Estate and Elder Law

The Fine, Football Line between Benevolence and Ill Will: Donor Requests Return of Donations after Falling Out with University’s Athletic Director

As reported by ESPN and the Chronicle of Higher Education, University of Connecticut donor, Robert G. Burton, has requested that the University return $3-million in donations. According to the reports, Mr. Burton's request was motivated by disagreements with the University's Athletic Director. Allegedly, Mr. Burton was unhappy with the Athletic Director's style of management and, despite his request, was not kept informed regarding the school's hiring of a new football coach.

A somewhat similar situation occurred in Tenn. Div. of the United Daughters of the Confederacy v. Vanderbilt Univ., 174 S.W.3d 98 (Tenn. Ct. App. 2005) [enhanced version available to lexis.com subscribers / unenhanced version available from lexisONE Free Case Law], in which the Tennessee Division of the United Daughters of the Confederacy sued Vanderbilt University after the University changed a dormitory's name because of the stigma attached to "Confederate." The case sets out the possible legal framework for Mr. Burton's revocation of the $3-million in donations. As stated in the case:

Where a party makes a donation to a charitable organization accompanied by conditions and a right to reclaim the donation if the conditions are not met, the law treats the arrangement between the parties as either a revocable charitable trust or a charitable gift subject to conditions.

The courts must look to the intent of the donating party to determine whether a particular transaction involves the creation of a revocable charitable trust or simply the giving of a charitable gift subject to conditions. A donating party will be deemed to have created a trust only if the party has expressed with certainty its intent to create a trust. Moreover, the expression of trust intent must be definite and particular, i.e., the donating party must express a particular intent to confer benefits through the medium of a trust rather than through some related or similar device. The mere expression of a donative intent, or a statement of the purpose for which a gift is given, does not constitute an expression of trust intent. Absent a finding of an intent to create a trust, the transaction will be analyzed as a gift subject to conditions.

. . . .

Donors often seek to impose conditions on gifts to charitable organizations. In the case of inter vivos transfers, the conditions are generally embodied in a gift agreement or a deed of conveyance. In the case of transfers to take place on the death of the donor, the conditions are generally contained in the terms of the donor's will.

A conditional gift is enforceable according to the terms of the document or documents that created the gift. If the recipient fails or ceases to comply with the conditions, the donor's remedy is limited to recovery of the gift. Because noncompliance results in a forfeiture of the gift, the conditions must be created by express terms or by clear implication and are construed strictly.

(citations omitted)

Secondary legal of interest:

John K. Eason, Private Motive and Perpetual Conditions in Charitable Naming Gifts: When Good Names Go Bad, 38 U.C. Davis L. Rev. 375 (2005)

Chris Abbinante, Protecting "Donor Intent" in Charitable Foundations: Wayward Trusteeship and the Barnes Foundation, 145 U. Pa. L. Rev. 665 (1997)

Winton C. Smith, Jr., Charitable Giving Exit Strategies: The Enforcement of Restricted Gifts, in 40-8 Univ of Miami Law Center on Est Planning P 802