How Religious Institutions Manipulate Charitable Giving

C.S. Lewis lamented the use of hyperbole and superlatives like “awesome”, “most magnificent”, and “greatest ever” being used in ordinary discourse because it leaves no elevated terms remaining to use when the elevated term would actually be appropriate.

That came to mind recently when I concluded that nauseating is the appropriate term to describe the difference between donors and recipients of large charitable contributions in the United States today (especially religious institutions).

Often, when making pitches for donations, religious institutions will invoke the prospect of heavenly rewards and including messaging that conveniently argues that giving money to them constitutes “doing the right thing.” The campaigns are conducted in the most moral terms you can imagine, with consultants and advertising employees often hired to help craft letters that use the most effective words and craftsmenship that induce wealthy individuals to make gifts and bequests.

The nauseating part is that, after making such a highly moral request, these same institutions raise highly legalistic shields when any wealthy patron requests that they, as the recipient of funds, do the right thing.

In the 1990s, there were some high-profile cases that involved large donors that fell on hard times and requested a portion of their donation back (i.e. a Texas oil tycoon that donated $25 million to his church, lost his oil fortune, and requested $500,000 of his donation back to get a new business venture started again, only to be turned down on the grounds that the church was not required to do so even though approximately $10 million of the funds had not yet been spent.)

Nowadays, perhaps due to a rising belief that the American is ruthless, many wealthy individuals choose to delay gifts during life and instead donate to charities via a bequest in their will or through a revocable trust. Often times, these donations contain express terms requiring that the recipient agree to spend the funds on certain activities in order to receive the donation.

These institutions, having grown savvy that express terms are rarely enforced because donors don’t want to sue the organizations they value so much that the plan to give free money to or because they anticipate no one will be around to verify the expenditures after the donor’s death, have increasingly disregarded express terms of a donation and used them for whatever purpose they see fit because of the lack of oversight (proving the old adage that where there is no overseer, you will there find corruption).

In other instances, religious institutions have sought recommendations from donors in ways that are not legally binding but may make the donor think they are. In nearly every U.S. state, the rule governing restrictions or required uses for donations include the requirement that the restriction be written in the donation instrument itself and contain “clear and conspicuous” language that at the time of the conveyance that it can only be used for a specific purpose.

As a result, many religious institutions sidestep donors that would have specific requests by getting them to state their express wish orally, in a separate document stating the request at a later date (making it non-binding since it is not contemporaneous with the gift), or by getting the donor to sign a form that says “I hope” or “I wish” that the funds will be used for a certain purpose (which are ambiguous enough to not meet the “clear and conspicuous” standard and are thus non-binding).

It is morally vexatious that, upon contemplation of a donation with specific directions, the recipients view the directions as an obstacle to legally thwart rather than bending over to comply with the directions out of a sense of stewardship and moral obligation beyond what the law requires.

If you are contemplating making a large donation to an institution during the Christmas, I would review that charity’s history of disputes with donors. It can often reveal insights into the character of the individuals managing the organization that provides a more accurate insight into their natures than the accommodating sugary niceties that you see when the marketing team tries to induce your donation. That is why it is much better to mete out donations in revocable installments–it incentivizes better behavior from the recipient.






Originally posted 2017-12-18 01:20:30.

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