The court in Smithers v. St. Luke's-Roosevelt Hosp. Ctr., 281 A.D.2d 127 (N.Y. App. Div. 2001) found that beneficiaries have the right to enforce the actual use of a donor's charitable contribution according to his intent, even after his death. In the case, Mr. Smithers left $10 million to St. Luke's to create an alcohol rehabilitation center. He specially selected the facility because it would afford patients outdoor recreation. After Mr. Smithers' death, the hospital decided to relocate the facility and sell the original property for profit. Mrs. Smithers, the donor's widow and administratrix of his estate, subsequently brought suit against the hospital, alleging a misappropriation of donor funds. The lower court denied her request.
Highlights of Smithers include the following:
- The appellate court observed that historically, "standing to enforce the terms of a charitable gift is limited to the Attorney General."
- In this case, however, the court stated that the facts of the case "demonstrate the need for co-existent standing for the Attorney General and the donor" because "there is no substitute for a donor, who has a special, personal interest in the enforcement of the gift restriction."
- Indeed, the "donor of a charitable gift is in a better position than the Attorney General to be vigilant and, if he or she is so inclined, to enforce his or her own intent."
- The court concluded that the "interests of the donor and the Attorney General are best served by continuing to accord standing to donors to enforce the terms of their own gifts."
- Therefore, the court stated, Mrs. Smithers had "standing to sue the Hospital for enforcement of the Gift terms."
Thus, under Smithers (which does not have precedential value in California), donors may enforce the terms of their gift years after the contribution. However, according to law professor Iris J. Goodwin , "this empowerment goes only so far, in that the donor just retain, if not a reversion, than a supervisory right with respect to the program or project funded by the gift …."
Read Goodwin's article Donor Standing to Enforce Charitable Gifts: Civil Society vs. Donor Empowerment in the Vanderbilt Law Review Vol. 58:4:1093 (2005) here.
– Taleen Alexander