March 22, 2007 | Read Time: 2 minutes
More and more donors and charities are embroiled in disputes over
how contributions are supposed to be used, reports Fortune magazine (March 19). But donors should take note: A law passed in August, the Pension Protection Act of 2006, contains several provisions designed to send the message that “the more donors restrict their donations, the more they imperil their tax deduction,” says the magazine.
Recent history shows that nonprofit groups usually emerge the victor in such disputes, often because state attorneys general, whose offices oversee charities, “almost always” side with the recipient of a gift, “even if its actions seem to conflict with what the donor had in mind,” says the magazine.
The most prominent case is the Barnes Foundation, an institution in suburban Philadelphia chock full of Impressionist art that will be moved downtown in several years, against the wishes of its founder, who died in 1951. “The Barnes situation is essentially a nonprofit equivalent of a corporate takeover,” says Christopher Knight, an art critic, in the article.
Other disputes include the Robertson family’s lawsuit against Princeton University. The family accuses the university of using their donation — $35-million when it was made in 1961, now worth $750-million — more broadly than was originally intended; the university says it has followed the donor’s instructions and the case is headed to a trial.
In addition, the Georgia O’Keeffe Museum, in Santa Fe, N.M., sued Fisk University, in Nashville, to prevent the university’s sale of two artworks the artist had donated. Last month the two sides struck a compromise: Fisk agreed to raise the money to keep the artworks, and if the effort fails to sell one for $7-million to the museum and the other to another bidder.
The article advises donors who wish for some control to give away their wealth while they are alive. “When it comes to money, the living can spend it, but the dead can only recommend,” says Fortune.
The article is available online at http://money.cnn.com.
