Are Designated Gifts Enforceable?
Church | May 27, 2014
(Church Corner Article)
(Published in the Spring/Summer of 2007 Newsletter)
Generally speaking, designated gifts to a church or similar organization (such as “to missions” or to “building project,” etc.) are not enforceable by the person making the gift (i.e., the donor). Unless the donor has placed specific restrictions on the gift, such as retaining the right to have the gift returned if the organization is no longer in a position to honor the gift (i.e., the building project is cancelled), the donor cannot enforce his gift designation. However, other parties such as the State Attorney General’s office or a trustee, if involved, may enforce the gift. Beside the possibility of enforcement, the church may want to honor gift designations to avoid the appearance of unethical behavior. When large projects are abandoned, carefully consider how the gifts received for the project will be handled. Returning the money to the known donors is an option and one that may result in their need to file amended tax returns. Holding a church meeting to discuss the disposition of the unidentified donor gifts may be proper also. You may find that both identified and unidentified donors may simply choose to transfer the gifts to the general fund.
NOTE: The contents of this Newsletter are not intended to be, nor should they be taken as, specific legal advice as each situation is different. Please contact a lawyer with any questions you may have.
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