The Barnes Foundation, a Corporation

In 1922, Albert Barnes founded the Barnes Foundation (the foundation), a nonprofit corporation designed to advance the arts through the maintenance of an art gallery and arboretum on the site of Barnes’s home in Merion Township, Pennsylvania. Via trust, Barnes donated his artwork collection to the foundation. The terms of the trust were incorporated into the foundation’s bylaws. Barnes also provided an initial endowment of $6 million. By 2002, Barnes’s endowment was depleted, and the foundation was in financial trouble. The foundation brokered an agreement with two philanthropic institutions, by which those institutions would help the foundation raise $150 million in return for (1) an expansion of the foundation’s board of trustees from five seats to 15 and (2) a relocation of the collection from Merion to Philadelphia. Because both propositions contravened the trust’s restrictions, the foundation petitioned the court for permission to amend. In its petition, the foundation argued that the complexity of operating a modern nonprofit merited a larger board. It also argued that relocation was required by financial necessity because the foundation needed the philanthropic institutions’ partnership to stay afloat, and that partnership was predicated on relocation The court analyzed both proposed amendments to determine whether they were permitted under the doctrine of deviation for altering trusts.