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Liability for Ignoring Donors' Designations
Liability for Ignoring Donors' Designations
Churches must honor designated contributions—or else risk refunding them.
"Where a religious society raises a fund by subscription for a particular purpose, it cannot divert the funds to another purpose, and, if it abandons such purpose, the donors may reclaim their contributions."

The court agreed that "civil courts may not second-guess church administrative or management decisions, or substitute their judgment in place of the church's," and therefore the trial court "correctly determined that our courts may not consider whether the church defendants' management or administrative decisions were fiscally irresponsible, or whether those decisions were in the best interests of parishioners."

However, the court concluded that the trial court "erred in dismissing plaintiffs' claims that church defendants improperly diverted designated funds." It explained that "while churches have large, almost-unfettered discretion in their administrative decision-making, they are not entitled to violate recognized duties or standards of conduct."

The Mississippi Supreme Court then explained the "general law of contributions" as follows: "Where a religious society raises a fund by subscription for a particular purpose, it cannot divert the funds to another purpose, and, if it abandons such purpose, the donors may reclaim their contributions." In support of this conclusion the court relied on the following cases:

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