Relatives of Charles S. and Marie Robertson said the couple wanted their gift to be spent solely to educate graduate students for careers in government, especially as diplomats for the United States.
But the family now says the university has not churned out many diplomats and large portions of the gift — now worth more than $750 million — have been used for other purposes. The family wants to take the money back so it can give it to a school that will carry out its mission.
Lawyers for the Robertson family and the university were due in state Superior Court on Tuesday to start two days of legal arguments hashing out the parameters of a trial that is at least several months — and maybe years — away. It is a lawsuit being closely watched by charities and conservative activists.
When the late Charles and Marie Robertson anonymously donated $35 million in 1961, they hoped to turn the graduate school at Princeton's Woodrow Wilson School of Public and International Affairs into a finishing school for United States government spies and diplomats.
The school is undeniably prestigious. After the Sept. 11 attacks, for instance, it helped train Afghan leaders in the workings of democracy and its impressive lineup of guest lecturers includes Kofi Annan, the secretary general of the United Nations who is scheduled to speak Tuesday.
But the number of government agents turned out by the school has been too low for the heirs of the Robertsons. They sued in 2002, saying the school should return more than $200 million the family claims was inappropriately used by the university. The family also says it would use all the money in other ways to support Charles and Marie Robertsons' goals.
"Princeton takes the position that this gift was made to Princeton University," said Seth Lapidow, a lawyer for the Robertsons. "The plaintiffs believe Princeton was just the instrumentality of the gift — and the gift was to the American public."
While the lawsuit could reverberate through the nonprofit world, the arguments scheduled for Tuesday and Wednesday are largely technical, delving into tax laws, complicated accounting formulas and the governance of the Princeton-controlled board that controls the Robertson Foundation and the relationship between that foundation and the university.
Princeton wants to be recognized as the sole beneficiary of the gift so the money could not be granted to other institutions.
The school argues that letting the money be taken away would be a blow not only to Princeton, but to the freedom of universities to make their own decisions.
Even if the judge rules against the family in every issue at this week's arguments, the case would go forward on the basis of the fraud claims against Princeton, Lapidow said.
By Geoff Mulvihill