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  • 1.  Endowed fund with many donors and no signed gift instrument

    Posted 10-07-2024 03:55 PM
    We have a class endowed fund that many members of the class have given small amounts to since 1999 which supports specific maintenance work in a building on campus. There is no large cornerstone or founding donor, and a Document of Understanding was never signed by members of the Class. In 2016, the college developed a DOU to document the use of the fund; the DOU doesn't possess signatures, but names the then class officer as the fund contact.  
    Over the years, we've seen the income from the fund accumulate because it can't be spent for the use as reflected in the DOU.  We'd like to revisit the 2016 DOU to expand the fund's use to better be able to spend it.  Given the fund's history, are we able to simply update the college's DOU to reflect an expanded purpose of this fund?  Or does this require more work with the Attorney General or court?  The class officer who is listed as the fund's contact on the 2016 DOU is still alive, but most of the class members who donated have passed.


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    Gwen Donev
    Gustavus Adolphus College
    gwendonev@gustavus.edu
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  • 2.  RE: Endowed fund with many donors and no signed gift instrument

    Posted 10-07-2024 04:27 PM
    Two things:
    1. This is not that uncommon. Many colleges and universities have "Group Donation" policies that outline how to handle "class of" or "pass the hat" donations and similar when there is no primary donor - and only a general notion regarding the use of the funds. The policy establishes the College's authority to repurpose the gift should circumstances change or the original purpose be unsustainable. So, step 1 is to create a simple (one-pager!) policy to help you in the future.
    2. In this case, I suspect that by working with Counsel to ensure no State laws (like UPMIFA) are violated, you can craft a new MOU that redirects the expenditures in keeping with the original intent. However, as you did not have a policy that granted you cart Blanche to make those changes, I suspect Counsel will ask you to notify, in writing, all donors of the planned change. I don't think they have to "approve" the change. However, a notification is appropriate, and if any original donor does not like the new plan, you can offer to move their original gift to a different fund.
    John

    John H. Taylor, Principal
    John H. Taylor Consulting, LLC
    2604 Sevier Street
    Durham, NC     27705

    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987




    Original Message


  • 3.  RE: Endowed fund with many donors and no signed gift instrument

    Posted 10-07-2024 04:32 PM
    Hi Gwen, 

    By a strict reading, it sounds like donors had a pretty good view of what the money would be spent on when they made their gifts, and the 2016 DOU was a best effort at reducing that understanding to a document. I don't think you can simply update the DOU now, unilaterally. Assuming the fund is more than $50k, I think you need to petition the court. But of course, talk to counsel, I'm not your lawyer!

    Thank you,
    Isaac Shalev
    Data Strategy Expert
    Sage70, Inc.
    (917) 859-0151
    isaac@sage70.com

    Schedule a 30-minute consultation now:




    Original Message


  • 4.  RE: Endowed fund with many donors and no signed gift instrument

    Posted 10-07-2024 04:49 PM
    Isaac is right. You may need to go the AG route. Counsel will make that determination for you. And it will depend substantially on how the DOU was written. The absence of any signatories could benefit you as it potentially makes the collected funds available at your discretion. Only a lawyer can help with that.

    I have (in North Carolina) been advised by Counsel to go both ways Isaac and I have described. Going to the AG isn't a big deal. However, in each instance of redirecting "group" donations, Counsel and the Courts required written notification to all donors/heirs.

    John

    John H. Taylor, Principal
    John H. Taylor Consulting, LLC
    2604 Sevier Street
    Durham, NC     27705

    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987





    Original Message


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