Should We Executive This Donor Agreement?

Nonprofits and donors alike need to be careful when considering a new contribution. Large donations often come with lots of promises made by both sides.

Recently, heirs of a late philanthropist have been trying to stop UCLA from selling a Japanese garden bought with donated funds, which costs the university $140,000 per year to maintain.

The heirs argue that the sale breaches a contract under which UCLA promised to maintain the garden in perpetuity. However, UCLA received a ruling in 2010 clearing the way for the university to move forward with the sale.

It is likely that the parties will be back in court. In the meantime, this is a good reminder for all charities and donors to carefully review every donor agreement with legal counsel experienced with tax exempt organizations prior to execution to understand all of the ramifications of the agreement.