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Judge: Shelter can borrow against trust

By Vic Ryckaert
vic.ryckaert@indystar.com vic.ryckaert@indystar.com
October 15, 2004

A Marion County judge ruled Thursday that the Humane Society of Indianapolis can borrow against one of its trust funds to avoid going broke.

Marion County probate Judge Charles Deiter gave the Humane Society permission to use the $3.4 million Mary Powell Crume Benevolent Public Trust as collateral for a $1.7 million loan. The Indiana attorney general's office agreed to the loan.

Humane Society Executive Director Martha Boden said the loan would keep the group operating until 2006. By that time, Humane Society officials say, they will have balanced their budget.

"Right now, our funding does not match our expenses," Boden said. "By using the trust as collateral for a line of credit, we can continue providing those essential services to animals."

Deiter's ruling gives the Humane Society permission to violate terms of Crume's will, which states that the money is not to be used for "buildings, equipment, salaries or any expenses other than the relief of animals."

Several animal welfare organizations -- Spay-Neuter Services of Indiana, Alliance for Responsible Pet Ownership, Home for Friendless Animals, Southside Animal Shelter and Move to Act -- as well as Crume descendant Norma Jean Balcom have opposed using the trust as collateral.

Deiter ruled last month that the organizations had no right to file legal action opposing the move. Representatives for those groups are appealing the judge's decision to shut them out.

Their attorney, Veronica Jarnagin, said the society's board has mismanaged funds and wants to use trust money in ways the benefactor never intended.

"I think they are inept," Jarnagin said, noting the organization has depleted $13 million in assets within the past five years.

Other organizations could take the Humane Society's place and better use the trust's funds, Jarnagin said.

Humane Society leaders blame a weak stock market and a drop in giving after the economic downturn for their money troubles.

Boden said the Humane Society is eight months into a three-year plan to turn around the group's financial difficulties.

"We are on plan or ahead of plan in every way," Boden said. "The solution defined by the leadership team of the Humane Society is clearly working."

When Crume wrote her will in 1921, the Indianapolis Humane Society -- which later became the Humane Society of Indianapolis -- was the only organization in town that cared for animals. Crume died in the 1930s, and the fund was set up in 1940.

Crume's will names the Humane Society as both trustee and beneficiary of the trust. Jarnagin said a neutral party acting as trustee would not allow this loan.

"We don't think any income beneficiary of a public charitable trust should be allowed to use it for their own credit card," Jarnagin said.

Call Star reporter Vic Ryckaert at (317) 444-2750.

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