A judge sided with B.C.’s attorney general in denying Mulgrave School Foundation’s application to repurpose $1.1 million in donated funds for capital costs when they were meant for scholarships.
In 2011, Mulgrave started a fundraising campaign to expand its campus on Cypress Bowl Lane to include a senior school building. From 2008 and 2010, the independent school received approximately $1.1 million in donations for its scholarship program from four donors.
Although the foundation received the donors' consent to repurpose the funds for offsetting construction costs, B.C. Supreme Court Justice David Masuhara denied the action in his October decision.
Mulgrave School was founded in 1994. Its foundation was incorporated in 2007, achieved charitable status in 2008, and became a public entity in 2009.
Since 2001, the 100,000-square-foot school building has housed classrooms, science labs, gymnasiums, a library and a theatre. Then in 2010, it expanded with its Early Learning Centre facility.
The school then set its eyes on the $23-million senior school project, to include specialist classrooms for grades 10 to 12, a cafeteria, underground parking and counselling centre. Senior school construction would be fully funded by donations through a capital campaign, with a bridging loan to cover construction costs until pledges were realized into cash, according to court documents.
While the project is scheduled to be completed by 2015, the school did not expect to receive sufficient donations to pay off the loan until 2017.
So when the foundation petitioned to redirect the funds from the scholarship program, the B.C. Attorney General's office was opposed because the gifts were given for a discrete purpose — scholarships and bursaries — and not for the school's capital campaign for the construction of new buildings.
Masuhara agreed. In his ruling, the judge stated that although the donors agreed to repurpose the funds, when the money was given to the charity under the Society Act the purpose was for the advancement of education through scholarships.
Masuhara also noted that the foundation did not provide enough evidence to prove there is an "impossibility or impracticability" for the money not to be used for the scholarship program.
Mulgrave's new senior school is expected to open to classes in January 2015.
Note: This story has been modified since first posted.
