Nonprofit Organizations Law and Policy Third Edition - Libraries ...

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46 OVERVIEW OF THE NONPROFIT SECTOR CH.l Consequently, finding that the trial court did not err in denying the plaintiffs' motion for a preliminary injunction and appointment of a receiver, the May 2001 order will be affirmed. Affirmed. QUESTIONS Do you agree with the Virginia Supreme Court that the state's Attorney General should not be permitted to intervene in the disposition of assets of nonprofit corporations devoted to charitable purposes in the absence of a specific power granted by the state legislature? The Virginia Court decided the State Corporation Commission should be the proper forum for issues involving management of charitable assets and that the Attorney General does not have "inherent power" to act of behalf of the public in such matters. The Court disputed the Attorney General's position that a Virginia nonstock corporation devoted to charitable purposes is "essentially" a charitable trust. Would a state corporation commission better serve the public than a state's Attorney General? NOTE Shortly after the decision of the Virginia Supreme Court in Joco, the Virginia legislature enacted Code § 2.2-507.1 to provide the attorney general with authority and oversight of charitable corporations. QUESTION Would a state statute that gives the attorney general authority and oversight of charitable corporations, such as Va. Code § 2.2-507.1, subject a charitable corporation to state trust provisions? Consider the question in light of the Virginia Supreme Court's interpretation of Va. Code § 2.20-507.1. DODGE v. TRUSTEES OF RANDOLPH MACON WOMAN'S COLLEGE Supreme Court, Virginia, 2008 276 Va. 10, 661 S.E.2d 805 Opinion by CHIEF JCSTICE LEROY R. HAsSELL, SR. In this appeal, we consider whether Code § 2.2-507.1 imposes certain duties upon a Virginia non stock charitable corporation and renders a nonstock charitable corporation subject to the provisions of the Uniform Trust Code, § 55-541.01, et seq. The plaintiffs, Jenna Dodge, Sarah Hassmer, Hayley J. Maxwell, LauraMcKean-Peraza, Kelsey McCune, Jennifer C. Mullins, Mary E. Yardley, Alice D.Priebe, and Roy C. Johns filed their amended complaint against the Trustees of Randolph-Macon Woman's College, d/b/a Randolph-Macon Woman's College. Dodge, Hassmer, Maxwell, McKean-Pera-
SEC. II ORGANIZATIONAL STRUCTURE 47 za, McCune, Mullins and Yardley are students at the College. Priebe is a "fifth generation graduate" of the College, and she has donated $40,000.00 to the College to fund scholarships. Johns is married to a graduate of the College, and he has donated money and art to the College. The plaintiffs allege in their amended complaint that the College was established in 1891 for the primary purpose of educating women, and that all gifts and donations to the College since its inception were given to support that objective. The plaintiffs allege that the College acquired, improved, and maintained real property with funds donated to the College for the purpose of supporting the College as a liberal arts, educational institution for women. The plaintiffs also allege that the College acquired numerous valuable works of art placed in various locations "across [the College's] campus and in [its] Maier Museum" and that the art and "the facilities to house such works [,] were bought and improved and are maintained by funds donated to [the College] for the purpose of supporting ... a liberal arts, single-sex educational institution." The plaintiffs allege that the College plans to sell assets, including its valuable art collection, to finance physical changes at the campus that will enable the College to educate both men and women. The plaintiffs also allege that the College plans to amend its articles of incorporation to reflect that the College will educate men and women. The plaintiffs further allege that the aforementioned acts are "contrary to [the College's] original and ongoing express charitable purpose as an institution created primarily to educate women in a liberal arts curriculum under the name of Randolph-Macon Woman's College." The plaintiffs assert that the College is a charitable trust and that the plaintiffs are beneficiaries within the intendment of the Uniform Trust Code. The plaintiffs also assert that the College breached certain duties owed to them as trust beneficiaries. The plaintiffs allege that the College's charitable assets are deemed to be held in trust in furtherance of the College's charitable purposes set forth in its governing documents, pursuant to Code § 2.2-507.1, and that the College breached its fiduciary duties. The plaintiffs asked that the circuit court declare that the College's actions are contrary to the plaintiffs' interests as trust beneficiaries and contrary to the charitable purposes of the corporation. The plaintiffs also asked that the circuit court enjoin the College from implementing its plan to establish a coeducational college and prohibit the College from changing its name. * * * Upon consideration of submissions by counsel, the circuit court held that the Uniform Trust Code is not applicable to the College and that Code § 2.2-507.1 neither imposes duties upon the College nor abrogates the statutory provisions of the Virginia Nonstock Corporation Act, which governs the conduct of the trustees of the College. The plaintiffs appeal.* * * Code § 2.2-507.1 states:
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