IN THE SUPREME COURT OF IOWA

No. 19–0155

Filed November 8, 2019

IN THE MATTER OF THE APPLICATION OF COE COLLEGE FOR 

INTERPRETATION OF PURPORTED GIFT RESTRICTION,

COE COLLEGE,

Appellant.

Appeal from the Iowa District Court for Linn County, Fae HooverGrinde, Judge.

A college appeals a district court judgment denying its request for 

declaratory relief as to the terms of a 1976 charitable gift. AFFIRMED.

Gary J. Streit, Megan R. Merritt, and Teresa K. Baumann of 

Shuttleworth & Ingersoll, P.L.C., Cedar Rapids, for appellant.

Thomas J. Miller, Attorney General, and Chantelle Smith, Assistant 

Attorney General, for appellee.
2

MANSFIELD, Justice.

I. Introduction.

How permanent is a “permanent home”? This case concerns seven 

works painted by one of Iowa’s best-known artists—Grant Wood. In 1976, 

a foundation donated the paintings to Coe College in Cedar Rapids. The 

gift letter stated that the paintings would be given to the college “and that

this would be their permanent home, hanging on the walls of Stewart 

Memorial Library.”

For years, the college treated the paintings on its books as an 

unrestricted gift that could be sold or otherwise alienated. But in 2016,

an auditor determined the paintings should be treated as a restricted gift. 

This had an adverse impact on the college’s endowment fund and led the 

college to file a petition seeking a judicial interpretation of the gift’s terms. 

Following a hearing on a stipulated record, the district court ruled that

there indeed exists a restriction on the alienability of the paintings. The

court also ruled that neither Iowa Code section 540A.106, part of the 

Uniform Prudent Management of Institutional Funds Act (UPMIFA), nor

the common law doctrine of cy pres, codified at Iowa Code 

section 633A.5102, applied; accordingly, the court declined to modify the 

restriction.

The college appeals. It argues that the 1976 gift was unrestricted, 

but if this court finds it to be restricted, we should modify or discard the 

restrictions. We conclude that the language in the gift letter did restrict 

the gift. We conclude that the UPMIFA does not apply because these are 

not “funds” but are instead “program-related assets.” Lastly, we find it is 

premature to consider the application of cy pres because there is no 

showing the gift restrictions cannot be carried out at present.
3

II. Facts and Procedural History.

In 1932, hotel magnate Eugene C. Eppley commissioned renowned 

artist Grant Wood to paint a mural in the Hotel Montrose in Cedar Rapids. 

The mural became known as “The Fruits of Iowa.” When the Hotel 

Montrose was sold in 1957, some fifteen years after Wood’s death, Eppley 

had the mural taken down and separated into seven separate panels. He 

loaned the paintings to Coe College, a private liberal arts college in Cedar 

Rapids. The loan was to last indefinitely, with the understanding that the 

paintings could be taken back at any time after one year passed. The 

paintings remained on display at Coe College for nearly twenty years.

At some point in time, the ownership of the paintings moved from 

Eppley personally to the Eppley Foundation, a charitable institution whose 

purposes included to 

promote the well-being of mankind and to assist the needy 

and unfortunate, by religious, charitable, scientific, literary or 

educational activities; and for such purposes to make grants, 

donations, and contributions to corporations . . . organized 

and operated exclusively for religious, charitable, scientific, 

literary or educational purposes.

In 1976, while winding up its affairs, the Eppley Foundation 

terminated the previous loan arrangement and donated the paintings to 

Coe College. The Eppley Foundation’s gift letter stated,

The Eppley Foundation Board of Directors [has] 

approved that the Grant Wood paintings be given to the Coe 

College and that this would be their permanent home, hanging 

on the walls of Stewart Memorial Library.

A Plaque to be installed, per attached proposal, was 

discussed with you when you were here, with a piece of marble 

and attaching the bust and the letters to the marble, including 

the two bronze plaques which were outlined on the sketches.

We are again enclosing a picture of how this plaque will 

look like when it is completed but it will be done in bronze 

instead of aluminum.
4

Mr. Christian gave you the name of the Company in 

Omaha that made this plaque, The J. P. Cooke Co., 

1311 Howard Street, Omaha, Nebraska, 68102.

Before this plaque is installed, we want to approve the 

full[-]scale drawing. Please return the picture of the plaque 

and also the sketch which is attached when you are through 

with same.

The plaque states in relevant part, “In [Eppley’s] memory, the Grant Wood 

Paintings the Fruits of Iowa were given to Coe College by the Eugene C. 

Eppley Foundation Inc.” It includes a bust of Eppley and an inscription 

with the years he lived. It further states that Eppley’s “great wealth” was 

“to be distributed for the benefit of youth and for the lasting good of 

mankind.”

