Frank A.

Monti, CPA
1279 Thornapple Drive
Osprey, FL 34229-7810
August 3, 2015
Honorable John T. Ellis
36 Lake St. P.O. Box 900
Tupper Lake, NY 12986
Re: The Matter of Paul Smiths College
RJI No.: 16-1-2015-0317
RJI Dage: 7-17-2015 Franklin County Clerks Office
Index No. 2015-597
Type of Action: Other
I am writing in regard to the motion filed to modify the restrictions on the bequest of
Phelps Smith filed on behalf of Paul Smiths College of Arts and Sciences. The petition
notes that certain restrictions upon a gift from the Estate of Phelps Smith have become
impracticable and wasteful. I disagree.
I am a Certified Public Accountant licensed in the states of Massachusetts, Rhode
Island and Maryland and am an expert in the area of restricted philanthropy. I write a
blog for Inside Philanthropy under the caption The Gift Adviser and have been admitted
as an expert witness in the Rhode Island state courts and the U.S. District Court.
I am writing to you today relative to this case to urge you to deny the petition of Paul
Smiths College. I am not connected to Paul Smiths College in any way and am not an
alumnus of the college. I am writing solely on behalf of philanthropists past and future
and for the preservation of the laws of restricted giving.
The petition clearly notes the permanent restrictions that accompanied the charitable
testamentary gift from the Estate of Phelps Smith, pursuant to the Fourth Clause of his
Last Will and Testament, executed on February 21, 1928.
I have noted that pursuant to EPTL 8-1.1(f) the New York State Attorney General has
been informed of this petition and expressed No Objection to the requested relief. I
believe that the Attorney General is in error and should have objected to the requested
relief thereby leaving it to the courts to decide. The Attorney General has an obligation
to past philanthropists to ensure that the terms of their restricted gifts, accepted in full by
the recipient institutions, are carried out as expressed and agreed upon at the time of
the gift.

Phelps Smith left a sizable gift of real property and other assets for the creation of an
institution of higher education with the direction that that institution be forever known as
Paul Smiths College of Arts and Sciences. The college now seeks relief from that
direction so that the institution may be renamed in connection with the receipt of a
promised gift, the details of which are not contained in the petition. (I have heard that
the $20 million gift will be paid over a 25-year period.)
Relief is sought under EPTL 8-1.1(c)(1) wherein it is noted that the Supreme Court is
authorized whenever it appears to such court that circumstances have so changed
since the execution of an instrument making a disposition for religious, charitable,
educational or benevolent purposes as to render impracticable or impossible a literal
compliance with the terms of such disposition, the court may, on application of the
trustee or of the person having custody of the property subject to the disposition and on
such notice as the court may direct, make an order or decree directing that such
disposition be administered and applied in such manner as in the judgment of the court
will most effectively accomplish its general purposes, free from any specific restriction,
limitation or direction contained therein
The petitioner argues that changing demographics and the financial challenges facing
higher education today makes it impracticable, and may make it impossible, to maintain
the institution for higher education in the future, The very fact that this statement and
request was not proposed prior to the appearance of a donor making a request that
violates the directive in the estate of Phelps Smith makes it highly suspect that this
statement has any validity. If the court also finds this statement of questionable merit,
then a negative response to the petition is the only logical conclusion. The size of the
gift should be irrelevant to the decision. The question facing the court is whether the
provisions of the Phelps Smith gift are impracticable and impossible to adhere to today.
Restricted philanthropy is a significant portion of philanthropy today. It was likely
invented by the charities as a way of providing greater assurance to the philanthropic
community that gifts would be used as intended by the donor. Restrictions in perpetuity
are especially attractive to donors (for both valid and frivolous reasons) and help
charities generate sizable gifts. The very specific language of the Phelps Smith gift; the
use of the word forever indicates the importance of the restriction to Mr. Smith and his
concern for potential changes in the future. The court should not trample on Mr. Smiths
legacy without significant and compelling reasons.
Some years ago, I was involved in a similar legal discussion regarding a restricted gift
made in the 1920s to one of my charitable organization clients. I would like to briefly
discuss this case as an example of a valid change to a donors restricted gift instrument
justified because it was impracticable, and impossible, to continue to operate according
the donors restricted request.
A donor had gifted land to a child welfare agency in which the gift instrument
permanently-restricted the land for use as an orphanage. The orphanage operated for
many years but was closed when institutional care for children was replaced with the

foster care model. The client kept the property vacant until the mid-1980s when it was
determined that the orphanage model would likely never return to the child welfare care
industry. When the charity sold the land (now vacant for many years) to a developer the
neighbors brought suit claiming the sale violated the restricted gift instrument. The
charity argued that the sale of the property, and the placing of the sales proceeds into a
restricted endowment fund with the income restricted to support the current child
welfare model was more appropriate than leaving the land vacant. The charity argued
that it had become impossible to continue to operate according to the terms of the
restricted gift. The court agreed with the charity; the property was sold and the sales
proceeds invested in perpetuity in an endowment fund providing annual income to the
program.
This is a clear example of what was envisioned under EPTL 8-1.1(c)(1). I do not
believe the existence of a potential donor, demanding donor recognition that is no
longer available to the college to give, is sufficient for vacating the Last Will and
Testament of Phelps Smith. Allowing such a change will jeopardize restricted giving
forever into the future.
Thank you for your time.
Sincerely,
Frank A. Monti, CPA