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Some time ago, a few people set up a fundraiser to solicit private people to give money to fund a government project that was not meant as a gift to reduce the debt of the public. The campaign went sideways (embezzlement and fraud in the inducement are alledged), but I am more interested in the original idea, which I heard was illegal or even unconstitutional:

  • Why can't the federal government (the executive!) take the money raised by private citizens to fund a project they started? or phrased differently: What's the law that regulates it?

  • What is the legal difference between such a campaign (private citizens wanting to gift money to the government to fund a program) and war bonds?

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    People can gift money to the federal government but I don't think they can earmark it. A bond is paid back and a gift is not paid back. – George White Aug 21 '20 at 20:41
  • @GeorgeWhite the campaign was not couched as a gift, it was couched as private funding of a government project that was proposed. Which is, apparently illegal and/or unconstitutional. – Trish Aug 21 '20 at 20:44
  • @GeorgeWhite according to the Treasury, the only acceptable reason to gift to the government is to "reduce the debt of the public" under 31 U.S.C. 3113 – Trish Aug 21 '20 at 20:48
  • Largely addresses in the answer here: politics.stackexchange.com/questions/6281/… "The basic rationale is that Congress's control over the budget is meant to be a tool to give Congress general control over what the government can do. " – jeffronicus Aug 21 '20 at 20:53
  • @Trish - thanks, I would say that under that provision one can gift to the federal government. And I knew that the "charity" in the news did not purport to give the funds to the government. – George White Aug 22 '20 at 7:13
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Because the US government operates in a restricted fashion that is not analogous to the freedom that ordinary people have, in the US, government action requires authorization, hence the many opening lines "By the authority vested in me as President by the Constitution and the laws of the United States of America, including..." in executive orders. So the first action mandated is that the Sec'y of Homeland Security

shall take all appropriate action and allocate all legally available resources to immediately construct, operate, control, or establish contracts to construct, operate, or control facilities to detain aliens at or near the land border with Mexico.

That means there has to be a legal path whereby resources are utilized for this project. Congressional appropriation is one path. In a few other cases, such as the Smithsonians, the laws creating the institutions not only authorized appropriations (by Congress), it also allows them through various other provisions to receive specimens, and they have the power "to receive money or other property by gift, bequest, or devise, and to hold and dispose of the same in promotion of the purposes thereof". They also have the power to "to make such disposal of any other moneys which have accrued, or shall hereafter accrue, as interest upon the Smithsonian fund, not herein appropriated, or not required for the purposes herein provided, as they shall deem best suited for the promotion of the purpose of the testator". Note that this only applies to funds not appropriated by Congress: this discretion required an act of Congress.

So in lieu of a law authorizing the receipt of donations from "the public", donations cannot be accepted. Congress has authorized a general power to receive donations to reduce the national debt under 31 U.S.C. 3113, but not to fund other projects, such as build a wall.

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Why can't the federal government (the executive!) take the money raised by private citizens to fund a project they started? or phrased differently: What's the law that regulates it?

There may be no legislative restriction but the government has stated that they won't. They can do this because of the common law surrounding gifts - one of the criteria for a gift is that the recipient accepts it. The government has stated that they "may" accept gifts only if the gift is used to directly reduce debt. Presumably, they use "may" to retain their discretion in a case-by-case basis allowing them to, for example, if the gift is of questionable providence it would be rejected.

What is the legal difference between such a campaign (private citizens wanting to gift money to the government to fund a program) and war bonds?

The former is private fundraising for a purpose that cannot be fulfilled because the government will not accept gifts with such a condition. At best the promoters are misleading the contributors, at worst they are committing fraud.

A war bond is a government-issued, usually zero-coupon, usually low-value bond sold to investors to fund a specific government purpose - specifically war. These are not gifts - they are loans from the bond purchaser which will be repaid to the bondholder on maturity. There is no general rule against government issuing bonds nor for issuing bonds for a specific purpose. For example, if the government chose, it could issue bonds to fund a border wall.

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It is legal

Contrary to what many commenters and posters have said, it is legal for the federal government to accept gifts for other reasons than reducing the deficit. It can even accept gifts supporting specific programs.

There are several statutes that explicitly allow for such gifts. For example, 22 USC § 2697 Acceptance of gifts on behalf of United States covers, in some detail, gifts to the Department of State. Among other things, it explicitly allows conditional gifts:

  • "The Secretary of State may accept on behalf of the United States gifts made unconditionally... for the benefit of the Department of State (including the Foreign Service) or for the carrying out of any of its functions. "

  • "Conditional gifts may be so accepted at the discretion of the Secretary... and used in accordance with its conditions...""

The rest of this section covers topics such how gifts are to be used, and their treatment in the tax code.

There are many similar statutes for other departments, agencies and programs. Examples include DoD, DHHs and FEMA.

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