Charitable Hospitals Behaving Badly

Patient Debt

Over the summer of 2019, there were important showdowns around the United States against certain charitable healthcare systems acting in decidedly uncharitable (and unlawful) ways. The hospital behemoths with overflowing coffers relentlessly hounded patients for every last nickel and dime. The victims included those least able to afford it; people earning just at or above the minimum wage – some of them the hospitals’ own employees!

By summer’s end, the avaricious health providers were “humbled” by enough public exposure and pressure to reverse course. The changes so far have led to significant relief to some beleaguered victims, but more needs to be done. 

And – of course – it should not have happened at all. 

   Hospitals’ Tax Exemption Deal 

The majority of the hospitals in the United States are nonprofit, nongovernmental institutions. They receive valuable federal, state, and local income tax exemptions along with other substantial tax breaks. That’s a bargain they make in exchange for an obligation “to provide community benefits, including charity care to low-income patients.”  

The Affordable Care Act of 2010 (ACA), designed to result in fewer uninsured and underinsured Americans needing financial assistance from hospitals, added new duties.  Nonprofit hospitals must have “financial assistance programs” although “the federal rules don’t say how much help, and they don’t say how poor you have to be to qualify or if you have to be insured or uninsured.” The ACA also “prohibits hospitals from taking ‘extraordinary collection actions.’” 

There were three major story arcs appearing beginning in May and June 2019 that highlight egregious flouting of the tax-exemption bargain as well as violations of the letter and spirit of the ACA. They exposed seedy practices of prestigious Johns Hopkins Medical Center (Baltimore), Methodist Le Bonheur Hospital (Memphis) and the University of Virginia Health System (Charlottesville). Included in these unconscionable policies were the continual piling on of penalties, interest, and attorneys’ fees to the original debt amounts followed by garnishment of wages, liens on property, and endless filing of enforcement actions.

According to research published recently in the Journal of the American Medical Association (about a study of Virginia nonprofit healthcare institutions), nonprofit hospitals are more likely than their for-profit counterparts to sue patients for payment.  And particularly disturbing are the results showing that these health providers are “suing to grab 0.1 percent of their total revenue.” Rolling in revenue, they still pursue payment of debts in all amounts, including some so small it makes little difference to the bottom line of the institution but traps debtors for a lifetime. 

   Hospitals’ Horror Stories 

Of the three stories, the most deeply reported is about Memphis’s Methodist Le Bonheur Hospital. There’s an important angle, too, in the identity of the crack reporting team that uncovered this sordid tale.  ProPublica, Inc. is a “nonprofit newsroom that investigates abuses of power. MLK50, a member of the ProPublica Local Reporting Network, did the heavy lifting on this remarkable series. Ironically, it is a nonprofit investigative group that protects the charitable beneficiaries that the nonprofit hospital here wrongfully exploits. 

The storyline from the ProPublica network begins on June 27, 2019. The opening article’s title is brutal but fair: The Nonprofit Hospital That Makes Millions, Owns a Collection Agency and Relentlessly Sues the Poor. It includes background information about the institution and the community it serves. A six-facility healthcare group (with an additional 150 outpatient centers, clinics and physician practices), Methodist Le Bonheur has an annual revenue of $2.1 billion and is the second-largest private employer in Shelby County, Tennessee. It boasts a commitment to a “culture of compassion.” But there are hard facts and figures confirming the intensity of the effort to collect every last penny owed. There are also absorbing case studies of some of the victimized patients. 

That same day, a follow-up article continues the tale: This Memphis Hospital System Flouts IRS Rules by Not Publicly Posting Financial Assistance Policies (June 27, 2019) “Nonprofit hospitals must post financial assistance policies for the public to see, including in emergency rooms. But Methodist Le Bonheur Healthcare’s five Shelby County emergency rooms had no signs or displays when a reporter checked.” 

And there’s a bigger problem: According to a review by MLK50/ProPublica of policies at Tennessee nonprofit hospitals, this one is “among the least generous in the state.” Although “… dozens of hospitals offer free or highly discounted care that helps shield low- and middle-income patients, regardless of insurance status, from crushing debt, Methodist does not.” Although a spokesperson explained that “it will work with … patients seeking assistance,” the evidence appears not to support that assertion.

