Jeff and Sarah,
Thank you for this additional input. My takeaway is that we can move forward to establish this endowment with the documentation we have. We are fortunate that the purpose the donor indicated is one we should be able to easily honor down the road. However, the most prudent course of action to eliminate any risk for the institution would be to work with the executor of the estate to establish a gift agreement with UPMIFA language to give us flexibility should we have any issues spending the endowed funds down the road.
Is that a fair high-level recap?
Thank you so much for lending your expertise,
Leah
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Leah Richards
St. John Fisher University
lrichards@sjf.edu------------------------------
Original Message:
Sent: 01-05-2024 08:12 PM
From: Sarah Thomas
Subject: Establishing Endowed Fund from Bequest Document
Good evening,
Navigating the scenario of requiring an agreement or accepting a gift through a will is inherently nuanced. The necessity for such documentation hinges on the specifics outlined in the will, introducing potential complexities.
- In instances where an endowment is already in place to establish a fund for the same purpose, and the donor is not requesting a named fund, there may be no immediate need for a separate agreement.
- I have seen endowments created just by using a will as the gift documentation. However, challenges may arise, especially when dealing with older funds subject to jurisdictional wills. In such cases, the absence of a Uniform Prudent Management of Institutional Funds Act (UPMIFA) clause in the will and the potentially questionable legality, reasonableness, or feasibility of the fund's purpose can pose challenges, as highlighted by Jeff.
- We have established a named endowment through an internal gift agreement in the past. It's important to note that the effectiveness of such an approach may depend on the specificity of the fund's purpose and the will.
- Presently, we are in the process of collaborating with the executor of an estate to establish an endowment in honor of the individual he represents.
Things to take into consideration:
1. State Probate Laws
2. Estate Administration
3. Uniform Prudent Management of Institutional Funds Act (UPMIFA) (depends on the state): UPMIFA may be relevant. This law provides guidelines for the prudent management and investment of charitable assets, including endowment funds.
In light of the complexities involved, I recommend engaging our legal team and planned giving to navigate this situation judiciously. Furthermore, the inclusion of Finance in these discussions would be advantageous.
Ultimately, the most prudent approach is contingent upon the specifics delineated within the will. I urge a comprehensive review to ensure that all legal and practical considerations are duly addressed.
It's crucial to involve legal professionals and, if applicable, financial advisors to navigate the legal intricacies associated with the bequest. Every situation is unique, and seeking professional guidance will help ensure that your organization handles the bequest appropriately and in accordance with the law.
Original Message:
Sent: 1/5/2024 1:43:00 PM
From: Leah Richards
Subject: Establishing Endowed Fund from Bequest Document
Greetings!
We received dollars from an unanticipated bequest with accompanying documentation from the will outlining the donor's intent. There is no documented gift agreement.
Our Finance partners doubt that we can create an endowed fund from an estate document, citing that an endowment requires a gift agreement that is prepared and submitted prior to establishing an endowment fund.
Provided we can honor the donor's intent, I judged the documentation to be enough to establish the fund as it is not in conflict with any of our existing institutional policies (it meets our threshold, etc.). Can others weigh in so I can share additional support for this approach with Finance? Or, do we need to get additional documentation or work with the executor of the estate before establishing this fund?
Thank you!
Leah
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Leah Richards
St. John Fisher University
lrichards@sjf.edu
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