Because foundations and governments are very strict regarding the proper use of their funding, nonprofits are usually careful to guard those funds and apply them only to the purposes for which they were assigned. As was shown in this case, at least by the limited information given in the media and the jury award, sometimes nonprofits feel they have more leeway when it comes to individual and personal donors requests. Because they know that most donors will give and forget, they may not feel the obligation to prove to the donor that the funds were used in the manner which they requested. In many of the cases, the donation may be too small to warrant the proof that the donation was assigned properly. Nonetheless, technically and legally, when a donation is given regardless of the source, it ought to be used for the purpose to which it was given. This requires careful wording of donation and pledge requests. Under GAAP rules, the donations are categorized as Temporarily Restricted Donations, which are restricted until the moment that the service or project for which they were given has been completed. General donations fall under the unrestricted donations and can be used for whatever purpose the organization and it's governing board believe is the best use. Although GAAP requires that the money be counted as income and falls under the category of "temporary restricted net assets" for the period at which it was given, in a Director and Board's mind, it should be considered a liability until the service or project is completed. If it is not completed, that money should absolutely be returned, along with a clear explanation as to why the organization was unable to fulfill the donor's wishes. It's up to the donor if he accepts the return.
As a former Executive Director, I loved unrestricted donations. It implied that the donor trusted me, my staff, and my board to use the money in the best manner possible. Because of my experience, I also give unrestricted donations. Yet, I also understand the reasons that motivate a donor to give for a specific purpose, and this may require the most difficult discipline in any Executive Director's life, which is to be able to say, "We're sorry, but we will not be able to accept your donation, since it is not aligned with our mission." Perhaps this can be followed with a plea for a donation that is aligned, but it must always respect the donors desires. Because good nonprofits are strategically networked with other nonprofits, it may be possible to refer the donor to a place that does fit her mission and desire for funds, and maybe, one can hope that they may have a little left over for ones own needs.
Some of the comments at the bottom of the article for Garth Brooks, make him out to be the enemy, but Mr. Brooks is completely correct, if his telling of the facts is true. More donors should have the follow up intention that Mr. Brooks had, and demand that donations be used appropriately. At the same time, donors should be aware that nonprofits need money for mundane purposes in order to fulfill their mission, such as electricity, water, and even salaries.