The case of Bellamy Trust v University of Michigan tells the story of one university professor, and how his vision about the legacy he was creating at the University of Michigan ran into the chainsaw of reality shortly after his death.
Dr. Bellamy was an expert in classical Arabic literature, and dedicated his life to these studies while teaching at UM. He left several million dollars to the University to fund a professorship to continue his work. But shortly after he died, the University appointed an expert in pre-modern Arabic studies to the position that Dr. Bellamy’s estate had funded. At least one witness said he overheard the department chair explain that the University was no longer particularly interested in the subject of classical Arabic literature, and using Dr. Bellamy’s money to pay for this professor’s salary helped with the department budget.
The case is about standing, which issue becomes complicated because, as is commonly done, although the money was paid to the University by the Trustee of Dr. Bellamy’s Trust, the terms of the gift were not set forth in his Trust but rather in a “Gift Agreement” between Dr. Bellamy and the University. The University’s position was that the Trustee of Dr. Bellamy’s Trust lacked standing to enforce the Gift Agreement, and that they only needed to satisfy Michigan Attorney General’s charitable division (which the University presumably reasonably believes was unlikely to interfere with internal decisions of a major public university, particularly where those decisions arguably save state tax dollars). This case should remind the charitably inclined that charities will promise you the moon if you’re considering making a large gift, only to look at your gift in a more practical manner once you’re gone and your funds are deposited in their accounts. Creating documents that provide standing to people with skin in the game, people who are willing to enforce the objectives that motivated the gift, needs to be a critical element to such planning.