The Do’s And Don’ts Of Charitable Pledge Donations

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By Gerry W. Beyer

Charities have become experts in how to extract maximum donations from donors including the use of big events at which individuals stand up and publicly pledge their donation. But what happens when that big pledge is never carried through by the donor? State laws vary, but the most important concepts are consideration and reliance with a healthy dollop of public policy on the side.

Courts will first look to see if the charity relied on the promise, by starting a project usually, or if other donors made their contribution based on the promise of the initial amount. Public policy is often cited by judges when they uphold unpaid verbal pledges to the extant that charities must be protected to avoid false donors popping up just to get a moment in the philanthropic spotlight. When planning an estate, always ask the client if they have pledged any amount because the last thing the heirs will want is an irate charity trying to claim their slice of the pie.

Conrad Teitell,The Law of Charitable Pledges, Wealth Management, May 22, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.