Charity donors wanting a refund

DemiDee

Is there anyone here who could advise whether it is a legal requirement on a charity or other not for profit organisation to refund donations when requested, if the money is available for the charity to do so? If it is a legal requirement, then is there a time limit on when the donor can request his/her money back from the organisation? Personally, I would never request money back once it had been donated to a cause, but I am wondering if an organisation has is under any obligation to refund should this situation occur.

Many thanks in advance for your time and help.

heretolearn_2

No, a gift is a gift, a donation is a donation. Unless there is some proof that this was originally intended as a loan to be repaid, just say no!

timnicebutdim_2

The only time I've come across this is if the donation is restricted... i.e. restricted funds donated for a specific purpose, which subsequently aren't spent, in which case the donor has the right to request the money back. Not sure though in the case of a general (unrestricted) donation.

DemiDee

I personally think you are right, Heretolearn. However, is it legal to hold onto a donation and refuse to give it back if it has not yet been spent and the fundraising is still in progress?

DemiDee

Tim, we are raising funds to build an orphanage in the Third World - it's been a long process but we've 20% of the funding necessary in just over three months. I guess that the funds raised would thus be classed as restricted and anyone could, theoretically, request their donation back before we manage to raise all the funds for completion.

heretolearn_2

Restricted funds cannot be used for another purpose, but that still doesn't mean people can just change their minds about their donation because you haven't spent it yet. The money now belongs to the charity and I don't see how legally the charity can then just give money out to an individual instead of using for its recognised charitable purposes. The fact that someone in the past gave the charity an amount of money equal to the amount they now want from the charity, is not relevant, AFAIK.

But really, although I deal with a lot of charities as clients, I've never come across this situation so my advice is to contact the Charity Commission for the definitive position.

bris

It could also be argued that the donation was given for a particular cause, if that cause is not going to happen then the donator could be entitled to their donation back.

heretolearn_2

That isn't the case here though - the project is going ahead but is still in the early stages.

timnicebutdim_2

My example previously referred to a project (for specialist equipment) which had stalled and the full amount was never raised and we're talking 1 year+ after the initial donation... In that situation the donor (a trust) quite rightly asked for their money back as we did not fulfill our side of the 'contract' - the conditions of which would have been agreed right from the start due to the large sum of money involved.

In this situation however, three months is nothing for what is a large project so I don't see how they can legally be entitled, unless you specified timescales, conditions etc. If it's a large amount I would seek legal advice and as HeartoLearn says, speak to the Charity Commission. If it's small you may consider it necessary to refund in order to preserve goodwill depending on the circumstances.

DemiDee

Thanks for all the invaluable advice above. I really appreciate it, and I know that the team will too when we discuss this later. We have never specified a time scale, although the sooner the better for the children who need this home. We didn't expect people to ask for their money back, and the good majority haven't, but we're suffering at the hands of one woman who has made it her reason d'etre to destroy the project because she believes we are 'brainwashing the children' on the basis that some of the group happen to be Christians, and the pastor who is overseeing the project in the Third World is a Christian. The irony is that this person was a member of our team and knew all this from the outset, but due to minor disagreement between herself and another two team members, she has launched a vendetta against us, writing to donors, trying to get them to pull out. Most can see through the religious hatred which motivates this relentless and ongoing campaigns, but we are expecting a small number to want out, just for the sake of some peace. What a great shame that something founded on love and wanting to help those less fortunate has attracted such negativity, especially since it is being built in the memory of a loved one. Still, we continue regardless, and as a long-term MSE-er who has found this forum invaluable and extremely friendly, I hope that one day, I can come back here and tell you that we achieved our goal!