   Aggressive Debt Collection 

Methodist Le Bonheur Hospital’s “handling of poor patients begins with a financial assistance policy that, unlike many of its peers around the country, all but ignores patients with any form of health insurance, no matter their out-of-pocket costs.” 

What follows, though, compounds the problem.  If Methodist Le Bonheur’s patients can’t pay their bills, they “face what experts say is rare: A licensed collection agency owned by the hospital.” Lawsuits follow. Finally, after the hospital wins a judgment, it repeatedly tries to garnish patients’ wages, which it does in a far higher share of cases than other nonprofit hospitals in Memphis.

“We found that Methodist Le Bonheur Healthcare filed more lawsuits and won more wage garnishment orders than any other hospital system in Shelby County” is what reported MLK50/ProPublica reported in How We Tallied Medical Debt Lawsuits and Wage Garnishments in Memphis (June 27, 2019). 

The next day’s installment adds more detail: Low-Wage Workers Are Being Sued for Unpaid Medical Bills by a Nonprofit Christian Hospital That Employs Them (June 28, 2019). The subheading adds a further troubling twist: “Methodist Methodist Le Bonheur Healthcare has sued many of its own employees over unpaid medical bills and garnishes their wages; its health care plan prevents them from going to competitors with better financial assistance.”

   Hospitals’ Practices Generally

The ProPublica series points out that this health provider’s policies and practices of aggressive collection efforts are neither mandatory nor universal. “Several nonprofit hospitals don’t sue patients at all, such as Bon Secours Hospitals in Virginia, which stopped pursuing debt suits in 2007, and the University of Pittsburgh Medical Center, which includes more than 20 facilities.” And the policy of the seven-hospital Methodist Health System in Texas is also different, according to a spokesperson: “We are a faith-based institution and we don’t believe taking extraordinary measures to seek bill payments is consistent with our mission and values.” It never “impose extraordinary collection actions such as wage garnishments, liens on homes, or credit bureau notification.” 

Turning to the legal system to settle debts is a choice, not a mandate, said Jenifer Bosco, staff attorney at the National Consumer Law Center, a nonprofit focusing on legal services for low-income and other disadvantaged people. “A lot of medical debts are just handled through the collections process,” she said. “Certainly some end up in court, but it seems like this hospital is especially aggressive” – especially in a city where nearly 1 in 4 residents live below the poverty line.

According to Senator Chuck Grassley (R-NE), aggressive debt collection practices are “contrary to the philosophy behind tax exemption.” Hospitals doing this “seem to forget that tax exemption is a privilege, not a right. In addition to withholding financial assistance to low-income patients, they give top executives generous salaries on par with their for-profit counterparts.”

   The Tide Turns

In the hours and days following publication of these damning articles, “Methodist declined repeated requests to interview its top executives.” But soon the crack investigative team reported progress. The titles of articles published in July 2019 preview the rapid, significant developments:

“The hospital system just announced major policy changes in response” to the MLK50 investigation. 

In Hospital Humbled by ProPublica Will Raise Wages and Stop Suing Employees (August 1, 2019), The Nonprofit Quarterly’s Ruth McCambridge wonders if the “hospital” is “yet humble enough.” As of mid-summer, there were still unanswered questions including whether Methodist Le Bonheur will end entirely the practice of suing patients or whether it will refile the 100-plus lawsuits it dismissed in July. 

   Conclusion 

In Thousands of Poor Patients Face Lawsuits From Nonprofit Hospitals That Trap Them in Debt (September 13, 2019), the MLK50 team explains that “across the country, low-income patients are overcoming stigmas surrounding poverty to speak out about nonprofit hospitals that sue them.”

They issue a public call-to-action for more information, including first-hand accounts of people who have been named by nonprofit hospitals as defendants in collection actions.  “Federal officials are noticing. Help us keep the pressure on.”

CA Hospitals Want OK to Provide Less Charitable Care

Nonprofit hospitals are a large and influential part of the charitable sector as well as the overall U.S. economy.  Despite efforts, over many decades, by for-profit healthcare chains to corner the market share, nonprofit institutions still predominate.

A debate has raged for years about the purpose and effect of the 501(c)(3) tax-exempt status for the nonprofit hospitals and their communities. Their operations are often “indistinguishable” from for-profit hospitals; some, in fact, “provide less charity care than their for-profit counterparts.”  

