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 State Auditor's Technical Assistance Division for guidance on the mechanics of returning the funds. That is the practical signal: the State Auditor will see this in the audit, so document the analysis carefully.
What this means for you
If you are a Mississippi mayor or city council member managing donated funds
The legal question is not "can we refund?", it is "can the donation still be used for its specified purpose?" Build the analysis around that. Three things to put on the minutes:
- What did donors think they were funding? Pull the solicitation materials, the press releases, the social media posts, the receipt language. The "specified purpose" is what donors were told.
- What is changing about the project, and why? Document the operational reasons (site cost, environmental issues, neighborhood opposition, permit denial).
- Does the new project still match the specified purpose, or is it a different project under the same name? That is the judgment call.
If the analysis points to "different project," refunds are the safer answer than spending donor funds on something they did not sign up for. If the analysis points to "same project, different details," keep the funds and use them.
If you are a donor who gave to a municipal project
Ask. If the project changes in a way that matters to you, write to the city, reference your donation and the original purpose, and ask whether your funds will be used as intended. If they will not, you have a clean basis to ask for a refund. The legal authority in Mississippi has been settled at least since the 2002 Clark opinion and confirmed repeatedly since.
If you are a city attorney or finance officer
Two practical points. First, before accepting a donation that says "for the dog park" or "for the splash pad," think about what happens if the project changes. A short donor agreement that specifies what happens to the funds if the project is canceled, materially changed, or fully funded by other sources is worth the trouble. Second, when a refund situation arises, document the analysis and consult the State Auditor's Technical Assistance Division. The AG specifically pointed there.
If you handle parks and recreation projects with donor funding
The political pressure when a project changes is to "just use the money for something good." That is the wrong frame. Donor restrictions are real, and changing how restricted funds are spent without donor consent or refund is the kind of thing the State Auditor flags. Either get donor consent to the new use, or refund and re-solicit.
Common questions
Q: What is a "restricted purpose" donation?
A: A donation made for a specific identified use, like building a particular park, funding a specific scholarship, or buying particular equipment. The opposite is an unrestricted donation, where the donor gives money to the city for general use. Restricted donations are governed by donor intent.
Q: Who decides whether the project has changed enough to trigger a refund?
A: The local governing authority (mayor and board of aldermen, or city council, depending on city form). The AG explicitly said this is a factual determination outside the scope of an official AG opinion. Subject to State Auditor review and ultimately to judicial review if it gets challenged.
Q: What if some donors want a refund and others want to keep the donation in place?
A: That is allowed. The refund analysis runs donor by donor. A donor who is happy with the changed project can leave their donation in place; a donor who is not can request a refund. The city should track who falls in which category.
Q: Can the city use the donated funds for a different but similar project (like a community garden instead of a dog park)?
A: Not without donor consent or a refund. The funds are tied to the specified purpose. Switching to a different specific purpose requires the donors to agree (or the city to refund and accept a new restricted donation for the new purpose).
Q: What if the donations have already been spent on planning or design work for the original project?
A: Then those expenditures were used for the specified purpose at the time. The refund question applies to remaining funds. The opinion does not require the city to reimburse the donation account from general funds for money already spent in good faith on the original project.
Q: Who is responsible if donations are misused?
A: Local officials, with State Auditor and potentially civil-suit accountability. That is why the AG pointed to the State Auditor's Technical Assistance Division. The State Auditor sees these decisions and has the institutional muscle to pursue misuse.
Background and statutory framework
Mississippi has no detailed statute on returning donations to municipalities. The rule comes from a line of AG opinions building out a common-law-style doctrine of donor intent applied to municipal bodies. The leading authorities the AG 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