SOURCE: Van Osdol & Magruder

Van Osdol & Magruder

June 03, 2013 18:57 ET

The Biggest Little Law Firm in Kansas City, Van Osdol & Magruder, Reviews Donor Restricted Gifts

KANSAS CITY, MO--(Marketwired - Jun 3, 2013) - Van Osdol & Magruder, The Biggest Little Law Firm in Kansas City, recently reviewed several popular news stories where donor-restricted gifts became legally problematic for charities. Over the past few years, there has been a surge in cases where the donor (or his or her heirs) is suing to get back a contribution, claiming restricted funds were not used as promised.

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According to Elizabeth Patterson, attorney at Van Osdol & Magruder, generally, gifts are unrestricted and the charity can use them for its purposes as it sees fit. However, when the gift comes with restrictions or conditions, the nonprofit recipient generally has to adhere to those restrictions. "We have had success removing such restrictions with the donor's consent or by obtaining a court decree, applying what is known as cy prés when compliance with those restrictions become sufficiently problematic, but sometimes, neither remedy is obtainable. For now, nonprofits in Missouri are less susceptible to such donor lawsuits. Under Missouri and Kansas law (with certain exceptions), only the State's Attorney General has standing to enforce such restrictions," said Patterson.

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Patterson added that a charity may be able to avoid these issues by reviewing the following: "First, it should have a gift acceptance policy that requires review of any proposed gift conditions before the gift is accepted. Second, put it in writing. Written gift agreements can protect nonprofits from 'he said -- she said' arguments. Lastly, the written gift agreement should specifically state any restrictions. If possible, the agreement should provide flexibility to deal with changes in these circumstances," said Patterson.

Van Osdol & Magruder, P.C. is located in Downtown Kansas City, Mo. Trademarked as The Biggest Little Law Firm® in Kansas City, the firm focuses on maximizing value for its clients while remaining mindful of legal expenses (www.vomer.com).

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