Background
Ezra L. Totton, a distinguished Black professor of chemistry, had been denied admission to the University of Tennessee’s graduate chemistry program in 1939 under a Tennessee law that made it a misdemeanor for schools to permit white and Black students to attend classes together. After serving in a segregated Army unit during World War II, Totton was admitted to the University of Iowa, where he earned a master’s degree in chemistry before going on to complete a doctorate and postdoctoral studies and to chair the chemistry department at North Carolina Central University for twenty-six years. In 1997, the year after his death, the University received $35,000 from his estate to establish a scholarship “for Black students majoring in the physical sciences, preferably chemistry.” The endowment had grown to approximately $58,015 by the time of this litigation.
In June 2023, the United States Supreme Court decided Students for Fair Admissions, Inc. v. President & Fellows of Harvard College (SFFA), 600 U.S. 181 (2023), holding that race-based university admissions programs violated the Equal Protection Clause and Title VI of the Civil Rights Act of 1964. Concluding that SFFA raised serious doubts about its ability to administer the Totton Scholarship as written, the University of Iowa — represented by the Attorney General — filed an action in January 2025 under Iowa Code § 540A.106(3), the Uniform Prudent Management of Institutional Funds Act (UPMIFA), seeking court approval to modify the gift by replacing “Black students” with “first generation students.”
The district court dismissed the petition without prejudice twice, concluding that no authority had “conclusively determined” that SFFA applied to privately donated institutional scholarship gifts. The University appealed. On appeal, the Iowa Supreme Court invited the NAACP Iowa-Nebraska Conference and the ACLU of Iowa to appear jointly as amici; both opposed the University’s proposed modification while conceding the scholarship’s race-based restriction had become impracticable.
The Court’s Holding
The Iowa Supreme Court (5–2 on the scope of the opinion) reversed and remanded. Writing for a five-justice majority, Justice Mansfield first held that the district court applied the wrong standard. Iowa Code § 540A.106(3) authorizes modification when a gift restriction becomes “unlawful, impracticable, or impossible to fulfill.” The standard is impracticability, not conclusive proof of illegality. Reviewing post-SFFA authority — including a Wisconsin appellate decision striking down a state-funded race-based scholarship program, a federal district court allowing a 42 U.S.C. § 1981 challenge to the ABA’s race-limited law-school scholarship to proceed, and a December 2025 U.S. Department of Justice Office of Legal Counsel memorandum concluding that federally funded race-limited scholarships violate Title VI — the court concluded that the Totton Scholarship’s race-based restriction is at least impracticable because the University faces material litigation risk in continuing to administer it. Dismissal was error.
The court then declined to approve the University’s proposed modification. UPMIFA requires any modification to be “consistent with the charitable purposes expressed in the gift instrument.” Iowa Code § 540A.106(3). Nothing in the record supported the conclusion that Dr. Totton would have wanted his bequest redirected to first-generation students as a fallback. Dr. Totton’s will contemplated returning the funds if the gift’s terms could not be met; his purpose was rooted in his direct experience with de jure racial segregation, not a broader goal of expanding access for economically disadvantaged students generally.
The majority offered three points of guidance on remand: (1) the district court should allow an advocate for donor intent to participate, given that the Attorney General both represents the University and holds statutory responsibility to protect charitable trust purposes; (2) the entire will and relevant extrinsic evidence of Dr. Totton’s life and intentions may be considered; and (3) permissible modifications under UPMIFA include releasing the restriction entirely or ordering the funds paid to another institution. Justice McDonald, joined by Justice May, concurred only in the result. He would have remanded on the impracticability holding alone, criticizing the majority’s guidance as addressing issues not properly before the court on this record and as relying on extra-record material in the amicus appendix to which the University had not been able to respond.
Key Takeaways
- Under Iowa Code § 540A.106(3) (UPMIFA), a race-based restriction on an institutional gift becomes “impracticable” — and thus subject to modification — when the administering institution faces material litigation risk under SFFA and subsequent authorities, even before any court has conclusively held such restrictions unlawful in the scholarship context.
- A proposed modification must be consistent with the donor’s actual charitable purposes as reflected in the gift instrument and extrinsic evidence; substituting a proxy characteristic (first-generation status) for the restricted class (Black students) is not presumptively appropriate without record support for the inference that the donor would have so intended.
- When the Attorney General represents both the institution seeking modification and the public’s interest in the charitable trust, the district court must ensure that an independent advocate for donor intent participates in the proceeding on remand.
Why It Matters
In re Totton Scholarship is the first Iowa Supreme Court decision applying UPMIFA’s gift-modification standard in the post-SFFA landscape. Its central holding — that impracticability, not conclusive illegality, is the operative threshold — clears the path for Iowa colleges and universities to seek judicial modification of race-restricted gift instruments without first waiting for a court to declare such restrictions flatly illegal. Institutions that have been deferring action on similar bequests should consult this opinion carefully about when to file and what record they need to build.
The decision is equally important for gift planners, nonprofits, and estate practitioners. The majority’s insistence that any modification track what the particular donor would have wanted — evidenced by the whole will and extrinsic history, not just the restricted-gift paragraph — forecloses generic substitutions that serve the institution’s current priorities rather than the donor’s intent. UPMIFA proceedings in Iowa will require a developed evidentiary record on donor intent, and the court’s guidance about appointment of an independent advocate for the donor signals that future proceedings will need to look beyond the institution-attorney-general axis that has historically dominated cy pres litigation.