The Community News Service is a program in which University of Vermont students work with professional editors to provide content for local news outlets at no cost.
If you’ve ever donated to charity, you may have wondered where your money goes. A bill tabled for the next legislative session aims to build trust between you and the group you give to.
H.583, or the Donor Intent Protection Act, seeks to ensure better legal protections for people privately donating to charities in order to handle situations where an institution used a donation outside of its intended purpose.
The bill would require charities to abide by the requirements a donor spells out in their endowment. If the charity didn’t use the money the way they agreed on, then the donor could file a lawsuit within six years.
In the event that a donor wins, the bill makes it clear they wouldn’t get any money — a judge would simply order “any remedy” deemed in line with the agreement between the donor and charity.
There have been many instances where donors’ wishes are deliberately disregarded and violated, Joanne Florino, the Adam Meyerson distinguished fellow at the Philanthropy Roundtable, a national nonprofit, said in a House judiciary committee meeting May 8.
Florino referenced a 2010 case in which a donor gave $300,000 to St. John’s University in Minnesota with the understanding that it would fund a summer fellowship for students. After the summer ended, the donor was shocked to see that the research project was never completed and the university did not use his endowment funds as he intended, Florino said. The donor had no legal remedy, Florino said.
Florino said stories like that are an increasing issue as private donations rise. She said private contributions have totaled nearly $500 billion a year since 2021.
The bill was introduced in the House back in January, but lawmakers in the judiciary committee didn’t hear testimony until only a couple days left in the legislative session. The bill did not pass this year, but legislators were prepping it to be a priority next year, said Megan Schmidt, the senior director of government affairs at Philanthropy Roundtable.
Similar laws exist in Iowa, Kansas, Kentucky and Georgia — the latter two of which were signed into law this year — and Vermont lawmakers behind the bill are hoping it will be one of the next to pass.
Private philanthropy reflects the diverse, individual interests of American citizens, Florino said, and what sustains that legacy is a basis of trust between donors and the recipients of their donations. With protections like those in the bill, supporters hope it will encourage citizens to keep donating.