Introduction by Jack Salmon
Preserving the original intention of donors is crucial for establishing and upholding trust between donors and charitable organizations. This trust is essential for fostering the generous contributions that sustain a vibrant philanthropic sector and the private charities that help those in need.
Unfortunately, the rising instances of ideological and mission drift in numerous charities, including educational institutions like colleges and universities, often leads to a disregard or violation of donors’ intentions.
In light of these growing issues, Philanthropy Roundtable has partnered with the law firm Boyden Gray PLLC to produce this first of its kind report on donor intent conditions in all 50 states. It provides a comprehensive state-by-state overview of the current landscape of charitable donor intent protections, identifying key challenges and opportunities to ensure donors remain confident in their robust giving to diverse causes and communities.
Insufficient legal safeguards in numerous states exacerbate the threats to giving, where the Uniform Prudent Management of Institutional Funds Act (UPMIFA) serves as a foundational standard but falls below the mark in guaranteeing the preservation of donor intent. To make matters worse, many states have amended the UPMIFA to explicitly permit the consideration of factors beyond donor intent and even beyond the direct charitable purpose in the management of charitable funds. This includes the authorization to take into account environmental or social concerns.
UPMIFA permits charities to alter the use of donations without requiring court approval. This flexibility is granted when charities deem the original purpose of the donation to be unattainable, wasteful or impractical to maintain. However, charities can only make these changes if the total value of the donated fund is less than $25,000 and more than 20 years have passed since the donation was made.
Unfortunately, many states have broadened UPMIFAs authorization to modify gift restrictions for larger endowment funds. Many states have also decreased or eliminated the 20-year waiting period following the establishment of the fund.
Our new report compares each state’s law to the standard UPMIFA and explores how relevant court decisions apply these provisions to modify donor restrictions on gifts with real-life cases.
Another important issue the report covers is the condition of donor standing in each of the 50 states. “Standing” refers to who the state will allow to sue in court to enforce some aspect of state law. Most states leave the enforcement of donor intent in the hands of the state’s attorney general.
As our report reveals, only two states — Kansas and Iowa — have adopted donor standing statutes that empower donors to directly protect their intent in legal proceedings. Philanthropy Roundtable testified in favor of the “Donor Intent Protection Act” in Kansas that was signed into law in 2023.
Overall, the findings of this report highlight the ongoing need for more comprehensive legal safeguards and consistency across states to balance donor intent protections with evolving charitable landscapes.