Back in December 2013, the late Rick Cohen wrote in a Nonprofit Quarterly article about  a question being asked by a groundswell of observers”: namely, “exactly what makes a nonprofit hospital a nonprofit.” At that time, he cited the recent criticisms of noted Boston University law professor Ray Madoff who had voiced the opinion that if nonprofit health-care institutions don’t provide charity care, they should not have tax exemptions at all. She continues to hold and express that point of view to the present time. Put another way, the issue was, and remains, “how charitable nonprofit hospitals actually are.”

In December 2017, there was another call for nonprofit hospitals to take on more charity care in order to keep their tax exemptions. The latest discussion has been prompted by a number of developments at the federal level as well as in various states around the nation. In a 2017 ruling, the IRS revoked the tax-exempt status of a hospital for failing to comply with ACA-related “community needs assessments” duties.  The agency is reportedly pursuing other hospitals for similar reasons. At the state level, communities and local governments have taken bold steps, including filing court challenges, to curb or eliminate property tax exemptions for hospitals not providing enough charity care. We reported on a number of those developments, especially in New Jersey.

In an opinion article in Stat, an online healthcare-related publication, a Duke University cardiologist “suggests that if nonprofit hospitals knew what was good for them, they would begin to live up to the spirit of their tax-exempt status far more substantively and assertively.   

  Federal Requirements for Nonprofit Hospitals

In the journal Health Affairs, there is a comprehensive explanation of the federal charity care rules historically and under the ACA. It appears in an early 2016 article titled Nonprofit Hospitals’ Community Benefits Requirements. Of course, some of the information there must be considered in light of the current uncertainty about the application and future of the Affordable Care Act.

Bearing that in mind, the concept of “community benefit” earlier found in federal law is not as helpful as it might be. Its goal is to push nonprofit hospitals in the right direction, but there are two key challenges.  First, the 2008 IRS community benefit requirement, as expressed in that year’s comprehensive revision of Form 990 (including the new Schedule H) is “vague”:

The purpose of Schedule H was to increase accountability and transparency, but it can sometimes muddy the waters. The categories of community benefit activities are numerous and include the net, unreimbursed costs of charity care; participation in means-tested government programs like Medicaid; health professions education, health services research; subsidized health services; community health improvement activities…the list seems to go on.

Second, the hospital lobby (including the California Hospital Association) opposes rules requiring hospitals to establish their community benefit, asserting that it would “hamper the ability of hospitals to respond to specific needs in the communities they serve.”

   California Hospitals Try Different Tactic

Under federal law, nonprofit hospitals are generally required to provide some amount of free or discounted care in exchange for the benefits of the tax exemption. Since there is no particular amount specified, “…. there is a lot of room to self-determine how much a hospital is giving back to its community.”

For California hospitals, though, there is an additional law that is available and is now being invoked by some institutions in the Golden State. That law allows California’s attorney general to determine specific requirements for charity care when a nonprofit hospital changes ownership.

Three hospitals in Southern California have petitioned Attorney General Javier Becerra to slash their charity requirements in half. A fourth institution has sought an almost 80% reduction. (One of the four had recently converted to for-profit status, but is required, under terms of the conversion approval, to continue to provide charity care for another six years.)  The hospitals cite figures they assert show they already give considerably more in the way of charitable work than the benefit they receive from their tax exemptions. Advocates for greater community care disagree.

  Conclusion

The same requests were submitted to Becerra’s predecessor, Kamala Harris –  now a U.S. senator; she had declined to approve them. There is a limited time – just 90 days – to respond to the current petition.

[Update 5/10/18: In mid-April, Attorney General Becerra denied the hospitals’ requests, and ordered them to fulfill their obligations.]

What Does “Lessening the Burdens of Government” Mean?

The year 2018 is shaping up to likely include dramatic cuts in government funding for social services. In order to lessen the impact on tens of millions of Americans, there will need to be a response by donors and the philanthropic community in the form of new organizations – or expansion of existing ones – to focus on the “exempt” purpose of “lessening the burdens of government.” 
The pivotal federal tax-exemption statute, section 501(c)(3) of the Internal Revenue, does not explicitly include this phrase. So what is it? Where does it come from?

