Herbst v. University of Colorado Foundation.
2022 COA 38. No. 20CA2067. Uniform Prudent Management of Institutional Funds Act—Charitable Trust—Special Interest—Standing.
March 31, 2022
The University of Colorado Foundation (Foundation) is a nonprofit charitable corporation that receives, manages, and prudently invests private donations for the benefit of the University of Colorado (CU) and supports CU’s philanthropic endeavors through donor stewardship. Plaintiffs are a donor to and former Foundation trustee, two CU graduates, and a current CU student. Plaintiffs were unhappy with the Foundation’s 2009 return on its investments. They filed a class action suit against the Foundation and its governing board of directors (collectively, defendants) for violation of the Uniform Prudent Management of Institutional Funds Act (Act) and breach of fiduciary duty concerning a charitable trust. The district court dismissed the complaint for failure to state a claim on which relief could be granted and lack of standing.
Plaintiffs argued on appeal that the district court erred in finding that they lacked standing. Under the Act, as at common law, only the Attorney General or a person with a special interest in a charitable trust has standing to sue for mismanagement. Parties with special interests in the charitable trust’s benefits have been accorded standing to enforce the trust, but only when they are entitled to benefits different from those to which members of the public are entitled generally. Mere status as a donor or intended beneficiary of a charitable trust does not confer special interest standing. Plaintiffs here do not have a special interest in the Foundation’s management of its investments and therefore lack standing. Accordingly, the district court correctly dismissed the complaint.
Defendants’ request for appellate attorney fees was denied for failure to explain the legal and factual basis for an award as required by C.A.R. 39.1.
The judgment was affirmed.