Many museums, hospitals, private schools, colleges, summer camps, and other non-profits were already facing economic challenges before the pandemic and now confront even greater financial stress. Some may not survive. When a non-profit is no longer able to carry out its charitable mission, difficult legal issues can arise with regard to the disposition of its campus, endowment, and assets gifted by benefactors for special purposes. The Director of Charitable Trusts in NH and the Attorney General’s office in MA will represent the public’s interest and court supervision of the process is likely. For most charitable assets, the goal will be to place them with a charity whose mission is closely aligned with that of the one undergoing dissolution. Commonly, the dissolving charity will have assets that were gifted subject to precise, narrow, and perhaps odd conditions in a will, trust, or deed of gift that require special consideration in finding the assets a new home. Other participants in the process may include charities competing to receive assets, benefactors or their descendants demanding the return of gifts, and alumni, patrons, or other loyal constituencies of the dissolving charity lobbying for their preferred outcomes. In my experience, these cases can present vexing, complicated issues, requiring careful attention and diplomacy.
Entitled “Many Museums Won’t Survive the Virus. How Do You Close One Down?,” this New York Times article discusses the complexity of the problems in the context of the travails of the The Charles Dickens Museum in London. Many of the issues discussed in this international context equally apply here.
(Note: Ralph Holmes is currently retired from McLane Middleton. For information on this or other probate litigation issues, please contact Alexandra Cote at alexandra.cote@mclane.com.)
