This piece is based on grapevine information from the NY AG’s office that was given to a nonprofit which asked for specific guidance on applying NYPMIFA’s old/small fund (>20yrs/<$100K) provision. (and, of course, there is total deniability by the AG and anyone else if it is too embarrassing)
Before giving you the details, I just want to point out a bit of irony. The point of this particular provision was to let NY nonprofits easily clean up their small, old and outdated funds WITHOUT need for AG approval (just notice and chance to object) or the need for a cy-pres action. Apparently, the contact at the AG’s office let it be known that for now, the AG would basically object initially to any of these filing so that the nonprofit would NOT move ahead by default (and obviously give the AG’s office time to review and negotiate if need be).
The irony is that this provision was intended to essentially let these particular applications to go through by default (unless there was a glaring problem, of course). There is another provision in the statute that addresses changing funds that don’t meet the >20yrs/<$100K criteria.
In other words, the AG’s office – for now – is planning on ignoring a key feature of this particular clean-up provision and treating the requests like other requests for modification of a fund agreement under NYPMIFA. A little disappointing to hear the AG’s office is planning to essentially rewrite a statute by their own actions. Maybe it is only short term procedure until they can post more guidance; maybe it will become standard procedure and the clean-up of old/small funds won’t be so easy after all.
OK – here is what we learned.
If you want to use this nifty new provision of NYPMIFA, you should email your request to Carl Distefano, an attorney in the AG’s charities bureau (firstname.lastname@example.org) in PDF the following:
- A copy of the board resolution authorizing the modification.
- A copy of any written gift instruments pertaining to the funds.
- Any correspondence with donors, if the donor is still alive and was asked about modification.
- Any documentary evidence of value and age of the fund to establish that it is less than $100,000 and over 20 years old.
- Statements required in the statute regarding how the funds will be used and that the existing restriction is “impracticable, impossible or wasteful.”
Here is a PDF of this provision (with my own highlights and underlines) NYPMIFA release of old fund provision. I would highly recommend reading the actual statute and, of course, consulting with counsel before attempting this. Reaching out to the Charities Bureau of the AG’s office isn’t a bad idea either.