The paintings have remained under the ownership of Coe College 

since then and are among several Grant Wood pieces on display in the 

Perrine Gallery at Stewart Memorial Library. Coe College occasionally 

lends them to other institutions for temporary exhibition purposes and to 

raise funds for the maintenance of the paintings.

In 1977, the Eppley Foundation was dissolved by the Nebraska 

Secretary of State for nonpayment of biennial fees, and nothing has been 

filed since then to revive the Eppley Foundation.

From 1976 until 2016, Coe College accounted for the paintings as 

unrestricted assets. In 2016, however, as part of a routine annual audit, 

the college’s auditors determined this previous classification had been a 

mistake and reclassified the paintings as permanently restricted net

assets. This matters to Coe College because the classification of the 

paintings affects the value of Coe College’s endowment fund. Coe College

turned to the courts for assistance.

On February 5, 2018, Coe College filed a petition seeking an 

interpretation of the Eppley Foundation’s gift as unrestricted. If 
5

necessary, the petition also sought a lifting of any restrictions 

accompanying the gift. Coe College argued that the reference to a 

“permanent home” in the 1976 gift letter was meant to contrast with the 

prior situation where the paintings had been on loan and thus only on 

temporary display—and not to serve as a bar to the college selling or 

otherwise disposing of the paintings. Alternatively, Coe College asked the 

court to remove the restrictions.

Since the Eppley Foundation was no longer in existence, Coe College 

arranged for the attorney general to be served with the petition. Pursuant 

to Iowa Code sections 540A.106 and 633A.5108, he participated in the 

district court proceedings, resisting Coe College’s petition in each respect.

Following briefing and a hearing on a stipulated record, the district 

court issued its ruling on January 2, 2019. It held that “the Eppley 

Foundation’s intent expressed in the February 16, 1976 Gift Letter 

transferring the Paintings to Coe College was to place a permanent 

restriction on alienation of the Paintings.” The court further found that 

“the permanent restriction on alienation [did] not merit application of Iowa 

Code section 540A.106 or the doctrine of cy pres, under Iowa Code 

section 633A.5102, releasing Coe from said restriction.”

Coe College appealed, and we retained the appeal.

III. Standard of Review.

The parties disagree whether this declaratory action is equitable or 

legal in nature. “Our review of an appeal from a declaratory judgment 

action is determined by how the case was tried in district court.” Clarke 

Cty. Reservoir Comm’n v. Robins Revocable Tr., 862 N.W.2d 166, 171 (Iowa 

2015). Although the attorney general points out that the college filed this 

case as a law action, an action tried wholly in equity will be subject to a 

de novo standard of review even if it was filed at law. See Passehl Estate 
6

v. Passehl, 712 N.W.2d 408, 413–14 (Iowa 2006). Here, the court did not 

rule on evidentiary objections; indeed, the court did not need to because 

the case was tried on a stipulated record. By contrast, in Salsbury v. 

Northwestern Bell Telephone Co., we reviewed at law a determination that 

a charitable subscription was binding, where the matter was tried at law—

i.e., objections were made and ruled on. 221 N.W.2d 609, 609–11 (Iowa 

1974) (en banc).

In addition, the relief sought by the parties here was equitable—

neither party sought damages or a declaration that damages were not due. 

Cy pres is an equitable doctrine, so in deciding whether it applies, our 

review is de novo. Kolb v. City of Storm Lake, 736 N.W.2d 546, 552–53 

(Iowa 2007). Lastly, the record consists of stipulated facts in any event. 

For all these reasons, we apply a de novo standard of review here.

IV. Analysis.

A. Is There a Restriction on Alienation of the Paintings? In 

Iowa,

[a] donor of property for a charitable use may impose 

such conditions as he may choose, including a restraint on 

alienation. This right is an exception to the prohibition 

against restraint on alienation.

. . . .

“When the charitable use is created by gift, the donor 

may impose conditions and limitations which shall prevent 

the diversion of the trust estate from the uses upon which the 

estate was granted, either by the voluntary or involuntary act 

of the donee. . . . The question is wholly one of construction.”

Sisters of Mercy of Cedar Rapids v. Lightner, 223 Iowa 1049, 1060–61, 274 

N.W. 86, 92–93 (1937) (quoting Mills v. Davison, 35 A. 1072, 1074 (N.J.

1896)).

For example, almost a century ago we considered another case 

involving both Coe College and putative gift restrictions. See generally
7

Lupton v. Leander Clark Coll., 194 Iowa 1008, 187 N.W. 496 (1922). 

Leander Clark gave $50,000 to what was then Western College in Tama, 

requiring that (1) the donation be matched by another $100,000 in gifts, 

(2) the name of the college be changed to Leander Clark College, and (3) the 

whole $150,000 “shall constitute a permanent endowment fund, the 

principal of which shall be protected and forever held sacred as such, and 

no part of it shall ever on any pretense, or in any emergency, be pledged 

or hypothecated for any purpose . . . .” Id. at 1010–11, 187 N.W. at 497–

98. Years later, Leander Clark College was no longer able to support itself 

as an independent educational institution and agreed to merge with and 

transfer the endowment fund to Coe College. Id. at 1012, 187 N.W. at 498. 

