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Why Protecting Donor Intent is Important

Let’s say that you decide to contribute $100 to a local school that is serving disadvantaged children. You expect your money will go toward purchasing what is necessary to help kids get educated, such as buying books, computer equipment or helping pay teacher salaries. Then you find out that the school superintendent used your $100 […]

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Let’s say that you decide to contribute $100 to a local school that is serving disadvantaged children. You expect your money will go toward purchasing what is necessary to help kids get educated, such as buying books, computer equipment or helping pay teacher salaries.

Then you find out that the school superintendent used your $100 to buy a lovely landscape painting to hang in his office.

That’s an example of violating what is called “donor intent” in the world of philanthropy and charitable giving. Honoring donor intent is essential because not doing so brings several negative consequences, the foremost of that is that future donation will dry up.

Honoring donor intent is simply the right and moral thing to do. It should also be noted that not doing so can result in legal trouble.

A classic example of the above occurred recently when the Attorney General of New York sued a charitable organization operated by the Trump family. One of the items purchased using donated money was for Donald Trump’s painting that cost $10,000. Money also went to pay for champagne and sports memorabilia.

The result was that the state of New York shut down the charity. Furthermore, New York state Judge Saliann Scarpulla slapped a $2 million fine on the Trump charitable organization. Members of the Trump family were also banned from starting up a new charity and were required to take a mandatory course to manage a charitable organization properly.

It must be noted that President Donald Trump and his family called the ruling a politically motivated smear and maintain that they managed their charity correctly. Whatever the case, the Trump case is a high-profile example of what can happen when donor intent is not honored or even perceived not to be celebrated.

The closer scrutiny of donor intent has only recently become an issue of heightened interest. In the past, most charities were simply trusted to spend their funds on what they were supposed to be spending on. But as the number of non-profit groups has increased, more inappropriate allocation of funds has come to light.

This has put a new focus on the need to audit charities and to define where the money is to be spent clearly.

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