How do “board-restricted” endowment funds differ from “donor-restricted” endowment funds?
If, at the time a contribution is made to a foundation, the donor restricts the type or manner of investing the assets of the gift, or restricts the time or manner of making distributions of earnings from the gift, such restrictions normally can be modified or eliminated only with the written consent of a living donor or pursuant to a court proceeding. This includes restrictions establishing the contribution as part of the permanent endowment funds of the foundation. Restrictions placed on assets of the foundation by its governing board, however, such as designating a portion of the foundation’s assets as permanent or endowment funds, may usually be released or modified by resolution of the board acting alone.
