In my last post, I wrote about the pros and cons of signing an enforceable gift pledge. Now comes word of a case in California involving a gift pledge that was rescinded.
The St. John’s Health Center Foundation, affiliated with the St. John’s Health Center in Santa Monica, California, is suing the estate of Paula Kent Meehan, a wealthy philanthropist who died in 2014.
[Full disclosure: I met Ms. Meehan on a number of occasions and successfully solicited a planned gift from her estate on behalf of a former non-profit employer.]
Ms. Meehan signed a $5 million pledge to the foundation which she subsequently rescinded after a change in hospital administration. The foundation for its part added Ms. Meehan’s name to their donor wall and featured her in their newsletter, among other things, in recognition of her pledge.
Should her original pledge stand, given the subsequent stewardship actions the foundation took? Or should her rescinding of the pledge be the last word, notwithstanding whatever the foundation did to honor her? The case is in the courts, but the outcome will affect donors and charities alike.
Just another reason for donors not to sign enforceable pledges.
Read an analysis of the story from WealthManagement.com here. The foundation’s complaint can be read here. The Los Angeles Times story on this case can be read here.
Questions or comments? Contact me on Twitter @juanros.