Can you borrow from "designated funds" to pay other bills, and then replace the funds later?
a serious risk in using donor restricted funds for a purpose
different from the purpose designated by the donor. In Pennsylvania,
the CEO of the Allegheny Health Education and Research Foundation
was convicted of misappropriation of entrusted property and
sentenced to up to two years in a halfway house for using
funds designated for scholarships and research for the general
purposes of various hospitals before they filed for bankruptcy.
Nonprofit Issues®, September 2002.) At the
very least, you run the risk of civil liability for breach
of fiduciary duty, especially if you can’t pay the money
back to the designated fund. It may come out of your own pocket.
Planned giving sounds complicated, with its CRUTs and CRATs, CLUTs and CLATS, and CGAs. It can be incredibly complicated, but it needn’t be. Keeping it simple may be the best way to start a planned giving program for a charity that hasn’t already put one in place.
This webinar offered a review of major planned giving instruments and a discussion of ones that make the most sense to emphasize in starting a planned giving program. It discussed the advantages of integrating planned giving into an existing development program, targeting the best prospects, getting buy-in from the board that is likely to generate results, and setting a structure to make it all happen.
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