 Exempt Purposes

Section 501(c)(3) is just one paragraph: The 132-word definition of which groups are eligible for the most coveted tax exemption classification that is a prerequisite for grants and charitable donations.  
It includes a series of hurdles, the first of which is the “purposes” test: 

Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals, …. (bolding added)

 
An organization seeking 501(c)(3) status must be both “organized” and  “operated” for one or more approved – that is, “exempt” – purposes. The remainder of the 132-word paragraph includes certain disqualifiers, but they only come into play if the nonprofit applicant can successfully jump through the threshold – “qualifying purposes” – hoop. 

    Purposes Test

At first blush, these approved “purposes” categories may seem fairly clear and unambiguous, but they are not. 
A good example is the “educational” classification: It refers to nonprofit schools and colleges, of course, but also includes many organizations formed to teach the general public about particular topics – some of which are highly controversial or presented from only one side of an issue.  There’s a bit of wiggle room in the term “educational” itself, and there is some limited guidance in various Treasury Regulations and in IRS Revenue Rulings.  From time to time, though, the matter of qualification under section 501(c)(3) proceeds to a formal administrative dispute with the IRS’s Exempt Organizations Division or, if unresolved at this administrative level, moves on to full-blown litigation in the courts. Depending on the particular facts and circumstances of each case, either the organization or the government may prevail in the end.
Another example of a highly nuanced classification is the term “charitable.” It’s often viewed as a “catch-all” phrase.  It doesn’t – and shouldn’t – though, catch anything and everything that can’t comfortably be squeezed into one of the other listed “purposes” or that has been viewed – historically – as a charity function or something that the government might do if enough tax revenues are available. 
Nevertheless, it can legitimately have a broad reach. The Treasury Regulations are helpful here – particularly because they specifically include the phrase “lessening the burdens of government.” 

Charitable defined. The term charitable is used in section 501(c)(3) in its generally accepted legal sense and is, therefore, not to be construed as limited by the separate enumeration in section 501(c)(3) of other tax-exempt purposes which may fall within the broad outlines of charity as developed by judicial decisions. Such term includes: Relief of the poor and distressed or of the underprivileged; advancement of religion; advancement of education or science; erection or maintenance of public buildings, monuments, or works; lessening of the burdens of Government; and promotion of social welfare by organizations designed to accomplish any of the above purposes, or (i) to lessen neighborhood tensions; (ii) to eliminate prejudice and discrimination; (iii) to defend human and civil rights secured by law; or (iv) to combat community deterioration and juvenile delinquency…. (bolding added) (Treas. Reg. 1.501(c)(3)-1(d)(2))

Charitable Purposes

When does a nonprofit organization qualify under section 501(c)(3) because it is “lessening the burdens of government”? 
The IRS website includes a useful analysis. An applicant has the burden of proof to show (1) that is it “conducting activities that a governmental unit considers to be its burden,” and (2) whether these activities “actually lessen the governmental burden.”

Based on all the facts and circumstances, an organization must demonstrate that a governmental unit considers the organization to be acting on the government’s behalf. Acting on the government’s behalf’ means the activities of the organization free up governmental assets (such as human, material or fiscal) that would otherwise have to be devoted to that activity if carried out by the governmental unit itself.

 
In Revenue Ruling 85-1, though, the IRS made clear that “lessening the burdens of government occurs only if the governmental unit formally recognizes the activities of the organization to be its burden.” This formal recognition may be objectively manifested by the “interrelationship” between the nonprofit group and the governmental unit. In the case described in this revenue ruling, the group’s activities “were an integral part of a larger governmental program and the organization funded governmental expenses.”
A government’s expressing approval of an organization’s activities doesn’t necessarily, by itself, establish the necessary facts. 
In Columbia Park & Recreation Assn. v. Comm., 88 T.C. 1 (1987), aff’d. without published opinion, 838 F. 2d 465 (4th Cir. 1988), the United States Tax Court ruled that “the mere assertion that, in petitioner’s absence, government would have had to assume the activities in question did not mean the activities were, in fact, the burdens of government.”
Similarly, in Public Industries, Inc. v. Comm., T.C. Memo 1991-3, the Tax Court concluded that neither the federal government nor the government of the state of that organization’s incorporation viewed its activity – purchasing prison-made goods for sale to the private sector as a “proper governmental function.”
However, in Indiana Crop Improvement Association, Inc. v. Comm, 76 T.C. 394 (1981), acq., 1981-2 C.B. 1, the applicant-organization won the case. The Tax Court ruled that a group whose primary activity was the certification of crop seed under applicable federal and state laws, and which was specifically delegated this function under state law, qualified for section 501(c)(3) tax exemption. 
Of course, even if an applicant meets the “lessening the burdens of government test,” it cannot be disqualified under the additional tests of section 501(c)(3) – including that it does not primarily serve private interests. See, for instance, Quality Auditing Company, Inc. v Comm., 114 T.C. 498 (2000).