A lawsuit followed. Id.

We reasoned as follows:

It is to be observed that the written proposal, in which 

the terms and conditions of the donation were fully stated, 

contains no provision for a forfeiture or reversion of the fund 

to his estate, nor does it provide for any other disposition 

thereof, in the event Leander Clark College should cease to 

exist and function as an institution of learning. Gifts of the 

character in question for the promotion of education come 

within the acknowledged definition of gifts to charity, and the 

first important question in dealing therewith is to ascertain 

the true intention of the donor. This intention must be found 

from the instrument itself, and the facts and circumstances 

surrounding its execution and the making of the gift.

Id. at 1013–14, 187 N.W. at 498–99. Ultimately, we ruled that the 

endowment belonged to Coe College, concluding that

the provision of Leander Clark that the college should bear his 

name was a mere incident to a broader and more generous 

purpose: that of assisting to found and perpetuate a fund, to 

be so invested and managed as to yield an annual income, to 

be used for the better education of young men and women 

who might desire to take advantage of the opportunity offered 

by the maintenance of such an institution as the college in 

question.
8

Id. at 1016, 187 N.W. at 500. We specifically noted the absence of any 

forfeiture or reversion provision in the original gift. Id. at 1013–18, 187 

N.W. at 498–500.

Somewhat analogously, Coe College argues now that the “permanent 

home” language does not restrict the college’s outright ownership of the 

paintings. “Permanent” in its view contrasts with “temporary.” The 

paintings were being given to the college permanently. Coe College notes 

the Eppley Foundation was a sophisticated entity that drafted the gift letter 

itself. It points out that no trust was established, no funds were provided 

to the college to maintain and preserve the paintings, no inalienability 

language was included in the gift letter, and the letter made no provision 

for reversion or other disposition of the paintings if they ceased to be hung 

in the Stewart Memorial Library. Also noteworthy, perhaps, is that for 

forty years the paintings were carried on the college’s books as an 

unrestricted gift. In addition, according to the college, the Eppley 

Foundation’s mission was to support charities through grants and 

donations, not to disseminate art.

On the other hand, the attorney general emphasizes that the same 

sentence in the letter that gave the paintings to Coe College said “that this 

would be their permanent home, hanging on the walls of Stewart Memorial 

Library.” Also, the letter provided detailed specifications for a marble and 

bronze plaque to accompany the gift of the paintings, which included a 

bust of Eppley. Although the paintings have occasionally been loaned to 

other institutions and their precise display location has changed, they 

remain hanging today in the Stewart Memorial Library with the original 

plaque.

Ours is not the first case dealing with gift restrictions on art. In 

Museum of Fine Arts v. Beland, a will had bequeathed several paintings to 
9

a charitable trust, with ownership to “be vested permanently and 

inalienably” therein. 735 N.E.2d 1248, 1250 (Mass. 2000). The will also

directed the trustees to offer the paintings “for purposes of exhibition to 

the Museum of Fine Arts in the City of Boston,” where in fact some were 

displayed and some were kept in storage. Id. Years later, the trust sought 

to sell some of the paintings that were being stored. Id. The 

Massachusetts Supreme Judicial Court held that no such authority 

existed:

An effort to determine Wolcott’s intent by extrinsic evidence is 

unnecessary because the provisions of the bequest are not 

ambiguous. Paragraph 5 of the bequest states: “The 

ownership and control of the pictures shall be vested

permanently and inalienably . . . in [the] Trustees.” The judge 

correctly interpreted the meaning of the words in this 

paragraph by the application of commonly accepted rules. 

Contrary to the trustees’ assertions, the judge did not 

“overlook” a secondary meaning of the term “inalienable.” The 

contention that Wolcott must have intended the word 

“inalienable” to be used in the bequest the same way as the 

word had been used in the Declaration of Independence is not 

persuasive. The judge properly concluded that “the phrase 

‘permanently and inalienably’ in the will means exactly what 

it says—the Trustees are to have permanent possession and 

control of the paintings” (emphasis original). The bequest 

makes clear that the paintings may not be sold by the 

trustees.

Id. at 1251 (footnote omitted) (citations omitted). Although Coe College 

distinguishes the Beland case on the ground that the bequest there used 

the term “inalienably,” the larger point is that the Massachusetts court 

applied some “commonly accepted rules” of interpretation to the words 

used when the gift was made.

