N.Y. Not-for-Profit Corporation Law § 555: Release or modification of restrictions on management, investment, or purpose

§ 555. Release or modification of restrictions on management,

investment, or purpose.

(a) If the donor consents in a record, an institution may release or

modify, in whole or in part, a restriction contained in a gift

instrument on the management, investment, or purpose of an institutional

fund. A release or modification may not allow a fund to be used for a

purpose other than a charitable purpose of the institution.

(b) A court, upon application of an institution, may modify a

restriction contained in a gift instrument regarding the management or

investment of an institutional fund if the restriction has become

impracticable or wasteful, if it impairs the management or investment of

the fund, or if, because of circumstances not anticipated by the donor,

a modification of a restriction will further the purposes of the fund.

The institution shall notify the donor, if available, and the attorney

general of the application, and the attorney general and such donor must

be given an opportunity to be heard. To the extent practicable, any

modification must be made in accordance with the donor's probable

intention.

(c) If a particular purpose or a restriction contained in a gift

instrument on the use of an institutional fund becomes unlawful,

impracticable, impossible to achieve, or wasteful, the court, upon

application of an institution, may modify the purpose of the fund or the

restriction on the use of the fund in a manner consistent with the

purposes expressed in the gift instrument. The institution shall notify

the donor, if available, and the attorney general of the application,

and the attorney general and such donor must be given an opportunity to

be heard.

(d)(1) If an institution determines that a restriction contained in a

gift instrument on the management, investment, or purpose of an

institutional fund is unlawful, impracticable, impossible to achieve, or

wasteful, the institution, ninety days after notification to the

attorney general, may release or modify the restriction, in whole or

part, if:

(A) the institutional fund subject to the restriction has a total

value of less than one hundred thousand dollars;

(B) more than twenty years have elapsed since the fund was

established; and

(C) the institution uses the property in a manner consistent with the

purposes expressed in the gift instrument.

(2) Notice to the attorney general shall contain: (A) an explanation

of (i) the institution's determination that the restriction meets the

requirements set forth in subparagraph one of this paragraph and (ii)

the proposed release or modification; (B) a copy of a record of the

institution approving the release or modification; and (C) a statement

of the proposed use of the institutional fund after such release or

modification.

(3) If the attorney general does not notify the institution within

ninety days, the institution may proceed with the release or

modification.

(4) Notice shall also be given to the donor, as defined in paragraph

(a-1) of section 551 (Definitions), if available, provided, however,

that such notice shall not be required for funds described in clause (B)

of subparagraph two of paragraph (e) of section 553 (Appropriation for

expenditure or accumulation of endowment fund; rules of construction).

(e) For purposes of this section, an institution may apply to the

following courts to release or modify a restriction contained in a gift

instrument:

(1) to the supreme court of the judicial district wherein the

institution has its office or principal place of carrying out the

purposes for which it was formed; or

(2) where the applicable gift instrument is a will, to the surrogate's

court in which such will is probated.

(f) This chapter shall not limit the application of the doctrines of

cy pres and deviation.