A very interesting case from BC is a must-read for any fundraiser who deals with restricted gifts. The case Boys and Girls Club of Greater Victoria Foundation v British Columbia (Attorney General), 2024 BCSC 442 (CanLII) (PDF) deals with cy pres or variation of a gift and the standard that is necessary. With the world changing so quickly, what might have seemed like a good idea a few decades ago or even last year may not have been such a good idea. Many charities could become insolvent even if they have significant restricted gifts. It is vital to have enough unrestricted gifts to pay for the operations of the charity. But if your charity is prepared to accept a restricted gift It is very important with restricted gifts to have amendment clauses, to have cy pres (variation clauses) and/or to have provisions that a gift agreement is subject to the policies of the charity as amended from time to time. The alternative is that the generous gift may sit and never be used.

Here is a very general summary of the case, but it is well worth reading in its entirety:

• Boys and Girls Club of Greater Victoria Foundation sought cy pres order relating to a restricted gift for a 98-acre property providing a youth camp and some capital funds for the maintenance of the camp
• Charity wanted to change restricted gifts to general charitable purposes for Boy and Girls Club Services Society, including after-school programs, nutritious breakfasts for children, etc.
• Evidence of the trust was from a campaign pamphlet for fundraising
• Since then, loss of provincial funding, lower usage of camp, property lost its tax exemption, capital improvements were needed, increased operating costs, and while greater need for programs in other areas that have waiting lists
• Court finds evidence inadequate to establish the impossibility or impracticability of trusts and funds
• Charity projections – court rejects them – not enough support
• Shows how much information is required for a cy pres application
• Even if it was impracticable, it would not turn restricted funds into unrestricted funds – just change as little as possible of the the restrictions/purposes
• There was no secondary purpose or cy pres clause in fundraising

Here is the text of the case: https://www.canlii.org/en/bc/bcsc/doc/2024/2024bcsc442/2024bcsc442.html

By Mark Blumberg, Blumbergs Professional Corporation