Recent Developments

Issues that affect ministers and churches
Court Not Barred by First Amendment’s Religion Clauses in Donor’s Designated Contribution Claim
PAGE 1 of 4Single Page

Key point 10-16.7. Donors may be able to recover designated contributions to a church if their contributions were not applied to the designated purpose, so long as doing so would not implicate religious doctrine.

A Michigan appeals court ruled that the civil courts are not barred by the First Amendment's religion clauses from resolving a donor's claim that the church failed to apply his designated contribution to his designated purpose, so long as religious doctrine was not implicated. The chairman of a church's board of trustees (the "plaintiff") donated more than $41,000 into a restricted fund whose purpose "was to raise money to expand the church and build a fellowship hall." Several years later, the plaintiff sued the church, claiming that the donated funds had not been used to build a fellowship hall, that the funds were used for other purposes without plaintiff's permission, and that the plaintiff unsuccessfully asked for a return of the money numerous times.

The lawsuit claimed that the plaintiff was entitled to a refund of his donation on the basis of several grounds, including conversion, breach of contract, and fraud and misrepresentation.

A trial court dismissed the lawsuit, and the plaintiff appealed. A state appeals court began its opinion by noting:

It is well settled that courts, both federal and state, are severely circumscribed by the First and Fourteenth Amendments to the United States Constitution and … the Michigan Constitution in resolution of disputes between a church and its members… . Jurisdiction over disputes between churches and their members is limited to property rights which can be resolved by application of civil law. A court loses jurisdiction over disputes when resolution requires the court to entertain "questions of religious doctrine or ecclesiastical polity."
Posted: April 18, 2018

Like This Article?

If you enjoyed reading this article, get more like it. Become a Church Law & Tax member today.

Learn more

Already a member? .

View All
from our store
2020 Church & Clergy Tax Guide

2020 Church & Clergy Tax Guide

Find comprehensive help understanding United States tax laws as they relate to pastors and churches.
Talking to Your Congregation About Money

Talking to Your Congregation About Money

Helpful insights on talking about money and encouraging people to become generous givers.
Pastor, Church & Law, Fifth Edition

Pastor, Church & Law, Fifth Edition

Learn which local, state, and federal laws apply to religious organizations.
Charitable Contributions Bulletin Inserts

Charitable Contributions Bulletin Inserts

Help your members give more by answering their charitable giving and tax law questions.

ChurchSalary

ChurchSalary

Let ChurchSalary do the work. Get personalized compensation reports for staff and pastors.