  Conclusion

The “lessening the burdens of government” rationale for 501(c)(3) qualification may be a valuable aid in moving forward in the current political climate of extreme fiscal restraint. The Treasury Department, though, may have to reformulate and broaden the scope and availability of this “exempt” purpose if this Congress and this Administration want private donors and foundation grants to pick up the slack and protect needy beneficiaries of social services.

CA Nonprofits Get Extra Time to File Information Returns

Directors and officers of tax-exempt organizations around the nation generally breathe a sigh of relief when the coveted determination letter from the IRS granting the exemption is received.
But that’s just the start of the paperwork and record-keeping required by the federal government as well as state and local authorities. Failure to follow these filing requirements and deadlines can result in penalties and – sometimes – even harsher consequences.  For instance, failure to file Form 990 information returns for 3 years can result in automatic revocation of the federal tax exemption. Similarly, failure to file the required registration with the California Attorney General for a single year will result in the nonprofit’s tax-exempt status being suspended, and a 3-year failure will  result in automatic revocation of status.

  Automatic Extension for CA Information Returns

The California Franchise Tax Board recently sent out FTB Notice 2016-04 (11/4/16) with guidance on automatic extensions of time for various corporate entities in this state to file tax returns.
Included in this notice were instructions for California organizations exempt from tax under California Revenue & Taxation Code section regarding Form 199, Exempt Organization Annual Information Return and Form 109, Exempt Organization Business Income Tax Return.      

Form 199: Most California charities that exceed a certain gross receipts threshold are required to file an annual Form 199 (or an alternate version for smaller groups – the 199N). Certain categories of organization – including private foundations and nonexempt charitable trusts – must file regardless of gross receipts. Other categories are exempt from the filing requirement; these include churches and religious order, for instance.

Form 109: Under California Revenue & Taxation Code section 23771, most exempt organizations that have income in excess of $1,000 from a trade or business unrelated to the exempt purposes – even if the profits are used for exempt purposes – must file an annual Form 109. There are some exceptions to this filing requirement.

   Filing Deadlines and Extensions

Ordinarily, these two returns are due on the 15th day of the 5th month after the end of the close of the organization’s fiscal year. For example, a calendar year exempt organization, the two forms are due on May 15th.
For years beginning January 1, 2016, there is a substantial extension of time available in certain cases.

Good Standing Automatic Extension: For taxable years beginning on or after January 1, 2016, if Form 199 (or 109) cannot be filed by the 15th day of the fifth month, the organization has an additional six months to file without filing a written request for extension.  This automatic extension is extended to organizations that are in good standing with the Franchise Tax Board on the original due date.  The granting of the extension is also conditioned on the filing of a return within the automatic extension period.  The extended due date will be the 15th day of the 11th month after the close of the tax year.  For example, a calendar year exempt organization, the extended due date would be November 15th.

No Automatic Extension if Not in Good Standing:  If an organization is not in good standing with the FTB, neither the 199 return nor the 109 return will be given an extension of time to file.  With respect to Form 109 to avoid late payment penalties, the organization must pay 100% of the tax liability by the original due date of the return.    

   Conclusion

The above discussion is limited to the Form 199 and 109 returns filed by exempt organizations.  Please also note that this information is for taxable years beginning on or after January 1, 2016 and not for earlier tax years. 

Charitable Gifts in Perpetuity: Not a Great Idea

Two news stories from 2015 highlight the problem of the “dead hand” reaching out from eternal slumber, squeezing the life out of needed flexibility for a charitable institution established long ago by a bequest.
“The Law” disfavors anything in perpetuity; hence, the dreaded Rule Against Perpetuities that is the bane of the existence of every first-year law student:

The common rule against perpetuities forbids some future interests (traditionally contingent remainders and executory interests) that may not vest within the time permitted; the rule “limits the ability of a decedent to exercise dead hand control over property, which the state wishes to be alienable. In essence, the rule prevents a person from putting qualifications and criteria in his/her will that will continue to control or affect the distribution of assets long after he or she has died, a concept often referred to as control by the “dead hand” or “mortmain“.

