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"if the org closes" endowment language?

  • 1.  "if the org closes" endowment language?

    Posted 07-07-2020 06:37 PM
    We have a donor who wants to add an addendum to her endowment to state where her funds should go if our organization were to be dissolved.  (We don't anticipate that happening!)
    Would this just be an addendum that states that if our college were to be dissolved, she wants her endowment to go to the ABC University to be used for similar endowed scholarships?  Am I missing any details I need to provide to the donor for what her addendum should state?  Is this establishing a "successor beneficiary" or is this a "gift-over provision"?
    Should I be presenting what I learn to our counsel, or should the donor be talking to her counsel, or is this a pretty basic addendum?  Thank you.

     


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    Beth Johnson
    Director of Advancement Services
    Saint Mary's College of California
    eaj5@stmarys-ca.edu
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  • 2.  RE: "if the org closes" endowment language?

    Posted 07-07-2020 06:55 PM
    This request isn't common, but it isn't unusual.  I have worked with many donors wishing something similar.  Although the requests typically relate to mega-gifts.

    I do not think an addendum is needed - unless the endowment already exists.  I've added one sentence adjacent to the scholarship purpose statement indicating what to do if the program the scholarship is for ceases to exist.  I then add, "Should XYZ cease to exist, the then-current balance of the scholarship will transfer to ABC for a similar or the same scholarship purpose."

    If the endowment is already a done deal, then an addendum is fine.  But it doesn't need to be much longer than the sentence above.  However, it is appropriate to confirm with ABC their willingness to accept the terms before agreeing to add the language.  One university I worked with had an additional signature line for that institution.  However, we didn't see a need for that at Duke - other than calling to confirm.  I don't remember such a request when I was at NC State.

    John

    John H. Taylor
    Principal
    John H. Taylor Consulting, LLC
    2604 Sevier St.
    Durham, NC   27705
    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987