Montana Allows Donor Standing for Endowment Violations, While Similar Efforts Are Pending in Oklahoma

Law Also Allows Charities to Obtain Judicial Declarations of Endowment Agreements’ Rights and Duties

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Authors: Emanuel L. McMiller , Angela T. Fogt , Heather Elizabeth Moore , John A. Gardner , Jason M. Rauch

At a Glance

The purpose of Montana’s new Safeguarding Endowment Gifts Act is to allow donor standing for violations of donor-imposed restrictions for endowment funds that are governed by an endowment agreement.
Montana is now the fifth state to allow donor standing for endowment violations, following Iowa, Kansas, Georgia and Kentucky.
The Oklahoma Legislature is considering a similar effort.

Montana Allows Donor Standing for Endowment Violations

On April 17, 2025, Montana’s governor signed Senate Bill 134 — the Safeguarding Endowment Gifts Act — which took effect immediately and amends Montana’s version of the Uniform Prudent Management of Institutional Funds Act (UPMIFA, located at §§ 72-30-101–72-30-213, MCA). This new law retroactively applies to any endowment agreement entered on or after January 1, 1975.

The Safeguarding Endowment Gifts Act is similar to the Donor Intent Protection Acts recently enacted in Kansas, Georgia and Kentucky. The purpose of these laws is to allow donor standing for violations of donor-imposed restrictions for endowment funds that are governed by an endowment agreement.

Pursuant to Senate Bill 134, a donor or their legal representative can file a complaint against a charitable organization within three years after discovery of that organization’s violation of the endowment agreement. The law defines “legal representative” as any of the following:

the administrator or executor of the donor’s estate (if made known by the donor to the charitable organization)
a surviving spouse (if a court judgment has settled the accounts of the donor’s estate)
a person designated in an endowment agreement to act in place of the donor for all matters expressed in the agreement

While this law grants donor standing, it does not allow donors to seek the return of donated funds to the donor or the donor’s legal representative or estate. Instead, the law limits donors (and their legal representatives) to remedies that are consistent with the charitable purposes expressed in the endowment agreement.

This new law also expressly allows a charitable organization to obtain a judicial declaration of the rights and duties expressed in an endowment agreement, including the interpretation, performance, enforcement and validity of the agreement. Additionally, the law does not alter an institution’s right to seek modification of a donor-restriction on the management, investment, purpose, or use of an endowment fund through the processes permitted by UPMIFA or the endowment agreement itself.

However, the law requires that, if an institution is unable to fulfill a term in an endowment agreement, the institution must notify the donor or their legal representative of its inability and offer an alternative solution that “closely matches” the initial term in the endowment agreement. This notice must be provided 90 days in advance of proceeding with any alternative solutions, and thus could also be interpreted as a 90-day pre-suit notice requirement before the institution utilizes any modification processes permitted by UPMIFA.

Montana is now the fifth state to allow donor standing for endowment violations, following Iowa (which allowed for donor standing when it first adopted UPMIFA in 2008), Kansas (which adopted the Donor Intent Protection Act in 2023), and Georgia and Kentucky (which adopted the Donor Intent Protection Act in 2024).¹ See Iowa Code § 540A.106(5); K.S.A. §§ 58-3621–58-3625; O.C.G.A. §§ 14-3-190–14-3-192; KRS § 273.155; see also our prior discussions of the Kansas Donor Intent Protection Act and the Georgia and Kentucky Donor Intent Protection Acts.

Similar Efforts Are Pending in Oklahoma

In Oklahoma, Senate Bill 844 would create Oklahoma’s version of the Safeguarding Endowment Gifts Act. Although the bill was approved by the Senate Retirement and Government Resources Committee and placed on general order in early March, it has not yet made it out of the Senate. However, the bill could still advance prior to the end of Oklahoma’s legislative session in May 2025.

Future Developments

Our team will continue to monitor developments of the law in this area.

Notably, while Louisiana and New York do not expressly provide for donor standing, they require that an institution provides notice to donors when it attempts to modify restrictions on an institutional fund. See La. R.S. § 9:2337.6; NY CLS N-PCL § 555. Additionally, North Carolina’s Uniform Trust Code provides for donor standing to enforce a charitable gift (which arguably could apply to endowment violations otherwise governed by UPMIFA). See N.C. Gen. Stat. § 36C-4-405.1(b).