks like a public relations ploy,” said Frank Cialone, a lawyer for relatives of the late Charles and Marie Robertson of the A&P supermarket fortune. The heirs sued the university in 2002, claiming Princeton has misused their parents’ 1961 gift of $35 million by ignoring the mission to train graduate students at the Woodrow Wilson School of Public and International Affairs to be diplomats.

Cialone said Princeton did not notify the Robertson heirs about the reimbursement until after notifying the media, and that while it was “nice” to have the money back, the university didn’t address the family’s concerns.

“They haven’t apologized, and they haven’t acknowledged that taking this money was wrong,” Cialone said.

Considered the largest “donor intent” lawsuit in the country, the Robertson’s children and other relatives are seeking control of the foundation funds to use them another way to meet Marie and Charles’ goals, likely at a different institution.

The university repeatedly has denied it misspent the foundation’s funds, including the money it agreed to reimburse.

The university claims the 2000-2002 graduate funding program in question met the foundation’s mission because it paid for students in three departments closely linked with the Woodrow Wilson school – economics, politics and sociology – as a way to attract and retain faculty to the school.

The only reason the university returned the money, said Cass Cliatt, a spokeswoman for Princeton, was because officials didn’t properly notify the foundation’s board about the spending.

“We feel this demonstrates what we have been arguing all along – the good stewardship we are exercising on the foundation board,” Cliatt said. “It’s a gesture showing we are committed to upholding good governance on the board.”

The Robertson heirs argue the graduate funding was clearly outside the foundation mission because it was spent on programs outside the Woodrow Wilson school.

“The university has taken the position that they can do this again tomorrow, and as along as they told the board about it, that’s fine,” Cialone said. “And this is a problem. This was not a governance improvement.”

Cialone suggested Princeton agreed to reimburse the foundation as way to “score points” with the courts. Both sides are awaiting a decision from Superior Court Judge Neil Shuster in Mercer County on a series of pre-trial motions from November.

The motions concern governance of the Robertson Foundation, which includes four university-designated trustees and three family-designated trustees; tax laws; managing the endowment; and whether a jury should hear parts of the case.

A lawyer for the Robertsons argued in November that Princeton treated the endowment like a “cash cow” to relieve the general fund and pay for “pet projects.”

Princeton argues the mission of the endowment is broader than what the Robertsons’ claim, and that it had to change with the times to best train graduates going into public service.

In 2005, 88 percent of the graduates since hired went into public and nonprofit sectors, according to school officials.

The university wants to be recognized as the sole beneficiary of the endowment and argues a judicial decision to take the money away would have grave implications for academia to make decisions about endowments.

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