Restricted charitable donations and the "Cy Pres" doctrine

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Courts apply the "cy pres" doctrine to best approximate deceased donor restrictions when these become illegal or impossible to carry out. I show, in a model of strategic donations, that a commitment to further protect deceased donor restrictions attracts more funds today at the price of inefficient allocation of funds tomorrow. The analysis identifies the benefits and costs of relaxing the doctrine, suggesting that a more flexible application by properly balancing its impact on present donations and future efficiency concerns, if feasible, would better serve to promote intergenerational social welfare.