The Museum of Contemporary Art recently announced it was suing Paul Oliver-Hoffmann, a prominent Chicago real estate developer and former MCA board chairman, for his failure to honor a $5 million fundraising pledge.
This isn’t the first time a charitable organization has taken a delinquent donor to court, and it probably won’t be the last.
How many trustees of non-profit organizations have been challenged in the heat of a fundraising campaign to match a pledge from one of their colleagues, only to have the would-be benefactor fade into the woodwork? More often than not, the charity is left holding the bag.
Previous court rulings in cases like this suggest the MCA would have a better chance of collecting from Oliver-Hoffmann if he were dead. Case in point: A donor in Orange County, Calif., made a $1 million pledge to a performing arts center to be built in his name at the University of California-Irvine. The donor died before he paid up his pledge. The donor’s widow, contending it was her husband, not she, who made the pledge, refused to honor it. Suing the donor’s estate, the university got a ruling in its favor, but it took eight years to collect the money.
Charities have fared worse against the living who don’t live up to their promises. The bottom line is that a pledge is an act of gratuity made of one’s free will. It isn’t a legal commitment, although it certainly implies a moral one. And because courts don’t view most fundraising pledges as legally enforceable, the delinquent donors get off the hook. No matter that their names may already appear on a contributors’ plaque or even a building.
So what’s a charity to do when someone goes back on his or her word? It can’t, like a bank or savings and loan, foreclose on a house or repossess a car.
High-stakes fundraising is a bit like a poker game. By publicizing their suit against Oliver-Hoffmann, the MCA people did the only thing they could: They called his bluff.
