Ten-year review of court rulings and state laws finds enforcement of donor intent “messy, sometimes incoherent and often unpredictable;” four states have adopted a fix since 2023 with more expected to take it up in 2027
WASHINGTON, D.C. – September 16, 2026 – Philanthropy Roundtable today released a report finding that charities can disregard the purpose of a restricted gift while leaving donors with no legal recourse. In many states, only the attorney general may bring such a case, leaving donors or their representatives without standing in court.
“Donors give when they trust their wishes will be honored, but often the law fails to safeguard that trust. In many cases, the court never even asked whether the charity kept its word, because the donor had no right to be in the room. A small legislative fix could have a big impact, and ultimately benefit the charities and the communities that depend on generous giving.” – Philanthropy Roundtable Senior Vice President of Public Affairs Claudia Cummings
The report, written by former Wisconsin Supreme Court Justice Daniel Kelly and titled the “Safeguarding Endowment Gifts Act: The Tao of Enforcing Donor Intent,” surveys a decade of litigation and legislation and concludes that existing common law, trust law and uniform state acts have produced an ad hoc patchwork that protects donor intent on paper but often not in practice. It identifies the Safeguarding Endowment Gifts Act (SEGA), a model state law, as a targeted solution that gives donors the right to enforce written endowment agreements without disturbing existing state law. So far, Kansas (2023), Georgia (2024), Kentucky (2024) and Montana (2025) have adopted SEGA.
The confusion runs deep enough that courts applying the same state’s law have reached opposite conclusions about whether a donor may be heard at all. In California, a man who donated his car to Kars 4 Kids was told only the attorney general could enforce the charity’s obligations, while a federal court allowed Elon Musk’s suit against OpenAI to proceed on the theory that a donor who creates a charitable trust has a “special interest” in enforcing it. The report calls that variability, on so fundamental a question, “indicative of an underlying incoherence in the law.”
Key Findings
- Standing is the primary barrier. Courts routinely dismiss donor enforcement actions without ever deciding whether the gift agreement was violated, because the donor is treated as a legal stranger to a completed gift.
- Existing uniform laws leave gaps. The Uniform Prudent Management of Institutional Funds Act (UPMIFA) requires charities to follow written donor agreements but deliberately omits donor standing. The Uniform Trust Code grants standing to living settlers only, with no successor mechanism.
- Death makes the problem worse. Violations of gift agreements frequently surface after the donor has passed away, and courts have turned away the sons, daughters, executors and estates who tried to step in. Without a durable enforcement mechanism, a gift agreement cannot protect itself once the donor is gone.
“Ten years of court decisions tell a troubling story. The law in this area has grown haphazardly, and enforcement of donor intent is messy, sometimes incoherent and often unpredictable. SEGA solves this with a clear statutory duty: a charity that accepts a gift on written terms must honor those terms, and the donor can hold it accountable.” – Daniel Kelly, lawyer, former Wisconsin Supreme Court justice and author of the report
What SEGA Does
- Establishes a clear duty: a charity that accepts a gift with a written agreement may not violate it.
- Gives the donor, or a legal representative named in the agreement, standing to sue for breach, including after the donor’s death, within a fixed window from discovery of the violation.
- Requires 90 days’ notice before filing, creating room for informal resolution.
- Limits remedies to fixes consistent with the charity’s mission and the agreement. No damages and no return of funds to the donor.
- Applies only to written endowment agreements with 501(c)(3) organizations. Verbal, informal or implied requests and general-fund gifts are not covered, a deliberate limit against a flood of lawsuits.
Illustrative Cases
Ohio State University (Ohio): After Michael Moritz gave Ohio State University $30.3 million to endow four law school professorships and 30 annual scholarships, his family discovered the university had diverted roughly $3 million to development operations and awarded only half the promised scholarships. The family had no legal recourse to enforce the gift agreement.
Newman’s Own Foundation (Connecticut): Paul Newman gave his intellectual property to the Newman’s Own Foundation on the condition it distribute $400,000 annually to his daughters’ charities. After his death, foundation leaders halved the payments. When two of the daughters sued, the court allowed the case to go forward only through what the report calls a “rather creative reading” of the trust agreement that stretched the word “trustee” far enough to include them. The case ended in a March 2025 settlement.
Norman Rockwell and the Berkshire Museum (Massachusetts): Norman Rockwell personally donated two of his finest paintings to the Berkshire Museum on the condition they remain on local public display. When the financially struggling museum decided to sell the paintings to raise general operating funds, Rockwell’s three sons sued to stop the sale. The court ruled they had no standing, concluding their interest was “no different from the public right that may be enforced only by the attorney general.”
Universities dominate the report’s caseload. Beyond Ohio State, it documents failed enforcement efforts involving Dartmouth College, where a $1.8 million bequest for the golf course could not be enforced after the college closed the course, and St. John’s University in Minnesota. There were also two disputes over donor legacies. Middlebury College removed a donor’s name from the chapel he funded, and the California legislature renamed Hastings College of the Law despite an 1878 statute promising the school would “be forever known” by its founder’s name. In both renaming cases, the courts let the change stand.
Report Access
Access the full report here: The Safeguarding Endowment Gifts Act: The Tao of Enforcing Donor Intent
About Philanthropy Roundtable
Philanthropy Roundtable is a trusted partner to America’s most generous and influential charitable donors committed to freedom. By combining a strong defense of donors’ rights with the knowledge and expertise to give effectively, we help our network advance liberty, opportunity and personal responsibility with lasting impact. Learn more: philanthropyroundtable.org.
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