Viewing page 67 of 95

This transcription has been completed. Contact us with corrections.

COVINGTON & BURLING

Smithsonian Institution
April 18, 1972
Page Ten

Executive Director of the National Conference of Commissioners on Uniform State Laws and principal draftsman of the 1962 Act, explained that the draftsmen intended the 1962 Act to apply only to normal trusts and that they did not even discuss the rules applicable to charitable corporations or perpetual trusts for charities.20/

Under general corporate law, income is defined to include both yield in the private trust sense and realized gains from the disposition of assets.21/ No statute has been found which excludes realized gains from the definition of corporate income. The only controversy in this area relates to whether unrealized appreciation and depreciation in the value of assets should be included in the definition of income. 

The characteristics of the Smithsonian clearly give it the form of a charitable corporation rather than a private charitable trust.22/

The principles of law which govern charitable institutions remain today both "rudimentary and vague."23/ According to one commentator, "the managers of corporate charity are still, at this late date, without adequate guides for conduct."24/ The reason for this state of the law is that the courts, in deciding questions concerning