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  • 1.  Broad Trust Language

    Posted 11-15-2024 02:49 PM

    Hi - We have an instance where a donor passed and left our organization in their trust. The documentation says, "$X to fund scholarships for the ABC program." We now have the funding and are curious if we can allocate to several funds on campus that are scholarships to that program. Specifically, one ABC program scholarship is endowed and has a few more minor restrictions. Another fund we'd like to move some of the gift to would be an endowed scholarship to the ABC program for first-year students. 

    Since the documentation doesn't say "endowment", can we endow this gift? Also, if the funds we want to allocate the gift to are ABC program scholarships, but have an additional preference or further restriction, does that mean we cannot allocate the gift there?

    We would still be following the donor's intent by funding ABC program scholarships. Do the additional restrictions on the existing funds and that they're endowed prevent us from allocating the gift there?

    Thank you!



  • 2.  RE: Broad Trust Language

    Posted 11-15-2024 02:58 PM
    Nick, it would be best if you spoke with the trust administrator.

    A big challenge with situations like this is when the recipient organization is not asked to help with the trust language. What happens, for example, if your organization cancels the ABC program? The trust language doesn't allow for that.

    You should draft a short paper outlining your plans for the funds, proving that your plans align with the donor's intent. Then, add to that paper a "savings clause" you will adhere to in the event the ABC program is stopped or merged with another (I've been involved in both instances at Duke and NC State-you have got to get some sort of language in that paper!).

    Schedule a meeting with the Executor, Trustee, Administrator, or whoever can approve your plan. Convince them of the plan, and both parties will execute the addendum/agreement.

    John

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

    919.816.5903 (cell/text)

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