FundSvcs Community

We recently received a gift of several paintings from a donor.  When we accepted the gift, we'd originally intended to display the art on campus, which is what we wrote in the Deed of Gift with the donor.  Since then, the department that was going to mount the art has decided they no longer wish to display the collection.  Now we're unsure what will be done with the art; it's possible that the works could be displayed together or separately elsewhere on campus, or that it could be sold at our gala's silent auction in 2 years.

While we should let the donor know that we're considering other options for the art, WHEN/must we amend the Deed of Gift?  Especially since the timeframe at which a decision will be made is unknown.

I would inform the donor right away that your original plan and timeline for hanging the art is not going to go through, and that you're considering alternatives. Even putting aside the issue of the gift agreement, if you sell the paintings within 3 years of them being contributed, and they're worth more than $5k, the donor will not be able to take the full deduction, they will only be able to take a deduction for the difference in FMV and their basis in the paintings. (I'm assuming the donor isn't the artist). 

As to the gift agreement, the first question is whether it needs to be amended at all. Typically, it would not, as language of the sort Aaron mentioned would be included. If your agreement restricts you from using the paintings in some other way, I would seek advice from counsel about your obligations and their timing.