A more recent unpublished Massachusetts trial court case involved 

the famed artist Norman Rockwell. Rockwell v. Trs. of the Berkshire 

Museum, No. 1776CV00253, 2017 WL 6940932 (Mass. Super. Ct. Nov. 7, 

2017). In that case, an injunction was sought barring the Berkshire 
10

Museum from selling any of its collection of Rockwell paintings. Id. at *1. 

The court denied relief. Id. at *19. In part, it reasoned as follows:

In 1958 and again in 1966, Norman Rockwell gave certain 

paintings to the Museum without declaring any trust. Shortly 

after Rockwell donated the first painting, he received a letter 

from Stuart Henry, the Museum’s director, accepting the 

paintings and stating that they were to be part of the 

Museum’s “permanent collection.” The Museum has attached 

affidavits, which the Attorney General has not contradicted, 

stating that “permanent collection” is and has long been 

museum parlance for objects accessioned by the museum and 

implies no actual permanency. These affidavits persuade the 

court that the phrase “permanent collection” should be 

accorded this specialized meaning, which would have been 

well-known by Rockwell and second nature to Henry.

Accordingly, Henry’s letter does not support the existence of a 

contemporary declaration by Rockwell that the paintings were 

to stay with the museum forever.

As the parties generally acknowledge, deaccession of 

artwork was not commonplace at the time of either of 

Rockwell’s gifts. To the extent that may bear on the terms of 

a purported trust, it gives the court little reason to believe 

that, by gifting his paintings to the Museum without any 

express restriction, Rockwell nonetheless restricted the 

Museum from deaccessioning his work. If deaccessioning was 

so unheard of that Rockwell would not have thought to have 

restricted the Museum’s right to deaccession his artwork, it 

suggests he did not restrict the Museum’s rights in that 

fashion. On the other hand, if Rockwell and the Museum 

generally understood the possibility of deaccessioning, 

Rockwell’s failure to expressly restrict the Museum from doing 

so suggests that restricting the gifts was not his intent.

Id. at *15 (footnotes omitted) (citation omitted). Arguably, the Rockwell

case supports Coe College’s view that “permanent” does not mean 

“inalienable.” However, the relevant language there was “permanent 

collection,” not “permanent home,” and we have to read words in their 

entire context.

A New York trial court opinion also sheds light on how the terms 

and conditions of art donations are interpreted. In Dennis v. Buffalo Fine 
11

Arts Academy, a museum sought to “deaccession” (or, in common 

parlance, “sell”) certain older works of art to “focus on maintaining a worldrenowned modern and contemporary art museum.” No. 2007–2220, 2007 

WL 840996, at *1 (N.Y. Sup. Ct. Mar. 21, 2007). In rejecting a court 

challenge to this plan, the court found, in part,

The Board is empowered . . . to sell property which was 

donated or bequeathed to the corporation. This power is 

limited by an individual’s right to specifically restrict the 

alienability of an item which he or she donates. Both 

Mr. Foreman and Mr. Michael’s donations do not restrict the 

Board’s right to sell these items. First, there is no evidence 

produced by petitioners that Mr. Foreman himself (i.e., not his 

family), specifically limited the purpose for which the Shiva 

was given. Second, the will of Mr. Michael contains no 

express provision limiting the rights of the Academy to sell his 

donations. This court agrees with a determination by the 

Attorney General’s office, that the will needed to contain an 

explicit perpetual limit on the right to sell the item in order for 

the Board to have violated the donor’s intent.

Id. at *4. Although the court did not restate the precise language that the

two donations involved, it did speak in terms of a “specific[] limit” or “an 

explicit perpetual limit” on resale. Id. Potentially, that analysis favors the 

college’s position here.

In Lord v. Society for the Preservation of New England of Antiquities, 

Inc., the Maine Supreme Judicial Court confronted a will that bequeathed 

a painting to the Society “for use only in the ‘Parson Smith House.’ ” 639 

A.2d 623, 623 (Me. 1994). Some years later, the Society sold the house 

and moved the painting to one of its other historic sites. Id. at 624. The 

Maine court ruled for the Society, reasoning,

The Lords argue that the failure to construe the phrase 

“for use only in the Parson Smith House” as a condition 

results in an unacceptable interpretation of it as surplusage. 

While we recognize that the phrase “for use only in the Parson 

Smith House” demonstrates Mrs. Stephan’s strong preference

that “the Phyllis” remain in the Parson Smith House, we 

cannot say it is sufficient to create a legal obligation that it 

remain in the Parson Smith House.
12

Id. at 625.

The Restatement (Third) of Property addresses the subject of gift 

restrictions and donative intent. It provides, “The controlling 

consideration in determining the meaning of a donative document is the 

donor’s intention. The donor’s intention is given effect to the maximum 

extent allowed by law.” Restatement (Third) of Prop.: Wills & Other 

Donative Transfers § 10.1, at 276 (Am. Law Inst. 2003). The Restatement 

adds, “In seeking to determine the donor’s intention, all relevant evidence, 

whether direct or circumstantial, may be considered, including the text of 

the donative document and relevant extrinsic evidence.” Id. § 10.2, at 278. 

