US Laws, Codes, Statutes & Cases

 
  § 513. Administration of assets received for specific purposes.
    (a)  A corporation which is, or would be if formed under this chapter,
  classified as a Type B corporation shall hold full ownership  rights  in
  any assets consisting of funds or other real or personal property of any
  kind,  that may be given, granted, bequeathed or devised to or otherwise
  vested in such corporation in trust for, or with a  direction  to  apply
  the  same to, any purpose specified in its certificate of incorporation,
  and shall not be deemed a trustee of an express trust  of  such  assets.
  Any  other corporation subject to this chapter may similarly hold assets
  so received, unless otherwise provided by law or in the  certificate  of
  incorporation.
    (b)  Except  as  may be otherwise permitted under article eight of the
  estates, powers and trusts law or section 522 (Release  of  restrictions
  on  use  or investment), the governing board shall apply all assets thus
  received to the purposes specified in the gift  instrument  and  to  the
  payment  of the reasonable and proper expenses of administration of such
  assets. The governing board shall cause accurate accounts to be kept  of
  such  assets separate and apart from the accounts of other assets of the
  corporation.  Unless the terms of the particular gift instrument provide
  otherwise, the treasurer shall make an annual report to the members  (if
  there  be  members)  or  to the governing board (if there be no members)
  concerning the assets held under this section and the use made  of  such
  assets and of the income thereof.
    (c)  The  governing board may appropriate for expenditure for the uses
  and purposes for which an endowment fund is established so much  of  the
  net  appreciation,  realized (with respect to all assets) and unrealized
  (with respect only to readily marketable assets), in the fair  value  of
  the  assets  of  an endowment fund over the historic dollar value of the
  fund as is prudent under the standard established by section  717  (Duty
  of directors and officers). This section is not intended to restrict the
  authority  of  the  governing  board  to expend funds as permitted under
  other  law,  the  terms  of  the  applicable  gift  instrument  or   the
  certificate of incorporation of the corporation.
    (d)  Paragraph  (c)  of  this section does not apply if the applicable
  gift instrument indicates the donor's intention  that  net  appreciation
  shall  not  be  expended.  A  restriction  upon  the  expenditure of net
  appreciation may not be implied from a  designation  of  a  gift  as  an
  endowment,  or  from a direction or authorization in the applicable gift
  instrument to use only "income,"  "interest,"  "dividends,"  or  "rents,
  issues  or  profits,"  or  "to  preserve  the  principal  intact,"  or a
  direction which contains other words of similar  import.  This  rule  of
  construction applies to gift instruments executed or in effect before or
  after the effective date of said paragraph (c).