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Charitable Contributions for a Specific Purpose

Court rules that donors may sue organization.

• Can a charity that raises funds for a specified purpose be sued by donors if the funds are not spent for that purpose? Yes, concluded a New York court in an important decision. A group of donors to the Jewish National Fund (JNF) alleged that for 20 years the JNF had misrepresented in its advertisements that it allocated donated funds to projects in both Israel and the territories acquired during the Six Day War (including the West Bank and Gaza Strip), when in fact no contributions were ever allocated to the territories. The donors sued the JNF for fraud, misrepresentation, and false advertising, and also sought a court order permanently barring JNF from any further misrepresentations. A trial court awarded the donors part of the relief they requested, and the JNF appealed. A state appeals court ruled that the JNF could be sued by the donors. It began its opinion by noting that no ...

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Posted:
  • March 1, 1991

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