Our museum received a large charitable bequest with no specific direction attached. How can we use it?
The museum board is split on how they'd like to see the money used. Some board members want to see the money used for wages and operational expenses, and others on the board would prefer it be used to preserve artifacts and add to the museum's collection.
Katalina
Vancouver, BC
In British Columbia, a charitable bequest that comes to a charity without any specific direction is usually treated as an unrestricted gift. In that case, the board generally has discretion to apply the funds in any way that advances the museum’s charitable purposes. This can include both “mission” spending (such as preservation, conservation, acquisitions, exhibitions, and education) as well as reasonable operating costs that are necessary to deliver the museum’s charitable work (such as wages).
The key is to confirm whether the will (or any related correspondence) includes language that characterizes the gift as a restricted or special-purpose fund. For example, the will may contain directions to hold the gift as an endowment, to use only income, or to apply it only to a particular project or type of collection.
If there are no restrictions, the board can proceed by adopting a clear resolution documenting the allocation and how it supports the museum’s mandate.
If restrictions do exist and they no longer fit current needs, there may be options that require formal approval (including, in some cases, a court application). Given the stakes, if this is a significant bequest, it is usually worthwhile to have a lawyer do a focused review of the wording in the will and outline the safest path forward before funds are committed.
Nicco Bautista
Lumina Law