Client Alert: Endowment Fund Guidance, Deadline Extension and Other Relief for Massachusetts Charities and Non-Profit Organizations

By: Eric W. DyerAnita S. Lichtblau and Sharon C. Lincoln

The Massachusetts Attorney General’s Office, Non-Profit Organizations/Public Charities Division (the “Division”) has recently released timely and helpful guidance for nonprofit organizations. On April 28, 2020, the Division issued guidance for charities on utilizing endowment funds titled, “Attorney General Guidance on Endowments for Charities Facing Financial Challenges Due to COVID-19”(“Endowment Guidance”). The Division has also extended deadlines and provided other relief specific to nonprofit organizations.

A link to the Division’s April 28 “Endowment Guidance” can be found 
here. A link to the Division’s “Annual Charities Filings” webpage can be found here.

Endowment Funds

The Division’s Endowment Guidance first and foremost encourages charities and non-profit organizations to consider alternatives before looking to their endowment funds for additional financial support during the current crisis. The guidance suggests that charities first look to alternative sources of funding, such as relief through state and federal sources and mentions the Coronavirus Aid, Relief and Economic Security Act (CARES Act) in particular (A recent client alert on the CARES Act can be found here). Charities are also advised to seek other grant funding options through private foundations, and financing/refinancing options through commercial banks, among other options, before turning to their endowments as a source of emergency funding.

If other funding sources are not adequate to address the organization’s needs, the Division encourages charities to seek non-judicial remedies before moving for a judicial remedy.  Examples of non-judicial remedies in the guidance include contacting donors for consent to release donor-restricted funds, endowment spending adjustments, and administrative modifications of small and old funds (i.e., those funds with less than $75,000 and that are 20 years or older). But if non-judicial remedies are unavailable, then the Division directs organizations to pursue court approval to access donor-restricted endowment funds.  

In connection with seeking court approval, the Division makes it clear that irrespective of the current economic crisis, “emergency access to endowment funds does not abrogate the requirement that such action be sanctioned by the appropriate court.” Such court approval is required in connection with an outright distribution from an endowment (i.e., exceeding the permissible annual spending amount) and in connection with borrowing from an endowment.  

The Endowment Guidance also reminds charities that the Division is a necessary party to such actions. As such, the Division will be looking for specific information from organizations seeking this relief, including “a description of the circumstances that led to the current financial situation and steps taken to ameliorate the finance crisis, including reference to any alternative explored,” as well as “assurances that outline a business plan for repayment and viability post-COVID-19 crisis,” in addition to other information.  

Compliance Update

The Division’s Compliance Update provides for several key changes to assist non-profit organizations during the COVID-19 pandemic. These changes impact annual filings, registration, dissolutions, proposed transfers of assets and probate notices.  

Annual Filings: The Division extended annual filings (Form PC)  by six months for fiscal year 2019 for charities, which is in addition to the automatic six-month extension already available to charities. In addition, checks will no longer be accepted for payment of annual filing fees; instead, filers must complete online payments through the Division’s weblink:

Note that these new deadlines are more generous than the extended deadlines provided to fiscal year tax-exempt organizations in IRS Notice 2020-23, which can be found here. In this guidance, the IRS extended until July 15, 2020, the filing or payment deadlines that otherwise would have been due between April 1, 2020 and July 15, 2020 for IRS forms and returns specific to tax-exempt organizations, including:  Form 990 series, Form 990-T, Form 990-PF, Form 4720, and Form 990-W.

Registrations: Original signatures, photocopies of signatures and e-signatures (e.g., Docusign) are all now acceptable for registration and annual report forms, with the exception of Forms 11A, 11B and Form 9 Surety Bond. Further, all initial charity registrations must be submitted via e-mail to, and payment options will be communicated directly to initial registrants by a Charities Specialist following a review of the registration materials.

Dissolutions/ Transfer of Assets: A courtesy copy of dissolution documents, including dissolution petitions, should be sent via e-mail to Likewise, all notices of proposed transfer of charitable assets must be e-mailed to the same e-mail address.

Probate Notice: Probate notices and related materials must be sent to

If you have any questions about this alert or other nonprofit issues, please contact one of our nonprofit attorneys: Eric W. Dyer (, Anita S. Lichtblau ( or Sharon C. Lincoln (

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