## Facts

- In 1922, Dr. Albert C. Barnes created the Barnes Foundation as a nonprofit trust to hold and display his art collection and support related educational work.
- Barnes transferred the collection to the Foundation together with a substantial endowment (reported as \$6 million at formation) and imposed strict limits through the trust and bylaws.
- The governing terms required, among other things, that the collection remain in Merion Township, Pennsylvania, and that the Foundation be governed by a five-member board.
- Over time, the Foundation’s financial condition deteriorated; by 2002, its endowment was depleted and it faced a serious risk of being unable to continue operating in a way consistent with its charitable mission.
- The Foundation pursued a plan to obtain major outside support by partnering with two philanthropic institutions that would raise significant funds (reported as \$150 million) for the Foundation.
- The proposed funding was conditioned on two changes that conflicted with Barnes’s governing terms: expanding the board from five to fifteen trustees and relocating the art collection from Merion to Philadelphia.
- Because the restrictions were part of the trust and bylaws, the Foundation petitioned the Pennsylvania Court of Common Pleas to modify the governing terms under the doctrine of deviation.
- The Commonwealth of Pennsylvania participated in the matter in its role connected to charitable trust oversight and the public interest.

## Issues

1. Whether the doctrine of deviation permits the court to modify the Barnes Foundation’s trust and bylaw terms to expand the board from five to fifteen trustees despite the donor’s express limits.
2. Whether the doctrine of deviation permits the court to allow relocation of the Barnes art collection from Merion to Philadelphia contrary to the trust’s location requirement, based on the Foundation’s financial condition and the conditions attached to the proposed funding.

## Decision

- The court granted the Foundation’s petition to deviate from the trust’s restrictions.
- The court authorized expansion of the board of trustees from five members to fifteen members.
- The court authorized relocation of the art collection from Merion Township to Philadelphia.

## Legal Principles

- A court may apply the doctrine of deviation to modify trust terms when circumstances not anticipated by the settlor arise and strict compliance would threaten or defeat the trust’s purposes.
- Deviation is permitted when the requested changes are necessary to preserve or further the charitable objectives of the trust, even if the changes conflict with specific administrative directions in the governing instrument.
- In assessing deviation, the court focuses on whether enforcing the original restrictions would likely impair continuation of the charitable work the trust was created to carry out.

## Conclusion

The Court of Common Pleas approved deviations from Albert Barnes’s governing restrictions, concluding that unforeseen financial circumstances placed the Foundation’s charitable mission at risk and that expanding the board and relocating the collection were permitted changes under the doctrine of deviation because they were necessary to keep the institution functioning and able to carry out its central purposes.


Barnes Foundation v. Commonwealth of Pennsylvania, 2004 WL 1960204 (Pa. Ct. Com. Pl. 2004)