One component that seems to be common in such cases is a breakdown in expectations and understanding between the donor, her family and the governing board of the recipient body. One way to avoid a communication breakdown is for a donor to begin a relationship with and oversee the activities of the charity or foundation during her lifetime. This could mean establishing the parameters of her restricted fund or gift during her lifetime, effectively requiring the charity and donor to work together to effect her charitable goals. In this manner, a pattern of activity will be established that could guide the charity's stewardship of the contributed assets following the donor's death and prevent any future misunderstanding of her charitable objectives. Moreover, the collaborative charitable activities of the charity and donor could serve as powerful evidence of the donor's intentions should controversy arise following her death.

Use Of Charitable Trusts

Even though the Pennsylvania court's decision in the Barnes case suggests otherwise, generally a charitable trust is a more effective vehicle than a nonprofit corporation for locking in a donor's charitable intentions. By its nature, a nonprofit corporation is inherently flexible. Articles of incorporation, bylaws and mission statements are all subject to change, which gives the corporate form its main advantage. While it is possible to create corporate governance documents that are difficult to amend (for example, those requiring a supermajority or even a unanimous vote), you cannot block amendments completely.

By contrast, a charitable trust instrument could include a mission statement, distribution requirements and a governance structure that cannot be amended without a court order. Even though a court can always change the purposes or administrative provisions of a charitable trust, this is a cumbersome and uncertain process. Moreover, the circumstances in which a court will change the express purposes of a charitable trust are typically limited to rare situations in which the purposes are illegal or impossible to fulfill. While charitable trusts may be somewhat clumsier than nonprofit corporations for day-to-day operations, for a donor who has clear goals regarding the use of her charitable gift and who is concerned about mission drift, the charitable trust may be the preferred vehicle for her philanthropy.

Mission Statements And Clear Charitable Purposes

Obviously, a donor who is concerned about mission drift should clearly articulate the purposes of the foundation or gift in a mission statement. There is no required form or content for a statement, but the purposes must qualify as "charitable" under Section 501(c)(3) of the Internal Revenue Code. However, it is important that the donor avoid using boilerplate language that merely recites the charitable language of the section. Instead, the donor should attempt to draft specific language regarding the intended uses of her charitable gift, perhaps including examples of both permitted and prohibited uses. Similarly, a donor can articulate the grant-making activities that her foundation should support and those which should be avoided. A carefully drafted mission statement can serve as a clear direction to the donor's family, to the charities supported by the donor, to the leadership of the donor's foundation and, if necessary, to a court trying to determine the donor's charitable goals.

Perhaps most important, however, is that the donor's mission statement and charitable purposes include some element of flexibility. One possible reason that the court in the Barnes Foundation matter allowed the foundation to divert from its expressed purposes was the inflexibility of Mr. Barnes' plan, which the court eventually interpreted as a hindrance to the foundation's success. Accordingly, a donor may wish to include secondary and perhaps even tertiary charitable goals and purposes that must be followed in case the donor's primary goals become impossible, impractical or unnecessary, thus her intent will continue to govern the use of the charitable property.

Enforcement Mechanism

During a donor's lifetime, her participation in the charity or foundation's activities and her continued willingness to contribute is the most obvious and effective mechanism to enforce her charitable wishes. However, after the donor dies, her intentions will be carried out by proxies, which may include the charity or foundation and surviving family members. It is important that a donor specify the parties that should be consulted for purposes of carrying out her charitable intent and that the donor notify each party of his or her role. With a restricted gift to charity, the donor can name individuals to advise the charity regarding the use of the charitable gift and possibly grant those individuals the legal right to enforce the terms of the gift. With a private foundation, the donor can create a succession plan for the foundation's governance, and specifically name individuals whom she trusts to effect her goals.

Even with the most carefully planned enforcement mechanism, however, there is an increasing risk of mission drift over long periods of time, particularly as the individuals charged with administering the gift or foundation are less likely to have interacted with, or even known, the donor. For this reason, it may be wise for donors to consider the creation of a separate discretionary fund that future fiduciaries can use for their own charitable purposes. This creates an incentive for future fiduciaries to adhere to the donor's intent because they also will have the opportunity to support their own charitable interests.