In L.B. Research and Eduction Foundation v. The UCLA Foundation, 130 Cal.App. 4th 171 (June 14, 2005), the Court of Appeal held that an agreement between L.B. Research and Education Foundation ("Donor") and The UCLA Foundation ("Charity") created a contract subject to a condition subsequent (rather than a charitable trust) and that Donor had standing to sue to enforce the terms of the agreement.
The Court noted that a gift may have a charitable trust and yet not constitute a charitable trust. In the case in which an owner of property intends to transfer it to another on the condition that if the latter should fail to perform a specified act, the transferee’s interest shall be forfeited either to the transferor or to a designated third party, the interest of the transferee is subject to a condition subsequent and is not held in trust. Whether a trust or a condition is created depends upon the manifested intention of the transferor. The critical inquiry is whether (1) the donor intended to provide that if the property were not used for the designated charitable purposes it should revert either to the donor’s estate or to a contingent donee, or (2) the donor intended to impose an enforceable obligation on the donees to devote it to those purposes.
In dicta, the Court further stated that even if it had concluded that the agreement created a charitable trust, it would have reversed the lower court’s decision on the ground that the Attorney General’s power to enforce charitable trusts does not in this type of case deprive the donor of standing to enforce the terms of the trust it created.