Enforcing Charitable Pledges: Well, You Said You Would Give Them Money. What Did You Expect?

An interesting piece at Wealthmanagement.com about how and why charities seek to enforce charitable pledges and what theories courts use to accommodate their claims. The first two paragraphs are key:

In August, it was widely reported in the media that Duke University had filed a claim against the estate of Aubrey McClendon, the former CEO of Chesapeake Energy Corp., for payment of nearly $10 million in outstanding charitable pledges, once again raising the question of whether and to what extent charitable pledges are legally enforceable.

States typically rely on one of three theories to find that a charitable pledge is enforceable.  A pledge may be enforceable as a bilateral contract, as when a donor pledges a sum of money in exchange for the charity’s naming a building after the donor.1 A second theory treats a charitable pledge as a unilateral contract.  A donor offers to make a gift in the future that’s accepted when the charity incurs a liability in reliance on the offer.2When the charity provides no consideration for a contract, a pledge may be enforceable under the doctrine of promissory estoppel, an equitable remedy applied when a charity would suffer damages if the pledge weren’t enforced.

The rest of the piece is worth a read, especially if you’re interested in how the law is developing or in why charities should care about those developments.

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