Perlman & Perlman - Charitable Pledge

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# What Makes a Charitable Pledge Enforceable?

- Courtney Darts
- April 17, 2024

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Charitable pledges are powerful fundraising tools that enable donors to make meaningful contributions to causes they support over an extended period.  However, if a donor fails to meet their commitment, and their pledge is not legally enforceable, it can have significant repercussions for the charity relying on that pledge to fund a project or program. By taking steps to ensure that their pledge agreements are enforceable under the law, charities can better position themselves to avoid such an outcome.

**What Is a Charitable Pledge?**

A charitable pledge is an agreement between a donor and a charity in which the donor promises to make a future donation or series of donations to the charity. In simple terms, it can be described as a promise to make a gift. Under traditional contract law principles, a promise to make a gift to another does not, by itself, form a contract. To create a _legally binding_ contract between two parties generally requires: (1) a valid offer by one party; (2) an acceptance of the offer by the other party; and (3) adequate consideration on both sides, meaning that each party must receive something, or agree to do (or not do) something, in exchange for entering into the agreement.

So how does a charitable pledge become a legally binding contract?

**Creating a Legally Binding Charitable Pledge Agreement**

As a starting point, a charitable pledge agreement, like any contract, should be in writing. Oral pledges often are not legally enforceable and are more susceptible to misunderstanding.

The written pledge agreement should describe the offer by the donor, the acceptance by the charity, the terms of the pledge, and any conditions. To establish consideration, the agreement should state what the charity will do in exchange for the promised donation. However, a pledge agreement that lacks consideration by the charity may still be enforceable, as discussed below.

The enforceability of a charitable pledge agreement is governed under state law, and thus it varies by the particular state. In general terms, the courts apply one of the following theories when considering the enforceability of a written charitable pledge agreement against a donor.

Bilateral Contract Theory

The donor and the charity create a legally enforceable contract by agreeing that the donor will make a contribution to the charity at some point in the future in exchange for a

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