Now – technically – the Rule Against Perpetuities applies only in cases of said contingent remainders and executory interests, and doesn’t prohibit a generous soul from establishing a charitable testamentary trust with all sorts of qualifications and conditions. But the general idea holds: Perpetuity is a very, very long time indeed.
It’s usually not a great idea to include lots of restrictions that could get in the way of progress one hundred years later, even to the point of leaving the charitable institution with no choice but to shut its doors.

Charitable Trust No. 1: Sweet Briar College

Last  year, we discussed the case of Virginia’s Sweet Briar College – a small, women-only, liberal-arts college in the beautiful foothills of the Blue Ridge Mountains.
Over 100 years ago, its founder created a testamentary trust to establish the college on the grounds of her family’s (former) plantation as a memorial for her deceased daughter. At that time, promoting women’s higher education was a progressive concept, and establishing a single-gender college was a logical decision. Not only was the land tied up by this bequest, but there were restrictions on use of the endowment as well.
In March 2015, the board of directors was summoned to a special meeting, at which the interim president announced that he and the executive committee had determined that the school was facing “insurmountable financial difficulties” and would need to close at the end of the semester.
A firestorm of opposition erupted, and within a few months, the leadership had been ousted and a committed group of supporters had rallied enough support and financial resources to keep the college open for the 2015-2016 academic year.
But it was a mess. The local county attorney intervened in order to protect the charitable trust and assets; she argued that the proposed closing of the college would violate the terms of the will. The matter went up to the Virginia Supreme Court on an expedited basis before a mediated settlement had saved the institution.  
In addition to the issues raised by the county attorney, another matter was whether the terms of the endowment could be altered to free up needed cash. The settlement made that point moot.
Another issue that did not arise, but was at least discussed, was the possibility of attracting more students by making the college co-ed. Of course, the terms of the founder’s trust specified that it would be a women-only educational institution. It’s unclear whether a court would have ordered that testamentary condition to be ignored. (The matter has come up, in cases of other financially struggling, women-only institutions; having to go to court to seek a judicial order revising a testamentary trust is no easy – or sure – road.)

Charitable Trust 2: Paul Smith’s College

Another higher education case was decided by the terms of a testamentary trust created long ago. It, too, involved a struggling institution – this time in rural, northern New York State.
Paul Smith’s College is “the only four-year college in the six-million-acre Adirondack Park.” Its “students are mostly from rural communities, and nearly all receive financial aid.” It is “known for its hospitality and forestry programs.”
As a rural school without wealthy alumni, it was encountering tough financial woes that were serious enough to possibly force the college’s closure.
In the past, Paul Smith’s College had benefited from the generosity of Sanford I. Weill, billionaire financier, and his wife, Nancy. “The Weills own a home near the college, and Mrs. Weill has said she was impressed by Paul Smith’s.”  
“Mrs. Weill has been actively involved with the college’s development for more than two decades and served on the board of trustees.” The couple had donated many millions of dollars themselves, and garnered donations from others. The campus library and student center are named in her honor.
But, in 2015, when the school was in more serious financial straits, the Weills offered a $20-million gift, but it was “on the condition that Paul Smith’s College change its name to Joan Weill-Paul Smith’s College.”  
But there was a hitch – in addition to the fact that the Paul Smith students, staff, and alumni were not crazy about the cumbersome proposed name.
Paul Smith’s College had been created by testamentary trust and a condition of that bequest is that the college be named after Paul Smith “in perpetuity.” Of course, because of this restriction, it would take a court order to proceed.
The court was not impressed, and denied permission to break the iron-clad condition of the charitable trust.  
Previously, in “Naming Rights: It’s a Philanthropic Jungle Out There,” we had discussed the complexities of so-called “renaming gifts.”  But when the name is tied up in knots in a charitable trust, the complications multiply – and may be insurmountable.

Conclusion

At the time that a charitable trust is created or, indeed, when any sizeable donation is made, the restrictions on the use of the funds may seem prudent and logical. But times change, and needs change, and flexibility should be an important consideration. Anything “in perpetuity” is probably not a great idea.