(BBB news release) In the wake of the shooting at Sandy Hook Elementary School in Newtown, Conn., the BBB Wise Giving Alliance, the national charity monitoring arm of the Better Business Bureau, cautions donors about potential red flags in fund raising to help Newtown and to be aware of the different circumstances that often emerge in tragedy-related philanthropy.
“Certainly this tragedy will inspire people to give. Americans are emotionally drawn and will respond to requests to help the Sandy Hook community, advocacy groups and mental health charities among others,” said H. Art Taylor, President & CEO, BBB Wise Giving Alliance, “and while they should be on the lookout for questionable solicitors and scammers, people may be less clear about the complicated legal character of their gifts.” The BBB Wise Giving Alliance offers ten tips to educate donors, avoid problem appeals, and give with confidence.
BBB Wise Giving Alliance urges donors to give thoughtfully and avoid those seeking to take advantage of the generosity of others. Here are “Ten Tips for Giving with Confidence” –
1. Thoughtful Giving
Take the time to check out the charity to avoid wasting your generosity by donating to a questionable or poorly managed effort. The first request for a donation may not be the best choice. Be proactive and find trusted charities that are providing assistance.
2. State Government Registration
About 40 of the 50 states require charities to register with a state government agency (usually a division of the State Attorney General’s office) before they solicit for charitable gifts. If the charity is not registered, that may be a significant red flag.
3. Respecting Victims and Their Families
Organizations raising funds should get permission from the families to use either the names of the victims and/or any photographs of them. Some charities raising funds for the Colorado movie theater victims did not do this and were the subject of criticism from victims’ families.
4. How Will Donations Be Used?
Watch out for vague appeals that don’t identify the intended use of funds. For example, how will the donations help victims’ families? Also, unless told otherwise, donors will assume that funds collected quickly in the wake of a tragedy will be spent just as quickly. See if the appeal identifies when the collected funds will be used.
5. What if a Family Sets Up Its Own Assistance Fund?
Some families may decide to set up their own assistance funds. Be mindful that such funds may not be set up as charities. Also, make sure that collected monies are received and administered by a third party such as a bank, CPA or lawyer. This will help provide oversight and ensure the collected funds are used appropriately (e.g., paying for funeral costs, counseling, and other tragedy-related needs.)
6. Advocacy Organizations
Tragedies that involve violent acts with firearms can also generate requests from a variety of advocacy organizations that address gun use. Donors can support these efforts as well but note that some of these advocacy groups are not tax exempt as charities. Also, watch out for newly created advocacy groups that will be difficult to check out.
7. Online Cautions
Never click on links to charities on unfamiliar websites or in texts or emails. These may take you to a lookalike website where you will be asked to provide personal financial information or to click on something that downloads harmful malware into your computer. Don’t assume that charity recommendations on Facebook, blogs or other social media have already been vetted.
8. Financial Transparency
After funds are raised for a tragedy, it is even more important for organizations to provide an accounting of how funds were spent. Transparent organizations will post this information on their websites so that anyone can find out and not have to wait until the audited financial statements are available sometime in the future.
9. Newly Created or Established Organizations
This is a personal giving choice, but an established charity will more likely have the experience to quickly address the circumstances and have a track record that can be evaluated. A newly formed organization may be well-meaning but will be difficult to check out and may not be well managed.
10. Tax Deductibility
Not all organizations collecting funds to assist this tragedy are tax exempt as charities under section 501(c)(3) of the Internal Revenue Code. Donors can support these other entities but keep this in mind if they want to take a deduction for federal income tax purposes. In addition, contributions that are donor-restricted to help a specific individual/family are not deductible as charitable donations, even if the recipient organization is a charity.
Read the entire BBB news release HERE.