Can a Mississippi city refund donations made for a specific project if the project changes substantially?

Plain-English summary

The City of Diamondhead accepted donations for a specific project: a dog park. The plans changed. The scope of work, the site location, and other particulars are not what the city told donors when it accepted the money. The mayor asked whether the city can refund the donations to the donors who gave for the original plan.

The AG's answer is the standard Mississippi rule on restricted-purpose donations: yes, a donation made to a municipality for a restricted purpose may be returned to the donor if the donation cannot or will not be used for that specific purpose. Whether the changes here go far enough to trigger that rule is a factual question for the local governing authorities (here, the Diamondhead Board of Aldermen) and not something the AG decides by official opinion.

The opinion notes that the dog park itself has not been canceled. The plan to build a dog park is still alive; what changed is the location and certain details. That is the awkward middle ground. If the city had abandoned the dog park entirely, donor refunds would be obviously appropriate. If the city were just tweaking minor details (paint color, fence height) while keeping the project substantively the same, refunds would be obviously inappropriate. The AG flagged that the call here is local: how different are the new plans from what donors thought they were funding?

The AG also referred the city to the Technical Assistance Division of the Office of the State Auditor for guidance on the return of any donated funds.

What this means for you

If you are a Mississippi mayor or city council member managing donated funds

The opinion holds that a donation made to a municipality for a restricted purpose, which cannot or will not be used for that specified purpose, may be returned to the donor. It holds that whether the donations here cannot or will not be used for the specified purpose is a factual determination for the local governing authorities, subject to judicial review, and outside the scope of an AG opinion. It notes the overall plan to construct a dog park had not been terminated.

If you are a donor who gave to a municipal project

The opinion holds that restricted-purpose donations may be returned to the donor when they cannot or will not be used for the specified purpose, citing prior opinions Lee (2023), Ginn (2016), and Clark (2002).

If you are a city attorney or finance officer

The opinion holds the refund question turns on whether the donation can or will be used for its specified purpose, a factual determination for the governing authorities. It refers the requestor to the Technical Assistance Division of the Office of the State Auditor for guidance on the return of any donated funds.

Common questions

Q: Can a Mississippi city return donations made for a specific project?
A: The opinion holds that a donation made for a restricted purpose, which cannot or will not be used for that specified purpose, may be returned to the donor.

Q: Who decides whether the project has changed enough to trigger a refund?
A: The opinion holds this is a factual determination for the local governing authorities, subject to judicial review, and outside the scope of an official AG opinion. The opinion notes the plan to build a dog park itself had not been terminated.

Q: Does the opinion decide whether Diamondhead's donations must be refunded?
A: No. Under Section 7-5-25 the office opines only on prospective questions of law and does not make factual determinations; it offered no opinion on the specified purpose of the donations or whether that purpose had changed.

Background and statutory framework

The opinion rests on a line of prior AG opinions on returning restricted-purpose donations to municipalities. The authorities the opinion cited:

• Clark (Nov. 8, 2002): the original opinion establishing that restricted-purpose donations may be returned if not used for the specified purpose.
• Ginn (June 17, 2016): reaffirming the rule.
• Lee (July 25, 2023): the most recent restatement, quoted in the Depreo opinion.

The constraint on the AG itself runs through Section 7-5-25: the AG only opines on prospective questions of state law and does not make factual determinations.

Citations

• Miss. Code Ann. § 7-5-25
• MS AG Op., Lee (July 25, 2023)
• MS AG Op., Magee (Aug. 29, 2008)
• MS AG Op., Ginn (June 17, 2016)
• MS AG Op., Clark (Nov. 8, 2002)

Source

• Landing page: https://attorneygenerallynnfitch.com/divisions/opinions-and-policy/recent-opinions/
• Original PDF: https://attorneygenerallynnfitch.com/wp-content/uploads/2024/04/N.Depreo-April-2-2024-Returning-Donations.pdf

Original opinion text

April 2, 2024
The Honorable Nancy Depreo
Mayor, City of Diamondhead
5000 Diamondhead Circle
Diamondhead, Mississippi 39525
Re: Returning Donations

Dear Mayor Depreo:
The Office of the Attorney General has received your request for an official opinion.

Issue Presented
May donations made for a specific project, a dog park, be refunded to the donors if the project's scope of work, site location, and other important appurtenances have changed from the way it was presented at the time the donations were accepted?

Brief Response
Donations made for a restricted purpose may be returned to the donor if the donation cannot or will not be used for that specified purpose.

Applicable Law and Discussion
Pursuant to Mississippi Code Annotated Section 7-5-25, this office may only opine on prospective questions of law. An Attorney General's opinion can neither validate nor invalidate past action. MS AG Op., Magee at *1 (Aug. 29, 2008). Further, we do not make factual determinations by official opinion. Thus, we offer no opinion on the specific purpose for which the donations you reference in your request were made or whether the specified purpose of the project has changed.

This office has previously opined that "a donation made to a municipality for a restricted purpose, and which cannot or will not be used for that specified purpose may be returned to the donor." MS AG Op., Lee at *1 (July 25, 2023) (citing MS AG Ops., Ginn (June 17, 2016) and Clark (Nov. 8, 2002)). We understand from your request that while the plans for the dog park and its location may change from what was initially contemplated, the overall plan to construct a dog park has not been terminated. Whether the donations cannot or will not be used for the specific purpose for which they were donated is a factual determination to be made by the local governing authorities, subject to judicial review, and is outside the scope of an official Attorney General's opinion. We refer you to the Technical Assistance Division of the Office of the State Auditor for guidance on the return of any donated funds.

If this office may be of any further assistance to you, please do not hesitate to contact us.

Sincerely,
LYNN FITCH, ATTORNEY GENERAL
By: /s/ Beebe Garrard
Beebe Garrard
Special Assistant Attorney General