“The text of a donative document must be read in its entirety.” Id. cmt. b, 

at 278.

“Extrinsic evidence of the circumstances surrounding the execution 

of the donative document that might bear on the donor’s intention, directly 

or circumstantially, may always be considered.” Id. cmt. d, at 279–80. 

Furthermore, “[a] significant element of the surrounding circumstances 

may be whether the drafter of the document was a layperson (usually the 

donor) or a person experienced in the use of legal or other specialized 

terminology (usually the donor’s lawyer).” Id. cmt. e, at 280.

Although we have not previously approved these portions of the 

Restatement (Third) of Property, we have applied that Restatement in other 

contexts. See, e.g., DuTrac Cmty. Credit Union v. Radiology Grp. Real 

Estate, L.C., 891 N.W.2d 210, 218–20 (Iowa 2017) (applying Restatement 

(Third) of Property: Servitudes § 7.10 (Am. Law. Inst. 2000)); StewMc Development, Inc. v. Fischer, 770 N.W.2d 839, 847 (Iowa 2009)

(applying Restatement (Third) of Property: Servitudes § 4.1(1)); Gray v. 

Osborn, 739 N.W.2d 855, 861 (Iowa 2007) (applying Restatement (Third) 

of Property: Servitudes § 2.2); Sieh v. Sieh, 713 N.W.2d 194, 197–98 (Iowa 
13

2006) (applying Restatement (Third) of Property: Wills & Other Donative 

Transfers § 9.1(c)), superseded by statute, 2009 Iowa Acts ch. 52, § 4 

(codified at Iowa Code § 633.238 (Supp. 2009)), as recognized in In re 

Estate of Myers, 825 N.W.2d 1, 2 (Iowa 2012). Consistent with the 

Restatement provisions and official comments quoted above, we believe a

heightened emphasis on intent is appropriate when interpreting a gift as 

opposed to a contract or statute. A gift is the product of one actor’s intent, 

not two actors as with a contract or many actors as with a statute.

Our caselaw appears to have followed the Restatement approach. 

“It is a well recognized rule, uniformly followed by all courts that gifts to 

charitable uses and purposes are highly favored in law, and will be most 

liberally construed to make effectual the intended purpose of the donor.” 

In re Small’s Estate, 244 Iowa 1209, 1225, 58 N.W.2d 477, 485 (1953). 

In general, the donor’s intention is to be determined from the 

instrument itself and the attendant circumstances. The terms 

used are not to be measured separately, but each is to be 

considered in its relation to the entire provision, and the general 

meaning of each restricted by its associations, and made 

subordinate to [its] main purpose. . . . To aid in the 

construction, extrinsic evidence of the circumstances is 

usually admissible[.]

Id. at 1228, 58 N.W.2d at 486 (quoting 14 C.J.S. Charities § 11).

Applying those principles here, on our de novo review, we find that 

the Eppley Foundation made a gift subject to the restriction that the 

paintings would remain permanently in the Coe College library.1 To this 

 1The district court found no barrier to temporary loans of the paintings to other 

educational or charitable institutions:

Temporarily removing the Paintings from the Stewart Memorial Library 

and loaning out the Paintings to other educational or charitable 

institutions is not contrary to the donor’s intent. This interpretation both 

allows Coe the opportunity to generate income for the maintenance of the 

Paintings and further its educational mission and is consistent with the 

stated purposes of both the Eppley Foundation and Coe.
14

court, the words “permanent home” mean not merely that the paintings 

would belong permanently to Coe College but that they would be housed 

there permanently. A critical factor is that the same letter gifting the 

paintings also described in detail how Eppley would be recognized along 

with the paintings. Thus, the Eppley Foundation directed that there would 

be a marble and bronze plaque memorial including two bronze plates and 

a bust of Eppley. Four paragraphs in the Eppley Foundation’s 1976 gift 

letter were devoted to the Eppley memorial, only one to the paintings.

The memorial envisioned by the Eppley Foundation in 1976 remains 

there today. It prominently honors Eppley himself while explaining that 

the paintings are a gift to Coe College. We think it is fair to infer that the 

donor intended a symbiotic relationship between the two—the paintings 

and the commemoration of Eppley. Such a relationship depends on the 

paintings remaining at Coe College. The effort to honor Eppley would 

cease to have the same significance without the presence of the Grant 

Wood artwork.2

B. Should Any Restriction Be Modified or Removed Under Iowa 

Code Section 540A.106 or 633A.5102?

