Endowment of a scholarship is admirable, but administration becomes a burden when inflation sees costs exceeding promised benefits. Terms last century of the Joe Raynes Scholarship were tightly drawn, with trustees not allowed to draw down capital or to wind up the scholarship. Court approval was needed to unravel the problem.
On his death in 1937, the will of successful Dargaville hotelier Joe Raynes directed that 1500 pounds be set aside, to fund scholarships for students at University of Auckland’s Elam School of Art. The trust specified scholarships were to be funded out of income only, the capital was not to be touched.
Nearly ninety years on, the High Court was told investment income earned on the capital no longer covers administrative costs. No scholarship has been granted since 2018. In the prior six years, three scholarships only were awarded; at $1500 each.
Scholarship trustees asked the High Court use Charitable Trusts Act powers to revise terms of Mr Raynes’ will. It was impracticable otherwise for the scholarship to continue.
Justice Robinson ordered that scholarship assets be transferred to the University of Auckland Foundation, with Foundation trustees given authority to draw down on capital to finance future Elam scholarships.
In effect, this ruling wound up the original Raynes’ charitable testamentary trust. The University Foundation now bears administrative costs for the Joe Raynes Scholarships. The scholarship fund will likely be run down progressively through granting of future scholarships.
The Foundation currently manages assets in excess of $250 million.
re Joe Raynes Scholarship – High Court (5.03.25)
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