Duhaime's Law Dictionary


Endowment Definition:

The devotion of property to a specific and particular trust.

Related Terms: Bequeath or Bequests, Legacy, Charity

The transfer of money or property (usually as a gift) to a public or charitable organization for a specific purpose, such as medical research, parks or scholarships.

In Re Clergy Orphan, Justice Davey of the English Court of Appeal wrote, in the context of the English statute of 1853:

"[A]ll property of every description belonging to or held in trust for a charity, and whether held upon trusts or conditions which render it lawful to apply the capital to the maintenance of the charity, or upon trusts which confine the charitable application to the income, is an endowment...."

In Re St. John Street Wesleyan Methodist Chapel, Justice Stirling also noted the expansive statutory definition in the 1853 English statute but added that the term endowment:

"... cannot be narrowed so as only to include a gift appropriated for some specific purpose with reference to the charity. It includes property and income which is applicable to the general purposes of the charity, as well as property the income of which is applicable only to some specific purpose in connection with the charity; and that being so it cannot be said that this charity is not supported by income arising from any endowment...

"The true distinction is that endowment is properly regarded as a fruit-bearing source....

"[E]ndowment ... means ... the devotion of property to a specific and particular trust."

More recently (1967), Justice Danckwerts of the United Kingdom wrote, in Re Adams:

"In my opinion the words endowing or endowment are not limited to the provision out of capital expenditure for the actual amenity bed. I think that by endowment or endow may also be meant providing a capital sum out of which income will be produced that will pay for the services which it is desired will be provided in respect of the endowment in question....

"[E]ndowment also includes the meaning of provision of a fund which, by the income thereby derived, pays for the purpose which is the object of the gift. A very simple illustration of that is gifts, for instance, to the National Trust. In that case there is a gift of land, and in addition the National Trust desires to have an endowment of the land given, that is to say, a fund which will provide means for the maintenance and upkeep of the land and buildings, the subject of the gift. In the same way the gift of an endowment of a hospital bed in my view includes the income of a fund which will provide some support for the patients who occupy the bed."

In the British Columbia Supreme Court decision of Justice Lowry in Arthritis Society v. Vancouver Foundation, circa 1992, his Lordship referred to "the most common definition of the term endowment" as:

"... the provision of a fund which is intended to generate fixed revenue for the support of a charity...."

The Court then noted the wider, alternate definition of endowment:

"Transfer, generally as a gift, of money or property to an institution for a particular purpose such as a gift to a hospital for medical research. The act of establishing a fund, or permanent pecuniary provision, for the maintenance of a public institution, charity, college, etc. The bestowing of money as a permanent fund, the income of which is to be used in the administration of a proposed work."

REFERENCES:

  • Arthritis Society v. Vancouver Foundation, 47 E.T.R. 1 (1992)
  • Charitable Trusts Act, 1853 (16 & 17 Vict.), c. 137
  • Re Adams, Gee v Barnet Group Hospital Management Committee, [1967] 3 All ER 285
  • Re Clergy Orphan Corporation, [1894] 3 Ch. 145, at page 151.
  • Re St. John Street Wesleyan Methodist Chapel, [1893] 2 Ch. 618

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