1. The Uniform Prudent Management of Institutional Funds Act. Our 

general assembly enacted the Uniform Prudent Management of 

 

The Gift Letter and surrounding circumstances present no 

evidence that the Paintings were to be a financial burden on Coe. Nor is 

there any evidence that the Eppley Foundation intended that the Paintings 

were only to be used as library decorations. If the Eppley Foundation 

intended that the Paintings remain in the library forever, for all time, never 

to be removed, it could have said as much.

No issue is raised on appeal as to this portion of the district court’s order.

2As the district court put it, “The memorial plaque commemorating the gift of the 

Paintings would be useless without the subject paintings present and the text would be 

nonsense in a location other than Coe on account of the language ‘given to Coe College 

by the Eugene C. Eppley Foundation.’ ”
15

Institutional Funds Act (UPMIFA) in 2008. See generally 2008 Iowa Acts

ch. 1066 (codified at Iowa Code ch. 540A (2009)). This is the first time this 

court has been asked to interpret any part of the UPMIFA. The UPMIFA 

provides three options to release or modify restrictions on management, 

investment, or purpose of trusts. Iowa Code § 540A.106 (2017). Option 

one is donor consent. Id. § 540A.106(1). It is inapplicable here because

the Nebraska Secretary of State dissolved the Eppley Foundation in 1977; 

hence, the donor no longer exists. We turn therefore to options two and 

three.

Option two states,

The court, upon application of an institution, may modify a 

restriction contained in a gift instrument regarding the 

management or investment of an institutional fund if the 

restriction has become impracticable or if, because of 

circumstances not anticipated by the donor, the restriction 

will defeat or substantially impair the accomplishment of the 

purposes of the institutional fund. The institution shall notify 

the attorney general of the application, and the attorney 

general shall be given an opportunity to be heard. Any 

modification must be made in accordance with the donor’s 

probable intention.

Id. § 540A.106(2). Option three provides,

If a particular charitable purpose or a restriction contained in 

a gift instrument on the use of an institutional fund becomes 

unlawful, impracticable, or impossible to fulfill, the court, 

upon application of an institution, may modify the purpose of 

the fund or the restriction on the use of the fund in a manner 

consistent with the charitable purposes expressed in the gift 

instrument. The institution shall notify the attorney general 

of the application and the attorney general shall be given the 

opportunity to be heard.

Id. § 540A.106(3).3

 3The common law doctrine of cy pres is mentioned in a separate subsection of the 

UPMIFA: 

This section does not limit the application of the judicial power of cy pres 

or the right of an institution to modify a restriction on the management,
16

As the foregoing language indicates, options two and three are 

available for “institutional funds.” An “institutional fund” is defined as “a 

fund held by an institution exclusively for charitable purposes,” and does 

not include “[p]rogram-related assets,” “fund[s] held for an institution by 

a trustee that is not an institution,” or “fund[s] in which a beneficiary that 

is not an institution has an interest, other than an interest that could arise 

upon violation or failure of the purposes of the fund.” Id. § 540A.102(5). 

A “program-related asset,” on the other hand, is “an asset held by an 

institution primarily to accomplish a charitable purpose of the institution 

and not primarily for investment.” Id. § 540A.102(7).

The attorney general argues that the paintings are program-related 

assets, not an institutional fund. He quotes the following article from the 

website of the Uniform Law Commission:

For example, assume that a donor gave a painting to a 

museum organized as a nonprofit corporation and not as a 

trust. The donor stipulates that the museum must always 

display the painting as part of its collection, that the painting 

cannot travel to other museums, and that the museum cannot 

sell the painting. The painting is a program‐related asset, so 

UPMIFA does not apply to the painting. If the museum needs 

to modify the restriction, perhaps to permit the painting to be 

exhibited by other museums as a way to raise money to care 

for the painting, the museum may be able to use the common 

law doctrine of cy pres to request the modification. The 

museum will not be able to rely on the statutory authority for 

judicial modification provided under UPMIFA. The fact that 

the painting is a program‐related asset does not affect the 

donor restriction, but it may affect the availability of court‐

ordered modification.

UPMIFA Program-Related Assets Article, Uniform Law Commission,

https://www.uniformlaws.org/viewdocument/upmifa-program-related-

 

investment, purpose, or use of a fund as may be permitted under the gift 

instrument or by law.

Iowa Code § 540A.106(7).
17

assets-artic?CommunityKey=043b9067-bc2c-46b7-8436-07c9054064a3 

&tab=librarydocuments (last visited Nov. 6, 2019) (follow “Download” link).

The attorney general’s quotation only goes so far because this case 

involves a college, not an art museum. One thoughtful article maintains

that university art collections can be considered instrumental funds, 

depending on the context. See Linda Sugin, Lifting the Museum’s Burden 

from the Backs of the University: Should the Art Collection Be Treated as 

Part of the Endowment?, 44 New Eng. L. Rev. 541, 557–58 (2010). After 

all, Coe College is an educational institution, and the paintings are kept 

within the college library, not in a separate on-campus art museum.

