Recent Developments

Issues that affect ministers and churches
Donors Can Sue for Improper Use of Designated Funds

Key point. Donors who make designated contributions to a church may be legally entitled to a return of their contributions if not used for the designated purpose.

A federal district court in Arkansas allowed a group of 185,000 donors to move forward with a class-action lawsuit against a missions agency for allegedly violating its repeated assurance to donors that their designated contributions would be spent “100%” for the designated purposes chosen by the donors. A US-based Christian missionary organization (the “defendant”) worked mostly in Asia. To fulfill its charitable purposes, the defendant solicits donations from donors across the world. Each year more than one million unique donations are made to the defendant from tens of thousands of donors in the United States. The defendant then works with its overseas agents to ensure that the designated money reaches its intended purposes in Asia (the “field”).

To maintain its ability to send sufficient funds to the field, the defendant arranges fundraising pitches in several mediums, including in-person solicitations at churches in the United States, on its own website, and through advertising efforts on social media and in various mailings and radio broadcasts.

Because the needs of the poor in Asia are so many, the defendant allows potential donors to specify for what purpose their field donations will be spent. For instance, donors who give online or in response to catalogs may direct their donations to any of 179 different donation categories. Donors make these designations by either checking boxes on order forms or, if ordering online, by adding the item (which lists the corresponding price) to their shopping cart. At other times, the defendant directly solicits donations for particular items, such as “emergency grams” sent in the wake of natural disasters and advertisements sent around the holidays asking for donations for blankets.

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