Editor’s note: This story has been updated with additional information about damages sought in the lawsuit.

It’s likely that Gordon Peterson would not only be turning over in his grave, if that were possible, but also tsking angrily and oozing disappointment about what’s happening 20 years after the late real estate investor opened a donor-advised fund with a faith-based foundation in Colorado Springs that allocates clients’ money to advance Christian causes.

His son, Philip G. Peterson, a resident of Mission Hills, Kan., who says he became the sole successor advisor to the Peterson Family Stewardship Fund when matriarch Ruth Peterson died in 2021, claims in a lawsuit he filed Jan. 15 in federal district court in Denver that since early 2024 he has been cut off from all communication with the donor advisor group, Christian Community Foundation. From its headquarters on the far north side of Colorado Springs, the organization does business as WaterStone.

Furthermore, Peterson alleges, WaterStone has revoked all of his access to information about his family’s charitable account, which as of 2023 had a balance of more than $21 million.

Since then, WaterStone has failed to process Peterson’s grant recommendations and issue philanthropic disbursements from his family’s fund, according to the legal complaint.

A Gazette request to WaterStone seeking comments was not answered. No documents from WaterStone as the defendant, have been submitted to date in court filings.

Peterson has no idea what’s going on with WaterStone, said his attorney, Andrew Nussbaum of First & Fourteenth PLLC of Colorado Springs.

“They simply said, ‘We owe you no duties, and we don’t have to talk to you and give you access to the fund’s performance,’” Nussbaum said. “My client asked for the original 2005 contract, and they wouldn’t give him that. We’re talking about advisory rights.”

Peterson surmised in a phone interview Tuesday that the relationship veered south in the second half of 2023 when WaterStone told him they wanted to change the way the account was funded, and Peterson said he disagreed with some of the terms.

“When I sought answers, WaterStone’s CEO told me never to contact them again,” Peterson said. “My father would be so upset and extremely disappointed. He had clear giving intentions, and they’ve been completely betrayed.”

Peterson said he spent 18 months trying to resolve the problem on his own, individually contacting staff and then each board member. No board members replied, he said.

Donor-advised funds are special, tax-advantaged giving plans, in which nonprofit organizations or foundations accept what are often large donations and manage the philanthropic dollars with guaranteed advisory rights for how those donations will be spent, said Nussbaum, who specializes in religious rights cases.

WaterStone advises $2 billion in assets for clients and allots $4.6 million weekly in grants, according to its website. Among listed board members is Demi-Leigh Tebow, who holds the title of Miss Universe 2017 and is an anti-trafficking advocate and author who is married to former National Football League quarterback Tim Tebow.

Regarding the Peterson fund, “every time the advisors to the fund would make a recommendation, WaterStone would accept the recommendation and send out the money like they represented they would,” Nussbaum said.

Until they simply stopped the process in 2024 when Peterson recommended that $1 million from his family’s fund be granted to Operation Mobilization, a global Christian missionary organization that the fund had supported for years.

The year 2024 marked the first time in the fund’s history that no grants were made to any charity.

The lawsuit is unusual and has precedent-setting potential, Nussbaum said.

“If they (WaterStone) are right, this has huge implications to individuals who give to these donor rights funds,” he said. “It would be a radical precedent that would send shock waves through a very large and largely unregulated industry. It presents real questions of consumer protection and representation in the marketplace.”

And, Nussbaum said, “There’s almost no case law involving what rights a donor-advised fund owes to the advisors of the fund.”

A few cases involving donors suing donor-advised funds exist, he said.

“But none present the stark facts as here, where a duly appointed donor advisor like Philip Peterson is being told he has no rights vis-a-vis the fund,” Nussbaum said. “It’s a first in the donor-advised fund world.”

In 2022, donor-advised funds held $251.52 billion in assets nationwide, according to funds tracked in the 2024 report of the National Philanthropic Trust. That reflected a 10% increase over 2021. The funds collectively distributed $54.77 billion in grants, which was a 1.4% decrease over 2021’s $55.53 billion, the report stated.

On its website, WaterStone says its work operates along the lines of “a charitable bank account,” as it handles disbursements of grants consistent with donors’ wishes and provides “excellence in personalized charitable giving services.”

The Peterson Family Stewardship Fund was designed to reflect Gordon Peterson’s lifelong devotion to the evangelical efforts of many organizations, his son Philip said. The fund through WaterStone has disbursed up to $1.87 million annually to organizations such as Operation Mobilization, Child Evangelism Fellowship and “other ministries dedicated to Scripture translation, evangelism and discipleship,” Peterson said.

He’s not seeking damages, just lawyer fees, through the legal action but said he would like for WaterStone to declare that he holds advisory privileges, abide by his father’s stipulations for grant-making, provide records and other documentation, and allow him to move his father’s money to a different organization that would carry out his father’s intentions to regularly distribute money to evangelical organizations that spread the love of Jesus Christ and other Gospel messages.

“We have some concern that given the size of the fund, WaterStone is unwilling to let Philip Peterson transfer it,” Nussbaum said.

Peterson said he wants to find an organization that he can trust.

“This is my dad’s donor-advised fund – it’s not mine,” he said. “My role is to direct this money to organizations my father wanted to support and had supported for years in amounts he wanted.”