New York § 555 - 555Release or modification of restrictions on management, investment, or purpose

§ 555. 555Release or modification of restrictions on management, investment, or purpose

§ 555. Release or modification of restrictions on management, investment, or purpose. (a) If the donor consents in a record, an institution may release or modify, in whole or in part, a restriction contained in a gift instrument on the management, investment, or purpose of an institutional fund. A release or modification may not allow a fund to be used for a purpose other than a charitable purpose of the institution. (b) A court, upon application of an institution, may modify a restriction contained in a gift instrument regarding the management or investment of an institutional fund if the restriction has become impracticable or wasteful, if it impairs the management or investment of the fund, or if, because of circumstances not anticipated by the donor, a modification of a restriction will further the purposes of the fund. The institution shall notify the donor, if available, and the attorney general of the application, and the attorney general and such donor must be given an opportunity to be heard. To the extent practicable, any modification must be made in accordance with the donor's probable intention. (c) If a particular purpose or a restriction contained in a gift instrument on the use of an institutional fund becomes unlawful, impracticable, impossible to achieve, or wasteful, the court, upon application of an institution, may modify the purpose of the fund or the restriction on the use of the fund in a manner consistent with the purposes expressed in the gift instrument. The institution shall notify the donor, if available, and the attorney general of the application, and the attorney general and such donor must be given an opportunity to be heard. (d)(1) If an institution determines that a restriction contained in a gift instrument on the management, investment, or purpose of an institutional fund is unlawful, impracticable, impossible to achieve, or wasteful, the institution, ninety days after notification to the attorney general, may release or modify the restriction, in whole or part, if: (A) the institutional fund subject to the restriction has a total value of less than one hundred thousand dollars; (B) more than twenty years have elapsed since the fund was established; and (C) the institution uses the property in a manner consistent with the purposes expressed in the gift instrument. (2) Notice to the attorney general shall contain: (A) an explanation of (i) the institution's determination that the restriction meets the requirements set forth in subparagraph one of this paragraph and (ii) the proposed release or modification; (B) a copy of a record of the institution approving the release or modification; and (C) a statement of the proposed use of the institutional fund after such release or modification. (3) If the attorney general does not notify the institution within ninety days, the institution may proceed with the release or modification. (4) Notice shall also be given to the donor, as defined in paragraph (a-1) of section 551 (Definitions), if available, provided, however, that such notice shall not be required for funds described in clause (B) of subparagraph two of paragraph (e) of section 553 (Appropriation for expenditure or accumulation of endowment fund; rules of construction). (e) For purposes of this section, an institution may apply to the following courts to release or modify a restriction contained in a gift instrument: (1) to the supreme court of the judicial district wherein the institution has its office or principal place of carrying out the purposes for which it was formed; or (2) where the applicable gift instrument is a will, to the surrogate's court in which such will is probated. (f) This chapter shall not limit the application of the doctrines of cy pres and deviation.