In the typical church, fund raising to achieve an objective is not always successful. To raise enough money to build a fellowship hall, or a youth facility, or some other adjunct facility is often started and not finished. If insufficient money is collected to achieve a stated purpose what happens to the money that is collected can be a source of angst. Returning the money may present administrative problems like identifying exactly who gave what because many donations are “anonymous.” Most churches have a church treasurer sworn to secrecy but donations that have to be documented for tax purposes may make anonymity sometimes illusory. Also, most churches do not have clear policies regarding whether donative intent is binding and if it is, for how long. Also, if the money is returned to identified givers, must the money be returned with an IRS form 1099 requiring the church to have or obtain the donor’s social security number?
Rogers v St. John United Methodist Church, Slip Op., (unpublished) (Mich. App. 2017) was the reversal of a trial court’s grant of a Motion to Dismiss. In most jurisdictions, obtaining a dismissal by motion based on the pleadings is problematic at best. Also, at that stage, without discovery or a trial, the factual evidence is often not complete or cannot be considered. However, it seems the donation for a new fellowship hall was probably not enough to build and additional fund raising was apparently not successful or for some other reason leadership decided not to build. After a passage of time, the donors sought a refund. Apparently the donors were sufficiently well identified and the money sufficiently segregated that it was identifiable as to amount.
The opinion of the court, again based on and reversing a trial court’s dismissal founded only on pleadings, was that “resolution of plaintiffs’ claims does not require a court to analyze questions of religious doctrine or ecclesiastical polity” and for that reason the trial court received the case back on remand for further proceedings. In other words, the court was holding donative intent could be determined without considering religious considerations.
The opinion was silent about the law of donations in general, i.e., whether once donated the donor retains any authority over the use of proceeds. The opinion was silent about the bylaws of the church. Often well drafted bylaws clearly state a policy that donative intent is not binding on leadership and that no return of donated funds can occur even if a donative intent cannot be fulfilled. Bylaws often also make donations religious by reciting Scriptural edicts regarding donations.
Thus, the opinion of the appellate court in Rogers should be viewed as provisional and not viewed as a general statement of law. That intent could be determined may have been a projection based on the what the court had before it. As the case proceeds, if it does, that intent may not be so easily determined.