Sunday, April 13, 2008

Gifts with Limitations Stump Universities

Sunday's New York Times contains an interesting article detailing how gifts to universities sometimes create more headaches than they were intended to.  In When Strings Are Attached, Quirky Gifts Can Limit Universities, Karen W. Arensen reports on how restrictions placed by donors on endowments and other gifts sometimes leave universities unable to use the funds.  According to the report, at some universities like Harvard and University of Texas, 80 percent or more of endowments are constrained by donors' wishes.  Arensen reveals that interviews with college officials indicate that "while many restrictions are for broad uses like faculty chairs and student aid, others are less central to the functioning of a modern university. Some are outright quirky."

The article gives examples of some of these "quirky" restrictions -- such as a gift to Virginia Tech to grant scholarships to students from Warwick County, a county that no longer exists.  Sometimes, universities end up having to seek court permission to use a gift in a manner contrary to the expressed -- but no longer practical -- intent of the donor.  At other times, if the donor or his or her heirs are still living, the university can simply request permission to use the gift for a different, more relevant purpose.

VEJ    

http://lawprofessors.typepad.com/nonprofit/2008/04/gifts-with-limi.html

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