Scholarship Fund Trustees Fight to Stalemate, Court Prohibits Restrictions on Grants
Individual trustees failed to prove that bank breached its fiduciary duty, bank trustee failed to prove that individuals breached their fiduciary duty
A federal District Court in Virginia has refused to remove the bank trustee of a scholarship fund as sought by two individual trustees and has refused to remove the individual trustees as sought by the bank, saying that neither side had shown that the other breached their fiduciary duty or otherwise failed to function properly. But it has sided with the bank on some substantive issues, including telling the trustees that they could not add conditions to the scholarship grants that are inconsistent with the provisions of the will establishing the fund.
Court grants stay of trustees’ replacement
The federal District Court in Wisconsin has granted a stay in its order to remove the individual trustees of a supporting organization to the Minneapolis Jewish Federation pending appeal of its ruling. The Court had ordered removal of the trustees for breach of fiduciary duty and had ordered the addition of a new bank trustee. (See Nonprofit Issues®, Vol. XXVIII No. 5)
Donors May Sue Fidelity Gift Fund For Dumping Stock After Donation
Court says plaintiffs have standing and have met standards to pursue claims of misrepresentation, breach of contract, negligence
A federal District Court in California has allowed donors of $100 million to a donor advised fund at Fidelity Investments Charitable Gift Fund to proceed with a suit for damages they claimed resulted when, contrary to its representations, Fidelity dumped the gift stock immediately upon receipt and depressed the value of the gift for charitable donation deduction purposes. The Court has rejected a motion to dismiss the case, holding that the plaintiffs have standing to sue and have adequately alleged causes of action.
Tax Court refuses to reconsider easement case
The Tax Court has refused to reconsider a case in which it denied a charitable contribution deduction for a developer who granted a conservation easement on 125 acres next to a proposed residential development. The Court had said that no deduction was available when the donor expected to obtain a benefit in the enhancement of the value of adjacent property. (See Nonprofit Issues®, Vol. XXVIII, No. 2)
Donor Advised Funds grow in “all key metrics”
Donor advised funds grew significantly in 2017 in number of funds, total assets, contributions received, and grants made, according to the 12th annual Donor Advised Fund Report issued recently by the National Philanthropic Trust. For the eighth consecutive year there was growth “in all key metrics,” the report said, making donor advised funds “the fastest-growing vehicle in philanthropy.”