A model law would let donors sue over broken endowment terms, and charities are split on it

A model state law that would let donors and their legal representatives sue a charity that breaks the written terms of an endowment gift is gaining ground, and drawing pushback, the Chronicle of Philanthropy reported on October 13. The Philanthropy Roundtable, which promotes the model, called the Safeguarding Endowment Gifts Act, has released a report urging states to adopt it. The Chronicle said versions have passed in Kansas, Georgia, Kentucky and Montana since 2023, and that an Oklahoma Senate committee held a hearing on it this month.

What the laws say

The four laws do not share a name. Kansas (2023), Georgia (2024) and Kentucky (2024) passed Donor Intent Protection Acts, while Montana's governor signed the Safeguarding Endowment Gifts Act, Senate Bill 134, on April 17, 2025, according to an analysis by the law firm Faegre Drinker. Iowa has allowed donor standing on endowment gifts since 2008, the firm said.

As the Chronicle described the model, it covers only endowment gifts. A donor or legal representative could sue within six years of discovering a violation, though some states set shorter periods; Montana's is three years. There is a 90-day period for informal resolution before a suit. Remedies must be consistent with the charity's mission: money cannot go back to the donor, but it can be moved to another charity.

Under most state laws, the Chronicle noted, attorneys general are traditionally the only party that can sue to enforce a gift, apart from narrow exceptions for people with a "special interest." That is the gap supporters want to close.

The case for it

The Roundtable's report, by Dan Kelly, a former Wisconsin Supreme Court justice, reviewed 21 recent cases in 12 states, according to the Chronicle. It found that courts often ruled donors lacked standing and, in at least half the cases, never addressed whether the agreement had been broken. Examples include a suit by Norman Rockwell's sons after the Berkshire Museum in Massachusetts sold paintings he had donated, and a suit by the estate of a donor who gave Dartmouth College $1.8 million for golf course maintenance before the college closed the course in 2020. Both were turned away on standing.

"This bill just gives the donor a voice — that's all it does," Claudia Cummings, the Roundtable's senior vice president of public affairs, told the Chronicle. Doug White, a philanthropy adviser, supports the approach if it stays narrow. "If anybody can sue, there would be chaos," he said.

The case against it

Roger Colinvaux, a law professor at the Catholic University of America, pointed the Chronicle to a 2023 study he wrote finding that 69 percent of the net assets at 96 large charities were subject to donor restrictions. Giving donors the right to enforce those terms in court means "you're creating this culture of giving that favors donor restrictions and might make it harder for charities to get unrestricted funds," he said.

Greg Willems, president of the Kansas State University Foundation, wrote in 2023 testimony against the Kansas bill that it would "cause substantial confusion and be a significant drain on charitable organizations' focus and resources," and argued that "legal representative" was undefined, the Chronicle reported. He did not respond to the Chronicle's interview requests.

What your board can check this month

We have not read the bill text in every state, and the details differ. In our view, the practical lesson holds either way: a gift agreement is only as clear as its wording. Boards can check whether each endowment agreement says what the money is for, who may ask about it, and what happens if the purpose becomes impractical. For why a written restriction binds a charity in the first place, see a restricted gift is a promise, and for how much of one large institution's giving already arrives restricted, see Harvard's latest gift report.