When Charitable Gifts Soar Above Twin Towers: A Federal Income Tax Solution to the Problem of Publicly Solicited Surplus Donations Raised for a Designated Charitable Purpose
73 Pages Posted: 18 Nov 2005
Following the events of September 11, charitable donees received an unprecedented level of donations made in response to appeals for funds to aid the victims of the terrorist attacks against the United States. Some charities received more money than they believed necessary for accomplishing the charitable purpose for which gifts were restricted. Although the charitable response to September 11 is an extreme case, the receipt by charities of surplus funds arising from public solicitations for gifts for a designated charitable purpose is not uncommon. The legal implications of such surplus funds are many. The doctrine of cy pres applies awkwardly to surplus gifts raised through mass solicitations, and the doctrine is further complicated by federal income tax laws governing charitable gifts and charitable organizations. Existing law leaves many questions unanswered. Contemporary proposals to reform the doctrine of cy pres are inadequate. This Article advances an original solution to the problem of publicly solicited surplus funds restricted for a designated purpose. The author proposes an amendment to federal statutory law which would promote the disclosure of important information by charitable donees to donors and facilitate extra-judicial resolution of the problem of disposing of surplus, restricted gifts to charity.
Keywords: charitable contribution, charitable gift, section 170, charitable contributions deduction, charitable contribution deduction, 9/11, surplus funds, surplus donations, surplus contributions, oversubscribed, restricted gift, restricted contribution, restricted donation, donor restriction, Twin Towers
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