Lexington organization alleges hostile takeover of Eastern KY charitable fund
The organizers of an Eastern Kentucky charitable fund are under fire for allegedly hijacking control of the organization away from the Lexington-based nonprofit that owns it shortly after the death of its wealthy founder last year.
An ongoing dispute over management of the Magoffin County Community Foundation spilled into federal court last week. Lexington’s Blue Grass Community Foundation filed suit against the Magoffin County group and its chairwoman Nov. 17, claiming local county organizers are infringing on its trademark, stealing donors and abandoning fiduciary duties to act in the best interest of the original fund.
Control of the foundation could determine the fate of millions of dollars a wealthy, former Magoffin County resident left in his will.
The Magoffin County Community Foundation grants scholarships to high school seniors and runs an annual community day to help prop up the area’s nonprofit food banks, emergency responders and after-school programs, among other organizations. Recently, it helped fund the construction of a new Magoffin County Career and Tech Center.
Donna Salyer, president of the Salyersville National Bank, incorporated a new nonprofit called the Magoffin County Community Foundation Inc. in August, according to state public records. But an organization going by that name already exists, according to the Blue Grass foundation legal filing, and, until recently, Salyer also served on its board of directors.
The original fund was set up more than 23 years ago by Scotty Patrick, a wealthy retiree who was born and raised in Magoffin County. Patrick partnered with BGCF to handle the legal, administrative and financial requirements associated with creating a charitable organization, he wrote in a 2022 blog post on the Lexington foundation’s website.
Patrick died in 2024, and now Salyer, the executor of his estate, is attempting to wrestle away control of the affiliate fund and redirect money from Patrick’s estate to the new fund she has created, according to the lawsuit.
“It appears that Salyer, who exercises control over the New Foundation, intended and intends to divert estate assets or other donations from their intended recipients and to utilize the goodwill of the Affiliate Fund in the Magoffin County community for her own profit and for that of the New Foundation,” the lawsuit reads.
The new, identically named foundation Salyer incorporated this summer is intended to “improve the lives of the citizens of Magoffin County through education, support for local initiatives, and relief for local disasters.” The new fund has the “same objective” as the original BGCF fund, and Salyer established it without BGCF’s knowledge or consent, according to the suit.
The new foundation’s articles of incorporation list its mailing address as the bank where Salyer works.
BGCF claims Salyer has attempted to bring the proceeds of one investment fund under the control of the estate, even though BGCF is the designated beneficiary. In August, she secured a Magoffin County District Court order to pay the proceeds of a $3 million Fidelity brokerage account to the estate telling the court the BGCF-endowed fund Patrick set up in the name of his late parents does not exist, according to court records the Herald-Leader obtained.
“Such a fund does exist, and Salyer knows that it exists,” the lawsuit reads.
Salyer did not respond to multiple Herald-Leader requests for comment.
The original foundation has been a staple part of the Salyersville community, helping put hundreds of local students through college and raising more than $1 million for local nonprofits, Magoffin County Judge-Executive Matt Wireman said. The foundation organizes an annual community day that steers donors to unique county needs and matches their donations, he added.
When an EF-3 tornado packing winds in excess of 160 mph tore through Salyersville in 2012, the community foundation played an instrumental role in helping fund reconstruction efforts and rejuvenate the city’s spirit, Wireman said.
“The foundation has been really good to our volunteer fire departments and all of the local nonprofits,” he said.
He said he was not aware of a fight over the foundation’s control. Members of the new foundation’s board of directors could not be reached for comment.
A lawyer for BGCF said the foundation’s policy “is not to comment on pending litigation.”
BGCF helps establish and manage the assets of charitable funds in the greater Lexington area and Eastern Kentucky. The organization helps establish local advisory boards and assists them in awarding grants and funding projects that meet the needs of their communities, according to the foundation website.
But the advisory boards typically “exercise significant power and discretion over the distributions of money from each fund,” according to the lawsuit.
This story was originally published November 25, 2025 at 5:00 AM.
