Oklahoma weighs letting donors sue over broken endowment terms, which four states already allow
A bill that would let donors go to court when a charity breaks the written terms of an endowment gift passed the Oklahoma Senate in March and stalled in the House. Kansas, Georgia, Kentucky and Montana have similar laws.
Oklahoma City. Oklahoma lawmakers are again weighing whether people who give to a charity's endowment should be able to sue when the charity breaks the gift's written terms. In most states, only the attorney general can bring that case, The Chronicle of Philanthropy reported.
Senate Bill 844, the Safeguarding Endowment Gifts Act, by Sen. Christi Gillespie, a Republican, and Rep. Toni Hasenbeck, passed the Senate 32 to 12 on March 26. It was sent to the House Civil Judiciary Committee on March 31, the last action the Legislature's record shows. The Senate has since assigned an interim study, "Donor Intent Enforcement," requested by the two sponsors, to its Judiciary Committee. The study will examine "the legal and regulatory landscape of nonprofit donor intent enforcement," according to the Senate. The Chronicle reported that a Senate committee held a hearing on the measure this month; the Senate's list of studies shows no date for it.
What the bill would do
The bill covers only restricted endowment funds. A donor, the executor of a donor's estate or a person named in the gift agreement could file suit within two years of discovering a violation, after giving the charity and the attorney general 90 days' notice. The suit could not seek damages, and a court could not order the money returned to the donor; it could order remedies consistent with the gift's charitable purposes. A charity unable to meet a term would have to try to tell the donor within six months and offer a close alternative. The attorney general's power to enforce gift terms would stay as it is.
The model law comes from the Philanthropy Roundtable. A report it published, by former Wisconsin Supreme Court Justice Dan Kelly, reviewed 21 recent cases in 12 states and found courts often ruled that donors lacked standing, the Chronicle reported.
Four states already allow it
Kansas created its Donor Intent Protection Act in 2023, effective July 1 of that year. Georgia's version, Senate Bill 433, took effect July 1, 2024, for agreements made from then on; it gives donors four years and lets their children, grandchildren or great-grandchildren sue. Kentucky's Senate Bill 70, signed April 9, 2024, limits relief to declaratory and injunctive orders. Montana's Senate Bill 134, enacted in 2025, allows suits within three years and reaches back to agreements made since Jan. 1, 1975.
Greg Willems, president of the Kansas State University Foundation, said in written testimony to Kansas lawmakers in 2023 that the bill would be a significant drain on charities' focus and resources, according to the Chronicle. Roger Colinvaux, a law professor at the Catholic University of America, warned that it could discourage unrestricted gifts.
“This bill just gives the donor a voice.”
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