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Liability for Ignoring Donors' Designations

Churches must honor restricted contributions—or else risk refunding them.

Last Reviewed: September 16, 2020
Liability for Ignoring Donors' Designations

It is common for church members to make "designated" or restricted charitable contributions to their church specifying that their contributions be used for a specified purpose. What happens if a church board applies such contributions to some other purpose? Are there legal consequences for either the church or the church board? A recent decision by the Mississippi Supreme Court addresses this question.

The case is significant since it represents the most extended discussion of the legal consequences of expending donor restricted contributions for other purposes. Also significant: The case suggests that donors who make designated contributions to their church may have a legal right to a refund of their contributions if the church fails to use the contributions for the designated purpose.

This Feature Article reviews the facts of the case, explains the court's ruling, and assesses ...

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Posted:
  • June 23, 2015
  • Last Reviewed: September 16, 2020

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