Category Archives: UMIFA

Managing Donor Restricted Gifts

Giving donors the power to restrict their gifts for a specific purpose or program or to restrict the timing and amount of expenditures can be a powerful giving incentive. Restrictions give donors comfort that their gift will be used as they envision.Continue Reading

Nonprofit Law Jargon Buster: What is the Doctrine of Cy Pres?

From time to time, charities are faced with what to do with a restricted gift when the terms of the donor’s restriction can no longer be fulfilled. The doctrine of cy pres permits the courts to modify the charitable purpose of a charitable trust to a purpose that reasonably approximates the designated purpose, where the designated charitable purpose becomes unlawful, impossible, or impracticable to carry out or where it becomes wasteful to apply all of the property to the designated purpose. Continue Reading

Nonprofit Law Jargon Buster: What is an Endowment?

Black’s Law Dictionary, 9th ed., defines an endowment as: A gift of money or property to an institution (such as a university) for a specific purpose, esp. one in which the principal is kept intact and only the interest income from that principal is used. This is the popular definition familiar to most nonprofit executives.Continue Reading

Permanent Endowment = Infinity and Beyond

Most non-profits understand that if a fund is a permanent endowment, the principal must be preserved in perpetuity. Still, in my practice and in the ASU Lodestar Center course I teach on non-profit law, I am often surprised by how little some fundraising professionals understand about the mechanics of gift restrictions – particularly the implications of permanent restrictionsContinue Reading