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  • 1.  Gift Agreement Language

    Posted 09-11-2022 01:57 PM
    Dear All,

    I was wondering if other universities use the below language in their gift agreements, we find it too harsh, but the Legal Office insists on having in the agreements. Just wondering fi you are using the same language, especially since the university will never go to court if a donor does not fulfill their pledge.

    Donor Obligations

    The Donor hereby acknowledges and agrees that the Donor's obligations hereunder are irrevocable and may be enforced against the Donor and shall extend to, and be binding upon, the Donor as well as the Donor's executors, trustees, administrators, representatives, heirs, and assigns.


    Thank you for your help as usual

    Regards
    Farida
    Farida Ahmed
    Director, Gift Administration 
    The American University in Cairo

    ------------------------------
    Farida Ahmed
    Director, Gift Administration
    The American University in Cairo
    farida@aucegypt.edu
    ------------------------------


  • 2.  RE: Gift Agreement Language

    Posted 09-11-2022 02:16 PM
    I rarely see language like this.  From a donor relations perspective, it can be seen as offputting.  And, to your critical point, it's even rarer that a donor or their estate is sued for unfulfilled balances.

    I have seen references to pledges being satisfied by the estate if not completed while the donor is alive.  However, including that language is unnecessary if the original pledge was legally binding.  It automatically becomes a debt obligation the estate must consider with all other legally binding commitments.

    John

    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


  • 3.  RE: Gift Agreement Language

    Posted 09-11-2022 02:34 PM
    I should add that not all pledges are legally enforceable.  This nifty article reminds us that the famous "Giving Pledge" folk with huge wealth are making are not.

    But what is important and relevant to your question and supportive of my response is the last sentence in this article:


    "If the charitable pledge is an enforceable contract, it is binding on the donor and, if the donor is an individual, the pledge is enforceable on the donor's estate."

    So, adding language as you offered is redundant.

    John
    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


  • 4.  RE: Gift Agreement Language

    Posted 09-11-2022 05:06 PM
    Good evening, 

    We never place pledge information within the gift agreement. My thoughts are is the gift agreement is just about the fund purpose and fund administration. Typically the pledge is not legally binding, but the gift agreement is. I would recommend removing that language from the gift agreement. 




    Original Message


  • 5.  RE: Gift Agreement Language

    Posted 09-12-2022 01:45 AM
    Thank you Sarah for your help here

    ------------------------------
    Farida Ahmed
    Director, Gift Administration
    The American University in Cairo
    farida@aucegypt.edu
    ------------------------------

    Original Message


  • 6.  RE: Gift Agreement Language

    Posted 09-12-2022 07:54 AM
    Good morning, 

    I don't think I was clear last night because I was typing too tired, LOL. I would like to state the pledge can be enforceable, meaning it is legally binding, but universities tend not to go after paid pledges. In rare cases, I have seen it happen. 

    The gift agreement has to be legally binding due to federal and state laws, as John states. The gift agreement is also a legally binding contract as well because we must administer the gift correctly, and the donor can legally go after us as well. This is why I don't like pledge information in the gift agreement, and they should be separate from each other. 

    I hope this is clear than my email last night. 




    Original Message


  • 7.  RE: Gift Agreement Language

    Posted 09-12-2022 01:34 AM
    Dear John, 

    Thank you for your answer, can you explain more what is an enforceable contract?

    ------------------------------
    Farida Ahmed
    Director, Gift Administration
    The American University in Cairo
    farida@aucegypt.edu
    ------------------------------

    Original Message


  • 8.  RE: Gift Agreement Language

    Posted 09-12-2022 05:07 AM
    It essentially means legally binding.  It is a contract wherein the individual is legally bound to honor their commitment.  Failure to do so would break certain contract (and state) laws.  You could then sue the individual for satisfaction.

    John

    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


  • 9.  RE: Gift Agreement Language

    Posted 09-12-2022 09:05 AM

    Briefly, whether a pledge is enforceable depends on the law that applies to the pledge. 

     

    In the U.S., it generally depends on state law, which varies from state to state, but is generally based on either (or both) of two concepts, detrimental reliance (essentially, that the organization took some action based on the pledge such that the organization would be harmed if the pledge was not fulfilled) and consideration (the donor received something of value in return for the pledge).

     

    A web search will likely turn up more detail on how this works and the law in various states, for example:

     

    https://www.floridaestateplanninglawyerblog.com/the-law-of-charitable-pledges/

    https://www.wealthmanagement.com/philanthropy/enforcing-charitable-pledges

    https://www.hklaw.com/en/insights/publications/2015/09/enforceability-of-charitable-pledges

     

    I'm not sure how any of that  might apply to your context!

     

    My US$0.02 worthl the usual disclaimers apply.

     

    Good luck!

     

    Alan

     

    Alan S. Hejnal (he/him/his)

    Data Quality Manager

     

    Office of Advancement

    600 Maryland Ave SW Ste 600E

    PO Box 37012, MRC 527

    Washington, DC 20013-7012

    (: 202-633-8754 | *: HejnalA@si.edu

     




    Original Message


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