CHAPTER 121
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1
CHAPTER 121
( SB 70 )
AN ACT relating to charitable donor intent protection.
Be it enacted by the General Assembly of the Commonwealth of Kentucky:
SECTION 1. A NEW SECTION OF KRS CHAPTER 273 IS CREATED TO READ AS FOLLOWS:
(1) As used in this section:
(a) "Charitable organization" means an entity organized and operated exclusively for religious,
charitable, scientific, testing for public safety, literary, educational, or other specified purposes and
that is recognized as tax exempt under Section 501(c)(3) of the Internal Revenue Code;
(b) "Donor" means an individual who has made a contribution of property or money to either an
existing endowment fund, or to establish a new endowment fund, of a charitable organization
pursuant to the terms of an endowment agreement that may include donor-imposed restrictions or
conditions governing the use of the contribution;
(c) "Donor-imposed restriction" means a provision of an endowment agreement that specifies
obligations of the charitable organization regarding the management or use of the contribution made
by the donor;
(d) "Endowment agreement" means a written agreement between a charitable organization and a donor
regarding the contribution made by the donor and accepted by the charitable organization which
may include donor-imposed restrictions or other conditions governing the use of the contribution;
(e) "Endowment fund" means an institutional fund, including any aggregate institutional fund or part
thereof, that under the terms of a gift instrument is not wholly expendable by the institution on a
current basis;
(f) "Gift instrument" means a record, including an institutional solicitation, under which property is
granted to, transferred to, or held by an institution as an institutional fund; and
(g) "Legal representative" means the administrator or executor of an individual's estate, a surviving
spouse if there is a judicial settlement of the accounts of an individual's estate, or any living, named
individual designated in an endowment agreement to act in place of a party to an endowment
agreement with respect to all matters expressed in the endowment agreement and all actions that the
agreement contemplates, including but not limited to interpreting, performing, and enforcing any
provisions of the endowment agreement and defending their validity.
(2) Except as required or authorized by federal or state law, or valid court order, a charitable organization that
accepts a contribution of property or money pursuant to an endowment agreement containing a donor-
imposed restriction shall not violate the terms of that restriction.
(3) (a) If a charitable organization violates a donor-imposed restriction, the donor or that individual's legal
representative, ninety (90) days after notification to the charitable organization, may bring a civil
action which shall be limited to appropriate declaratory and injunctive relief within four (4) years
after discovery of a breach of the endowment agreement.
(b) The civil action may be filed in the county where a charitable organization named as a party has its
principal office or principal place of carrying out its charitable purpose.
(c) The civil action seeking relief may be filed regardless of whether the agreement expressly reserves a
right to sue or enforce, and it shall not seek a judgment awarding monetary damages to the plaintiff.
(4) A charitable organization may obtain a judicial declaration of rights as to the terms of an endowment
agreement, including any donor-imposed restrictions, and the actions the agreement contemplates,
including but not limited to the interpretation, specific performance, and enforcement of the agreement and
determination of its validity by bringing a civil action under this section.
(5) If the court determines that a charitable organization violated a donor-imposed restriction, the court may
order one (1) or more remedies consistent with the charitable purposes expressed in the endowment ACTS OF THE GENERAL ASSEMBLY 2
agreement. The court shall not order the return of the contribution to the donor or the donor’s legal
representative or estate.
Signed by Governor April 9, 2024.