Generally, donation to a charity does not give the donor any legally protected interest in the operations, management or spending of the charity. However, that does not give the charity free reign to issue any inducement to donate that is false or corrupt. Donors must be able to show the amounts given and the economic loss from the gift. Merely being offended or disappointed in the failure to perfectly appreciate or follow donative intent will not state a claim.
In Carrier v Zacharias International Ministries, Opinion and Order (ND GA, 2022), the federal trial court, in part, overruled a motion to dismiss. The case will proceed but no outcome can be predicted at this stage. The Plaintiffs alleged they donated money because they believed the representations that Ravi Zacharias and his company, RZIM, were worthy of trust. However, Plaintiffs alleged Zacharias was a serial sexual predator. Zacharias allegedly invested in two “health spas” at which “nearly two dozen therapists” reported inappropriate sexual behavior by Zacharias. Zacharias allegedly used donated money to pay for silence and compliance. Complaints in writing were made three years before Zacharias died but RZIM allegedly did not investigate the complaints. Zacharias allegedly travelled to speaking engagements accompanied by a spa “therapist” using donated funds. Plaintiffs alleged they would not have donated money if they had been made aware of the facts. Plaintiffs filed a Class Action. The Court held it was barred by the Ecclesiastical Abstention Doctrine from hearing claims that Zacharias or RZIM were engaged in immoral conduct in violation of their spiritual messages. But, the Court held it would hear claims “predicated on misuse-of-funds allegations” because no ecclesiastical inquiry was required and Neutral Principles of Law applied. In addition to “misuse-of-funds” claims, the Court held it would hear claims that Defendants “wrongfully failed to disclose their misuse of donor funds” even though they had “exclusive knowledge” of the alleged misconduct.
While it is nearly impossible for claims by angry donors to obtain a judicial remedy by objecting to management decisions by a charity, using donated funds for personal expenses like settling sexual misconduct claims and funding sexual misconduct might be viable with adequate detailed proof. In the reported case, the Defendant non-profit entity investigated and self-reported the allegations, although allegedly only after many detailed claims were submitted, so the detailed proof might have been made public.