The Restricted Gift Life Cycle, or, What Comes Around Goes Around
Fordham Law Review, Vol. 76, No. 2, p. 693, 2007
41 Pages Posted: 24 Jun 2008 Last revised: 11 Sep 2008
Date Written: 2007
The conflict regarding enduring donor control over property gifted for charitable uses implicates issues of current relevance to donors and nonprofit charitable organizations, and to those who represent them. Not surprisingly, these issues, and the possible ways of both addressing and accounting for their resolution, vary by circumstance. In this Article, I frame the issues and explore the relevant circumstances by reference to the particular stage in the lifecycle of a donor's restricted gift at which conflict might arise. That lifecycle spans the time from initial negotiation of the gift to its potential modification or termination due to unanticipated circumstances. In between, of course, is the period during which the charitable organization is actively engaged in managing the restricted gift in pursuit of the organization's broader mission.
Framing the issues in this manner permits an exploration of several important ideas and offers insights into the concerns that affect restricted giving and the management of restricted gifts. First among these is the question of whether restricted gifts can, in fact, be viewed as having a particular lifecycle comprised of discrete stages. The answer, not surprisingly, is yes, as elaborated upon in Part II of this Article. Second, acknowledging this restricted gift lifecycle focuses attention on specific influences driving the noted dead hand dynamic at various stages in that evolution, with resulting implications for both the donor and recipient organization. These influences and implications are the subject of Parts III and IV, with particular emphasis in Part IV upon the fiduciary duties attendant to a charitable organization's management of a restricted gift.
Finally, the forced effort to evaluate a given influence as relevant to only one stage in the noted lifecycle is difficult to maintain. It is, in other words, impossible to isolate a particular consideration as playing a limited role at a single, finite point in the evolution of a charitable organization's ongoing efforts to accommodate donor directives. This evaluative effort, however, ultimately highlights the pervasive relevance of each such influence throughout the organization's dealings with the donor and her enduring demands. This, in turn, suggests that a more comprehensive donor and organizational perspective towards their restricted gift dealings might at all times illuminate more mutually advantageous choices and opportunities, thus reducing the overall level of conflict throughout the life of that gift. Demonstrative of these points is the ongoing dispute between Princeton University and certain descendants of Charles and Marie Robertson, which dispute is explored more fully in Parts V and VI.
Keywords: Charitable Giving, Fiduciary Duties, Donor Control, Cy Pres, Restricted Gift, Robertson v. Princeton, Dead Hand, Nonprofit Organizations, Nonprofit Management, Princeton University, Robertson Foundation, Fiduciary Duty of Care, Fiduciary Duty of Loyalty, Fiduciary Duty of Obedience
JEL Classification: L3, L30, L31, L39, K10, K11, K19, K29, K30, K34, K49, L20, M10
Suggested Citation: Suggested Citation