“Protecting Donors of Restricted Charitable Gifts in Hard Economic Times,”
A recent front-page article in the Wall Street Journal detailed the economic hardship confronting universities and colleges in today’s recession, and the difficulties they are having finding the cash for ongoing expenses such as maintenance, faculty salaries, financial aid for students, and other urgent needs. Faced with gaping holes in their operating budgets, many universities are looking to the large pool of restricted gifts held in their endowments (which can account for as much as three-quarters of a school’s endowment) and are seeking to have restrictions lifted or to otherwise gain unrestricted access to the restricted gifts.
Not surprisingly, given these economic pressures, many donors of restricted gifts, their relatives and other interested parties have concerns that the original intent of their gifts may not be fully honored by universities and other donee institutions, such as museums, hospitals, and other not-for-profits. This Stroock Special Bulletin looks at some of the ways in which a properly prepared donation agreement can ensure that the donor’s original intent is honored and that the donor and others can easily monitor and enforce the terms of the agreement.