But even if the Wood paintings were deemed an institutional fund, 

the college would still need to demonstrate that the restriction has become 

impracticable or impossible or, because of circumstances not anticipated 

by the donor, the restriction will defeat or substantially impair the 

accomplishment of the purposes of the institutional fund. See Iowa Code 

§ 540A.106. As we will now see, this overlaps to some extent with what 

the recipient of a charitable gift must prove to invoke cy pres.

2. The common law doctrine of cy pres. The cy pres doctrine refers 

to “[t]he equitable doctrine under which a court reforms a written 

instrument with a gift to charity as closely to the donor’s intention as 

possible, so that the gift does not fail.” Cy Pres, Black’s Law Dictionary 

(11th ed. 2019). The doctrine is “a liberal rule of construction used to 

carry out, not defeat, the [donor’s] intent.” In re Tr. of Rothrock, 452 

N.W.2d 403, 406 (Iowa 1990) (citing Simmons v. Parsons Coll., 256 N.W.2d 

225, 227 (Iowa 1977)). We stated in Simmons,

Cy pres is a doctrine which literally means “as near as 

may be.” It is applicable only to charitable trusts and then 

only when the trust established by a [donor] fails, no 

alternative disposition of the property has been made, and the 
18

general trust purposes may be accomplished by permitting it 

to be administered in a way different from, but closely related 

to, the [donor’s] plan.

256 N.W.2d at 227 (quoting Hodge v. Wellman, 191 Iowa 877, 882, 179 

N.W. 534, 536 (1920)).

Our general assembly codified this doctrine into positive law in 

1999. 1999 Iowa Acts ch. 125, § 86 (originally codified at Iowa Code 

§ 633.5102 (2001)).4 Iowa Code section 633A.5102 (2017), “Application of 

cy pres,” provides,

Unless the terms of the trust provide to the contrary the 

following apply:

1. A charitable trust does not fail, in whole or in part, 

if a particular purpose for which the trust was created 

becomes impracticable, unlawful, or impossible to fulfill.

2. If a particular charitable purpose for which a trust 

was created becomes impracticable, unlawful, or impossible 

to fulfill, the court may modify the terms of the trust or direct 

that the property of the trust be distributed in whole or in part 

in a manner best meeting the settlor’s general charitable 

purposes. If an administrative provision of a charitable trust 

becomes impracticable, unlawful, impossible to fulfill, or 

otherwise impairs the effective administration of the trust, the 

court may modify the provision.

“Unless the statute directs otherwise, we will construe section 633A.5102 

according to the legislature’s intent as aided by our precedent regarding 

the common law doctrine of cy pres.” Kolb, 736 N.W.2d at 555.

“Section 633A.5102 has not changed the basic tripartite test.” Id. 

Unless the trust directs otherwise, we require the following: “(1) a 

charitable trust; (2) a specific trust purpose that is illegal, impractical, or 

impossible; and (3) a general charitable intention by the donor.” Id.

At the outset, we must determine if the explicit terms of the gift letter 

disallow the application of cy pres. Here, the explicit terms of the gift letter 

 4Iowa Code sections 633.1101–.6308 were transferred to chapter 633A in 2005. 

See 2005 Iowa Acts ch. 38, § 54.
19

state that “[t]he Eppley Foundation Board of Directors [has] approved that 

the Grant Wood paintings be given to the Coe College and that this would 

be their permanent home, hanging on the walls of Stewart Memorial 

Library.” There is nothing in this language to indicate that the gift should 

fail in the event that the display of the paintings becomes impracticable, 

unlawful, or impossible. See Georgia O’Keeffe Found. (Museum) v. Fisk 

Univ., 312 S.W.3d 1, 18 (Tenn. Ct. App. 2009) (remanding for the 

application of cy pres and noting the absence of any “express divesting 

clause” in Georgia O’Keeffe’s gift of paintings to Fisk University). 

Furthermore, there is nothing in these terms to indicate that modification 

is prohibited. Thus, the terms of the gift do not bar the application of 

section 633A.5102.

Under the common law, we then ask whether the Eppley Foundation

“anticipated the possible failure of the trust and [if it] has made alternative 

disposition of [its] property to meet that contingency.” Kolb, 736 N.W.2d 

at 555 (quoting Simmons, 256 N.W.2d at 227). If so, the application of cy 

pres is inappropriate. Id. Again, the gift letter does not indicate that the 

Eppley Foundation anticipated the failure of the restricted gift of the 

paintings, and the gift letter did not provide for alternative disposition. 

Accordingly, the doctrine of cy pres is not precluded from application in 

the case before us.

Because we have construed the gift letter to impose restrictions on 

Coe College’s ownership rights in the paintings, the letter may be deemed 

to establish a charitable trust even though it contains no magic trust 

language. See Restatement (Second) of Trusts § 397 cmt. e, at 287 (Am. 

