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  • 1.  Termination clause in charitable gift agreement

    Posted 10-04-2022 02:44 PM
    I recently met with a new outside counsel for our organization who recommended that we include a termination clause in our charitable gift agreements. This isn't something that I have ever included in charitable gift agreements. If your institution includes a termination clause in your agreements, could you please share the language you use?

    Thank you,

    Stephanie

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    Stephanie Carper
    Director of Development
    Openlands
    scarper@openlands.org
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  • 2.  RE: Termination clause in charitable gift agreement

    Posted 10-04-2022 03:20 PM
    It would help if you could define what they mean by a termination clause.

    I am not familiar with that phrase.  I am, however, familiar with the term "savings clause."  Perhaps these are the same.  If so, yes.  You need one!  It explains what happens to the gift if the purpose it was given for ceases to exist.

    Here's how we described it when I was at NC State 15 years ago.  They probably have similar language today:

    What is a Savings Clause?

    A Savings Clause is a clause in a gift agreement that allows the University to revise or modify the gift of the donor if the criteria or purposes of the gift is no longer lawful.  A Savings Clause must be present in all gift agreements.   Examples of Savings Clauses include:

    "Donor agrees that the university may modify the criteria for this gift over time if it determines that the purposes of the gift are in whole or in part contrary to law or changes occur such that the program or purpose is unable to be fulfilled. In such an event, the university shall use the gift in the matter that most closely satisfies the intentions of the donor to the extent possible."

    "The University may modify or disregard any selection criteria if determined in whole or in part to be contrary to law or then existing University policies."


    "The wishes of the Donors shall be loyally observed, so long as in the opinion of the University such wishes do not conflict with the proper administration of the University under changes that may develop in the course of time or are in contrary to law.  Should such changes occur, the University shall use the gift in a manner that satisfies the intentions of the Donors as closely as possible."
    John H. Taylor
    Principal
    John H. Taylor Consulting, LLC
    2604 Sevier St.
    Durham, NC   27705
    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987




    Original Message


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