## Facts

- The Barnes Foundation, a Pennsylvania nonprofit administering Dr. Albert C. Barnes’s charitable trust, operated a world-known art collection under strict donor-imposed limits, including a requirement that the gallery remain in Merion, Pennsylvania.
- The governing instruments also constrained investments, spending, and operations to support an educational mission rather than conventional museum tourism.
- The court previously found the Foundation in severe financial distress and at risk of collapse absent major structural change.
- The Foundation filed a second amended petition seeking (1) expansion of its board from five to fifteen trustees and (2) authority to relocate the collection to a new Philadelphia facility under a three-campus model (Philadelphia gallery/education site; Merion administrative and horticultural site; Ker-Feal as a “living museum”).
- Students and supporters opposed relocation, urging survival through sale of non-gallery assets (including Ker-Feal) and possibly certain works held in storage.
- After extensive hearings, the court assessed whether asset sales could stabilize finances while staying in Merion, whether the proposed Philadelphia facility could be built within an asserted $100 million budget, and whether the three-campus plan was workable.
- Evidence included appraisals of non-gallery assets and testimony that major philanthropic funding and a city land contribution depended on relocation and restructuring.

## Issues

1. Whether changed circumstances and financial distress justified deviation from the donor’s express Merion-location requirement and related governance restrictions.
2. Whether relocation and board expansion were the least drastic modifications needed to carry out the trust’s primary charitable purpose.
3. Whether feasible alternatives (including liquidation of non-gallery assets) could preserve the Foundation’s mission while keeping the collection in Merion.

## Decision

- The Orphans’ Court granted the Foundation’s petition to amend its charter and bylaws and to modify the trust indenture.
- The court approved expansion of the Board of Trustees from five to fifteen members.
- The court authorized relocation of the art collection from Merion to a new Philadelphia facility as part of the proposed three-campus plan.
- The court found the Foundation’s financial condition dire and concluded that suggested alternatives, including sales of non-gallery assets, would not provide a realistic, durable solution.
- The court credited evidence that relocation and restructuring were necessary to secure substantial outside funding and to make the plan financially feasible.

## Legal Principles

- Under the doctrine of deviation, a court may modify administrative or specific restrictive terms of a charitable trust when compliance would substantially impair or defeat the trust’s central charitable purpose due to changed circumstances.
- Deviation requires an evidentiary showing that the requested modifications are necessary and are the least drastic means reasonably available to preserve and carry out the donor’s dominant intent.
- In evaluating necessity and least-drastic means, a court may consider financial projections, asset valuations, operational constraints, and the reliability and conditionality of pledged external funding.

## Conclusion

The court permitted targeted deviation from Dr. Barnes’s location and governance restrictions because strict compliance threatened the Foundation’s continued existence, and the record supported that relocation to Philadelphia and board expansion were the least drastic practical measures to preserve the trust’s overriding educational purpose.


In re Barnes Found., 2004 Pa. Dist. & Cnty. Dec. LEXIS 344 (Ct. Com. Pl. Montg. Cnty. Orphans’ Ct. Div. 2004)