## Facts

- George F. Harding created a nonprofit museum corporation to hold and display his arms, armor, and art collection for charitable and educational purposes open to the public.
- The museum’s charter and governing documents dedicated the collection and related assets to museum purposes for public benefit.
- After Harding’s death, the museum’s directors considered or undertook substantial transactions affecting the collection, including potential transfers or dispositions of significant items and changes to the museum’s use or location.
- The Illinois Attorney General alleged the museum’s assets were impressed with a charitable trust for the public and that the proposed actions risked diversion from the dedicated charitable purposes.
- The museum argued it owned the assets as a corporation and that its directors had broad corporate authority to manage, relocate, and dispose of property.
- Lower courts largely accepted the museum’s position and denied the Attorney General the full scope of requested equitable relief.

## Issues

1. Whether assets held by a nonprofit museum corporation for charitable and educational purposes are impressed with a charitable trust enforceable in equity, despite corporate title.
2. Whether the Illinois Attorney General has standing and authority to sue to enforce the charitable obligations of a nonprofit museum and restrain threatened diversion of charitable assets.
3. Whether the museum’s directors may substantially alter the use, location, or integrity of charitably dedicated assets without judicial approval under trust-law doctrines such as cy pres or deviation.

## Decision

- The Illinois Supreme Court reversed the lower courts’ acceptance of broad corporate autonomy.
- The Court held the museum’s property was subject to a charitable trust in favor of the public, notwithstanding corporate form.
- The Court held the Attorney General had standing and supervisory authority to enforce the charitable obligations attached to the museum’s assets.
- The Court held directors’ managerial discretion is limited by the corporation’s charitable purposes and the donor’s charitable intent; substantial departures require judicial oversight consistent with trust-law principles.

## Legal Principles

- Property dedicated to charitable and educational uses for public benefit may be treated as charitable trust property even when held in a nonprofit corporate form.
- A charitable corporation’s directors act in a fiduciary capacity with duties of obedience to charitable purpose and may not treat charitable assets as unrestricted corporate property.
- The Attorney General, as representative of the public beneficiaries of charitable assets, is the proper party to enforce charitable trusts and restrain threatened diversion.
- Significant changes to the use, location, or disposition of core charitable assets are subject to equitable control; where changed circumstances warrant modification, cy pres/deviation-type judicial approval is required rather than unilateral board action.

## Conclusion

The court treated the nonprofit museum as a fiduciary holder of assets dedicated to public charitable purposes, confirmed the Attorney General’s authority to enforce those obligations, and required that major changes to the collection or museum purpose proceed only within the constraints of charitable-trust law and judicial supervision.


People ex rel. Scott v. George F. Harding Museum, 72 Ill. 2d 44, 377 N.E.2d 1014 (Ill. 1978)