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  • 1.  Updating Endowment Language

    Posted 02-28-2024 12:21 PM
    Hello everyone,

    I have a question related to updating endowment language.  We have a very old agreement for an endowed scholarship that stipulates eligible students must be U.S. citizens, which is a violation of Prop 209 (in California).  We are reaching out to the original donor's family representative, but we learned that a previous attempt was made and he declined to adjust the language.

    If this happens again, what recourse do we have to adjust the criteria?  Is there a workaround?

    Thanks in advance for any guidance!

    Beth


    ------------------------------------------------------------------------
    Beth L. Colbert, '86 '89
    Associate Vice President, Advancement and Campaign Operations

    University Advancement
    San Jose State University
    One Washington Square
    San Jose, CA 95192-0257
    408.924.1119





  • 2.  RE: Updating Endowment Language

    Posted 02-28-2024 01:02 PM
    I'd get bold and tell the donor (if they refuse again) that you can no longer maintain the scholarship as it violates State laws and that you will contact the State Attorney General's office for guidance.

    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






  • 3.  RE: Updating Endowment Language

    Posted 02-28-2024 01:03 PM
    Beth, this is a subject for counsel, but the general parameters under UPMIFA are that small, old endowments whose purposes have become unlawful can be modified by the charity after providing notice to your state's charitable regulator. If your endowment is larger (over $25k) then your recourse is to go to court and ask for a modification. The gift instrument itself may have some terms addressing this situation too. 


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

    Schedule a 30-minute consultation now:






  • 4.  RE: Updating Endowment Language

    Posted 02-28-2024 03:44 PM
    Thanks John and Isaac!  Your answers were helpful and about what I suspected to hear.  Unfortunately, there's no language in the original MOU that gives us any wiggle room and the endowment is larger than $25k.  I hope this time around the family will be more amenable to making the change.

    Thanks again!

    Beth

    ------------------------------------------------------------------------
    Beth L. Colbert, '86 '89
    Associate Vice President, Advancement and Campaign Operations

    University Advancement
    San Jose State University
    One Washington Square
    San Jose, CA 95192-0257
    408.924.1119








    Original Message


  • 5.  RE: Updating Endowment Language

    Posted 03-01-2024 11:29 AM

    Hi Beth-

    Prop 209 disallows preferential scholarship awards based on race, sex, ethnicity, or national origin - all of which are immutable characteristics. Since you don't have to be born in the US to hold US citizenship, are you sure that the US citizenship is prohibited by Prop 209?



    ------------------------------
    Patrick Hunt
    UC Merced
    phunt@UCMERCED.EDU
    ------------------------------



  • 6.  RE: Updating Endowment Language

    Posted 03-01-2024 12:00 PM
    Hi Patrick,

    That is exactly the question I have landed on.  I found some guidance from the CSU on that and will do some studying to determine how it's interpreted.

    Thanks for the response!

    Beth


    ------------------------------------------------------------------------
    Beth L. Colbert, '86 '89
    Associate Vice President, Advancement and Campaign Operations

    University Advancement
    San Jose State University
    One Washington Square
    San Jose, CA 95192-0257
    408.924.1119








    Original Message


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