Some administered charitable gifts may qualify as “charitable trusts” under the Uniform Trust Code (UTC) and as “institutional funds” under the Uniform Prudent Management of Institutional Funds Act (UPMIFA). An “institutional fund” is defined in UPMIFA as a fund held by an institution exclusively for charitable purposes. This textual overlap is muddling standing jurisprudence. The UTC affords the settlor of a charitable trust standing to seek its enforcement. UPMIFA, on the other hand, has been interpreted either as depriving the donor of an institutional fund standing to seek enforcement of the gift or as deferring to equity’s general doctrinal reluctance to recognize donor standing. Assume we have a donation to a charitable corporation “in trust” for a specified charitable purpose. Which statute regulates the arrangement, the UTC or UPMIFA? Both would appear to. The donor will argue that he is afforded standing under the UTC; the donee will argue that donor standing is lacking, as per UPMIFA.
For a real-world example of the jurisprudential muddle this legislative malpractice is causing, consider Herbst v. University of Colorado Foundation, 513 P.3d 388 (Col. App. 2022), in which the donor of a gift that had been transferred “in trust” to a charitable corporation endeavored to bring an equitable action against the corporation for maladministration. Invoking UPMIFA, the court denied the plaintiff standing, although in the body of the decision the arrangement was referred to as a charitable trust, with much ink being spilt on why under Colorado common law as enhanced by equity the donor would lack standing in any case. The court apparently had not been made aware of the fact that Colorado had enacted the UTC, including its generous donor-standing provisions.
Is there a practical solution to this critical absence of coordination between the UTC and UPMIFA? It has been suggested that an effort to amend the UTC and UPMIFA so that they no longer overlap in coverage risks backfiring. “Whether this would be possible given the different and often strongly-held views regarding these issues is unclear. There also is no guarantee that states would revise their statutory laws if such amendments were made.” Nancy A. McLaughlin, Laws Governing Restrictions on Charitable Gifts: The Consequences of Codification, 70 UCLA L. Rev. Discourse 424,447 (2023).
Prof. McLaughlin also does not seem entirely convinced that fashioning an “entirely new uniform law” to address “standing to sue with regard to all charitable gifts, regardless of the organizational form of the recipient, whether the gift was conveyed in trust or nontrust form, or the label assigned to charitable gifts under state law” would be feasible considering the politics of the situation. Id. at 447. Whether feasible or not, I, for one, strongly-hold the view that inflicting on the jurisprudence a partial codification of the law of trusts the purpose of which is to remedy selected glitches in other partial codifications of the law of trusts, such as the UTC and UPMIFA, is taking statutory whack-a-mole in the trust space to a whole new level.
Moreover, even assuming each partial codification of an aspect of trust doctrine has been well coordinated with the partial codifications of other aspects of trust doctrine, enacted verbatim in all jurisdictions, and well drafted, none of which is the case, as a practical matter there are now just too darn many trust-related partial codifications out there. It is asking an awful lot of real- world trust professionals and real-world jurists to keep up with and digest all this hyper-technical, sometimes conflicting, statutory meddling with the principles-based equity jurisprudence that regulates the trust relationship, which at its core is still an invention and ward of the judiciary not the legislature. Twenty-five different uniform statutes are reproduced in the 2024-2025 Edition of Uniform Trust and Estate Statutes (Foundation Press). Many either directly bear on the law of trusts, such as the UTC, or do so tangentially, such as the Uniform Probate Code with its arcane anti-vesting traps.
As an aside, it is said that equity deems a charitable corporation to be a quasi-trust. We explain in §9.8.1 of Loring and Rounds: A Trustee’s Handbook (2025), the relevant part of which section is reproduced in the appendix below.
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