69th Legislature passes SB 134 enhancing endowment agreement protections

Senate Bill 134, introduced in the Montana Legislature on March 28, 2025, aims to enhance the legal framework surrounding endowment agreements between charitable organizations and donors. The bill defines key terms related to endowment funds, including "endowment agreement," "endowment fund," and "gift instrument," establishing a clearer understanding of the roles and responsibilities of both parties involved in charitable contributions.

A significant provision of the bill is the protection it affords to donor-imposed restrictions. It stipulates that charitable organizations must adhere to these restrictions unless explicitly permitted by federal or state law to deviate from them. Should a violation occur, the bill allows donors or their legal representatives to file a complaint within three years of discovering the breach, providing a structured avenue for accountability.

The introduction of SB 134 has sparked discussions among lawmakers and stakeholders in the charitable sector. Proponents argue that the bill strengthens donor rights and ensures that contributions are used as intended, potentially increasing public trust in charitable organizations. Critics, however, express concerns about the administrative burden this could place on smaller organizations, which may struggle to navigate the complexities of compliance with donor restrictions.

The implications of SB 134 extend beyond legal definitions; they touch on the economic landscape of charitable giving in Montana. By reinforcing donor protections, the bill may encourage more individuals to contribute to charitable causes, knowing their intentions will be legally upheld. Conversely, if the compliance requirements are perceived as too onerous, it could deter potential donors and impact the funding of various charitable initiatives.

As the legislative process unfolds, the bill's supporters and opponents will continue to debate its merits, with potential amendments likely to emerge as it moves through the legislature. The outcome of SB 134 could significantly shape the relationship between donors and charitable organizations in Montana, influencing how contributions are managed and utilized in the future.