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<br />.
<br />
<br />
<br />A PUBLICATION FOR LOCAL GOVERNMENTS
<br />Volume 2
<br />
<br />Fall 1993
<br />
<br />.
<br />
<br />Number 3
<br />
<br />?:GENERAL COUNSEL "':' ::.
<br />
<br />Local units of government are often ap-
<br />proached for contributions to various worth-
<br />while events and causes. A governing board
<br />must evaluate these requests in light of the
<br />State constitutional requirement that ~leXll
<br />penditures of public money be for a publf
<br />purpost. '
<br />The analysis of public purpose for gifts to
<br />an il,dividual or organization must involve a
<br />determination of whether the primary object is
<br />to promote a private end. If the primary object
<br />is to benefit a private objective, the expendi-
<br />ture cannot meet the test even if there is inci- '
<br />dental public benefit Conversely, if the pri-
<br />1m.!)' objective is to meet a public purpose, an
<br />incidental benefit to private individuals does
<br />not disqualify the expenditure.
<br />Therefore, a direct contribution to an in-
<br />dividual citizen or organization for sponsor-
<br />ship or support of an undertaking that prima-
<br />:ily benefits the individual or organization
<br />c:mnot be supported on the theory that the
<br />Alic beneiits when individuals gainfully
<br />~sue enterprises. The general public must
<br />benefit. While public purpose should be con-
<br />
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<br />
<br />. . . . .
<br />., ..::' I NSI D E :~:::::~:.~:
<br />- .~ ....... : _....:-...~,: . ....>.-..::..-~
<br />'::., New board promotes::::.:'~~:.~:.:.~:::: ,.,:'.;,:' '
<br />,:JnnC?y.atio~ !~ gov~rf)~~n~,..pag.e~,~~: '.':
<br />~.:""':'~:~.',"~:':",,':' ...... .v:;.".=."-,:"::,, .:~~<:.; "_:::.:::: .-:'. ')';:' ;-':.:_:' :::. :', ~. ~.:.. .
<br />. .,'00 your-gifts have a"::_;~;":':,"... ".7':~-' '..:- .'
<br />:~ ":~~.~IiC p~rp.~~e? '::: ';: >',::: .::" page 4
<br />
<br />".1. .
<br />
<br />,:>. Spotlighton:..Mi:H~.~a~o .".., p'age 7..
<br />':/;j.(.f.>~'.::.'~:~:>':';';:?~,~~2::~~::t.:,;:: ",,~;::,~., :' - .
<br />
<br />Gifts versus promotional costs
<br />
<br />strued in light of modem life the test cannot b4
<br />met by theoretical assessments of what miglJ
<br />be good for the public. It should be reasonabt'
<br />libly that a direct benefit to the public 'till
<br />OCCU\
<br />Consequently. aJocal unitof govemme.
<br />cannot donate funds to improve a church 1*>-
<br />gram, nor may they donate funds to the Clllm-
<br />ber of Commerce, Boy Scouts. Red Criss,
<br />Rotary, Kiwanis and other kindred gr&ps. See
<br />Op. Atty. Gen. September 28, 1933; Op. Atty.
<br />Gen. 59-A-3,luly 10, 1946.
<br />The Minnesota standard is stated in Burns
<br />v.Essling, 156Minn 171 (1923). The court on
<br />page 174 says, .. The wisdom or expediency of
<br />a proposed expenditure of taxpayers' money
<br />...is to be determined solely by the legislature
<br />or by local authorities to whom legislative
<br />powers have been delegated. It is well settled
<br />that. if the priml!:.r;)'PQjeclof an expenditure 01
<br />municipaJ funds is to SubsWl!'ll ~ p&-
<br />pose. the expenditure is legal. It is equally wej
<br />settled that. if the primary object is to prOrnbte
<br />some private end. the expenditure is illegaf..'
<br />The Attorney General has determined
<br />
<br />that general powers to expend funds by eilher
<br />a charter city or a statutory city are not suffi-
<br />cient to allow gifts which do not meet the above
<br />standard. See Op. Atty. Gen. September 28,
<br />1933; Op. Atty. Gen. 59-A-3,luly 10, 1946.
<br />The guidance above wOl,.lld be sufficiem :f
<br />DOt for the prom~onal activities perfo~d by
<br />many of the abo~ referenced organiz3uons.
<br />While a general gift to the Rotary is. without
<br />authority, a contribution by a city to help sp$n-
<br />sor an annualma.rlUbon.or festival to promote
<br />a city may qualify.
<br />In light of the gray area between promo-
<br />tional expe1l<liwm ana gifts, it is our advice
<br />that a local unit of government develop apolic)<
<br />or procedure lOlmIU'te that aU expenditures o~
<br />this narure ve,ey~~teG prior .10 commitment
<br />offuno...ln the caso<>fcharter citJ:s. the charter
<br />should be evaluated to determine whether spe-
<br />cific reference is present to provide authority
<br />for gifts which do not meet the general stan-
<br />dard. If the charter is silent, the general stan-
<br />dard should be followed.
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