Joanna L. Grossman (SMU; Google Scholar) & Lawrence M. Friedman (Stanford), So Near and Yet So Far: Charitable Life After Death:
Margaret Young was an artist and an art lover. She died in Orlando, Florida, in 2005. She left money in trust for one daughter, Kit Knotts, for life; and she left money in another trust for a second daughter, Dee Miller, also for life. After the death of each daughter, the money left in each trust was to go to the Orlando Museum of Art (OMA). But the gift to the museum was specific; the money was to go into the museum’s “Permanent Collection Fund, and used to add to their permanent collection.”
Knotts has now died, and her trust fund is worth $1,800,000. (Miller is still alive, and the current value of her trust is comparable.) OMA will accept this gift, of course, but they would like to use it for general operating expenses rather than solely to acquire new art for the permanent collection.
Due in large part to a scandal having nothing to do with this trust, the museum is operating at a substantial deficit. The museum held an exhibition in 2022 purporting to feature paintings by Jean-Michel Basquiat. The paintings were dramatically seized off gallery walls by the FBI as part of an “art crime” investigation; an auctioneer in Los Angeles later admitted that he and a colleague had forged them. According to news reports, they finished the last fiscal year with a $1 million shortfall on a total budget of $4 million. OMA has undertaken several initiatives to generate revenue—and is still in litigation against the art forgers. But there is no question that a $1.8 million influx of cash from Margaret Young’s trust would come in very handy right now.
OMA has filed a petition in probate court in Orange County, asking the court to remove the restrictions on the money. Although the museum claims that the financial deficit is not the reason for the requested modification, the effect of the modification, if granted, would be to allow the museum to bridge the budget gap. Specifically, the museum wants permission to use the money from this trust to support the museum’s existing permanent collection rather than to add to the collection by purchasing new art. In effect, the museum would like permission to spend the money on whatever expenses it chooses, such as staff salaries.
The financial fallout from the Basquiat scandal has put extreme financial pressure on the Orlando Museum of Art—a very specific situation that likely motivated this museum’s plea to have trust restrictions removed. But these types of restrictions are often a source of tension between donors and charitable recipients. Donors typically want to exert a fair amount of control over how their money is spent, and it is often given with strings attached. Non-profit organizations, on the other hand, typically prefer to have unrestricted money that they can use in the way they feel will best serve the organization’s mission. …
At this point, it is not clear whether the Orlando Art Museum will get its way. The court will decide. On one side is the museum, on the other side is the late Margaret Young, and the wishes she expressed before she died. We know that you can’t take it with you. You also, when you die, lose some of the power to direct what should be done with your worldly goods.
