Modification of charitable trusts

Like private trusts, charitable trusts too can be modified in certain circumstances. The modification procedure is known as "cy pres", a medieval law French expression literally meaning "as near [as possible]".

In effect, a charitable trust that has become impossible or impracticable or (per the Uniform Trust Code) otherwise wasteful may continue if a court can find an alternate specific purpose for the trust derived from the general purpose behind the trust's original (and now impossible or impractical) specific purpose. Simple inefficiency or inconvenience is not enough.

Cy pres should be distinguished from administrative deviation, where the charitable trust's specific purpose can be generally achieved but where technical compliance will defeat or substantially impair the accomplishment of the trust's purpose, or otherwise will render that problematic.

The case of the Pennsylvania-based Barnes Foundation illustrates many of the challenges posed by the cy pres and deviation doctrines. At what point do the implementation of these do impermissible violence to the charitable intent of the settlor? And to what extent should that count?

Charitable trusts

Charitable trusts are trusts established for a recognized charitable or public purpose that may survive even if they are for unspecified individuals and/or operate indefinitely. In this context they are exempt from rules that would burden and limit private trusts. Despite their lack of identifiable beneficiaries, they are enforceable by a state's attorney general, who supervises them in the public interest.

A charitable trust must fall into one or more specific categories:

• advancement of religion
  
• advancement of education
  
• promotion of health
  
• relief of poverty
  
• governmental and municipal purposes
  
• other public purposes
  

These categories may themselves be problematic. Consider the following would-be charitable trusts?:

• for the Democratic Party
  
• to pay the salary of all Pitt professors of Estates & Trusts
  
• to establish communism in the United States
  
• to fund a public radio (NPR) station
  
• to promote Scientology
  
• for such persons as the Rev. Eleazer Wells should select
  
• for the support of the working classes
  
• to publish the judgments of Antonin Scalia
  
• for the upkeep of a cat
  
• for the support of veterans

Charitable trusts must be charitable on objective grounds, not just in the mind of the settlor.

Apart from being good in themselves, charitable trusts may yield certain tax advantages for settlors.