Law Inst. 1959). A trust established to display paintings of a worldrenowned local artist in the library of a nonprofit educational institution

where other artworks by the same artist are displayed demonstrates a 
20

charitable purpose. See Iowa Code § 633A.5101(1) (noting a charitable 

trust may be created for any purpose “beneficial to the community”). Art 

brings beauty to our world, and Grant Wood’s style situated in Midwest 

regionalism and illustrative of rural American themes is perhaps of more 

importance and allure when displayed in the city where he spent much of 

his youth. “Thus, the property was held by [Coe College] for a charitable 

purpose and is a charitable trust.” Kolb, 736 N.W.2d at 556 (quoting In re 

Tr. of Rothrock, 452 N.W.2d at 405).

Next, we must determine if a specific charitable purpose of the 

donated paintings has become impractical, illegal, or impossible. There is 

no claim of illegality; the parties and the district court have focused solely 

on whether honoring the restrictions has become impracticable or 

impossible. As this court has stated, there is “no precise definition of the 

standard” and “whether something has become impossible or 

impracticable is up to the ‘particular facts of each case.’ ” Id. at 556

(quoting Nancy A. McLaughlin, Rethinking the Perpetual Nature of 

Conservation Easements, 29 Harv. Envtl. L. Rev. 421, 465 (2005)). A 

trustee or donee may invoke cy pres despite having caused the 

impossibility or impracticability, id. at 557, but not “merely to serve trustee 

convenience,” Howard Sav. Inst. of Newark v. Peep, 170 A.2d 39, 47–48 

(N.J. 1961).

We are not convinced that implementing the Eppley Foundation’s 

specific charitable purpose of honoring Eppley and dignifying and 

beautifying the Coe campus through the display of the Wood paintings in 

the Stewart Memorial Library has become impossible or impracticable. 

This is not a situation like Kolb where the donated items had to be moved 

because of a “vital and necessary” economic development project. 736 

N.W.2d at 551 (holding that the doctrine of cy pres should be utilized to 
21

allow relocation of memorial gardens and a fountain in favor of a 

substantial economic revitalization project); see also In re Stuart’s Estate, 

46 N.Y.S.2d 911, 915–16 (Sur. Ct. 1944) (finding that cultural changes 

between 1891 and 1944 rendered the requirement that an art collection 

not be exhibited on Sundays impracticable). Coe College has not indicated 

that it presently wants to sell or even relocate any of the paintings.

Furthermore, although Coe has demonstrated that its endowment 

has dropped by $5.4 million due to the reclassification of the paintings as 

a restricted gift, it has not offered proof of actual financial difficulties

resulting therefrom.5 Those facts might well present a different case. Cf. 

Georgia O’Keeffe Found., 312 S.W.3d at 19–20 (remanding for the 

application of cy pres to a private university’s application for permission 

to sell two paintings out of a collection given to it by Georgia O’Keeffe); In 

re Barnes Found., No. 58,788, 2004 WL 2903655, at *17–18 (Pa. Ct. Com. 

Pl. Dec. 13, 2004) (allowing the Barnes Foundation to move its art 

collection to Philadelphia after finding that it could not raise enough 

money through the sale of nongallery assets to keep the collection in its 

existing location and achieve fiscal stability).

To put it another way, the problem here is not that the gift recipient 

no longer wants a portion of the gifted assets and would prefer cash. Cf. 

Beland, 735 N.E.2d at 1251; Rockwell, 2017 WL 6940932, at *2; Dennis,

2007 WL 840996, at *1; In re Barnes Found., 2004 WL 2903655, at *17–

18; Georgia O’Keeffe Found., 312 S.W.3d at 4. Nor is it that the gift has to 

be relocated because of other circumstances. Cf. Kolb, 736 N.W.2d at 551–

 5All we know from the stipulated facts is that “reclassification of the Paintings as 

‘permanently restricted assets’ results in an adverse impact on the value of the College’s 

endowment fund, which in turn adversely impacts the College’s financial position for 

Federal educational institution reporting requirements.”
22

25; Lord, 639 A.2d at 624; In re Barnes Found., 2004 WL 2903655, at *17–

18.

Instead, due to an unanticipated increase in the value of Grant 

Wood’s art, the paintings now are worth millions of dollars and would 

make up seven percent of the college’s endowment, rather than the original 

one percent. While we sympathize with difficulties faced by small private 

colleges in a trying financial environment, it is difficult to see this 

fortuitous increase in the value of an asset as rendering the original 

restrictions impracticable or impossible to meet on the present record. On 

a different and more robust record, lifting the restrictions on alienability 

of some or all the paintings might be an appropriate exercise of cy pres.

V. Conclusion.

For the foregoing reasons, we affirm the judgment of the district 

court.

AFFIRMED.