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What Happens When Donors Take Back?

When a donor wants his money back, the resulting litigation can resemble a nasty child custody battle. There are two well-intentioned parties and an innocent. The generous donor and the admirable charity are akin to parents; the charitable purpose is akin to the innocent and defenseless child. As in a custody battle, everybody wants to do the right thing, but the legal wrangling can nevertheless have an unsatisfying outcome.

Such a tussle is now in progress over the construction of an Armenian genocide museum and memorial in Washington, D.C. There are multiple parties and at least three current lawsuits, but the gist of the dispute is that after having donated $15 million (including several adjacent lots) to the Armenian Assembly of America to purchase a downtown site, Gerard Cafesjiian and his family foundation claimed, among other things, they had been shut out of the decision-making process and that the project had strayed from its original vision. Three years after the donation was confirmed in 2003, Cafesjiian sought to reclaim his donation and filed a lien against the building. The non-profit corporation holding the property disputed the claims and alleged, among other things, a breach of fiduciary duty by Cafesjiian's agents on its board.


Bruce D. Collins

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