Charitable Gifts as Contracts

To put it simply, a charitable gift can be defined as the giving of wealth to a charitable cause. Charitable giving occurs when a donor bequeaths a portion of their assets to a charitable cause, such as a non-profit charitable organization.

A charitable organization is one that exists to help individuals or communities in need by using donations and raising funds to address various needs, based on the mission of the organization.

An example of this would be how a charitable organization may provide food, water, shelter, education, or other necessities to a city’s population facing houselessness. A charitable organization may also provide a specific need based on a donor’s wishes. An example of this would be how a donor may wish to create or donate to a charitable organization providing art supplies and education to the youth in their area.

It is important to note that charitable giving can be done either in life or death, as a person’s estate may continue to donate after the death of the donor. Legally speaking, charitable giving is most commonly distributed through either a will or a charitable trust. Although charitable giving is thought to arise from the compassion, generosity, and benevolence of a donor, it is imperative to note that charitable giving also provides tax breaks for the donor, or the donor’s heirs.

The term trust refers to a legal relationship in which one party, who is known as the trustor or settlor, transfers property into a trust that is managed by a second party, known as a trustee. This is done for the benefit of another party, who is known as the beneficiary. Similar to other trusts, a charitable trust is set up when the donor places some of their assets or property into a trust intended to be donated.

Generally speaking, a charitable trust is managed by a charitable organization. This is set up by the trustor, or otherwise exists to manage trust funds on behalf of the specified beneficiaries. The most notable difference between a charitable trust and other trusts is that a charitable trust is always considered to be irrevocable. What this means is that once a valid charitable trust has been created, the donor may not later revoke the trust or reclaim their property interests in the trust property.

In order to be considered valid and legally binding, the beneficiaries named in the trust must be indefinite. An example of one of the most common charitable trusts would be a charitable remainder trust. Additionally, the charitable trust must be created specifically for the purpose of benefiting the public good.

Some examples of common charitable purposes include, but are not limited to the following:

  1. I Pledged To Make a Charitable Gift, But Have Since Changed My Mind. Will I Be Forced To Pay?
  2. What Else Should I Know About Charitable Giving?
  3. Do I Need An Attorney For Issues Associated With Charitable Gifts As Contracts?

I Pledged To Make a Charitable Gift, But Have Since Changed My Mind. Will I Be Forced To Pay?

Whether or not you will be forced to follow through on a pledge to make a charitable gift depends on a few important factors. When considering the issue, the court will ask the following questions: