The Iowa Supreme Court issued a ruling on the matter In re Ezra L. Totton Scholarship, an action taken by the University of Iowa to repurpose a scholarship for Black students studying physical sciences to first-generation students. While ultimately blocking the University of Iowa’s proposed modification of distribution of the funds, the Iowa Supreme Court creates important guidelines for educational institutions seeking similar modifications of race-restricted donor funding.

Dr. Ezra L. Totton was a Black professor of chemistry who earned his master’s degree at the University of Iowa. Upon his death, he left a $35,000 bequest to the University for the creation of a scholarship for “Black students majoring in physical sciences, preferably chemistry.” In 2025, the University filed an application to modify the terms of the scholarship, citing concerns about the continued legality of the race-based restriction. The court found that the University’s proposed modification, which would make the funds available to first-generation students studying chemistry, was not reflective of the donor’s intent and, in fact, added a new restriction. The court found nothing in the existing record that would support this intent by the donor, though it did not rule on the possibility that a different record may be able to sufficiently demonstrate the appropriateness of this modification.

The Iowa Supreme Court highlighted the following takeaways:

1. If there is a dispute that goes to court, then an advocate for the donor’s interest must be permitted to participate in proceedings
2. When deciding whether a distribution decision is appropriate, the entire terms of the donor’s will and other extrinsic evidence may be considered
3. Modifications that may be made include the release of a restriction on distribution of funds or a decision that the funds will be given to another institution that can more appropriately honor the donor’s intent

Please see below for more information on each of these.

Donor Intent Takeaways

Any proposed modification to donor funds must demonstrate alignment with donor intent. Simply adding new restrictions that are unrelated to the donor’s original goals are unlikely to be approved. An institution should create a strong record that demonstrates how the proposed modification serves the donor’s original goals. Extrinsic evidence, such as the entirety of the donor’s will, may be considered. Other evidence, such as the gift instrument and the charitable gift history of the donor, would also help bolster a record in support of modification. Educational institutions should also evaluate the original gift instrument to determine if the donor has provided alternatives if their original intent cannot be preserved.

Extrinsic Evidence

The Iowa Supreme Court has permitted an advocate for the donor’s intent to participate in proceedings. Institutions may see involvement not only from the donor’s estate, but from other interested parties, such as local organizations or civil rights groups. If an institution is aware of an interested party, it may be beneficial to pre-emptively collaborate with such groups prior to the filing of a petition.

Allowed Modification

The Iowa Supreme Court determined that modification may include the release of restrictions or the distribution of funds to another institution or organization that is able to more closely fulfill the donor’s intent. An institution should ensure that it is not adding new restrictions in its proposed modification that are not supported by donor intent. Institutions may need to consider whether it is more appropriate to pay the funds to a different organization that can more closely preserve the donor’s original intent.

This alert was co-written by Peter Fagen, Partner, Lauren Rubio, Associate, and Megan Ford, Summer Associate.