The Truth About Charity Scams: Giving Wisely

Choose wisely when donating to charity with help from the BBB

The benefits of charitable giving reach far beyond the gratification of the provider and the appreciation of the receiver. For every altruistic action, there is an equal and observable reaction. Generosity has been linked not only to healthier minds and bodies, but also to stronger social connections and overall happiness.

According to the 2015 Charitable Giving Report provided by Blackbaud, in the past year, non-profit charitable giving in the United States increased 1.6% and online giving grew a measurable 9.2%.

As our inclination to give back increases, our exposure to charity scams grows in unison. With progressively savvy scam artists gunning to take advantage of your generosity, checking a charity’s credibility at give.org  before donating not only ensures that your dollars make a difference, but also helps to defend the integrity of charities operating honestly.

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THE FOUR FACTORS OF TRUSTWORTHY CHARITIES

1. Governance & Oversight

What We Consider: Board Oversight, Board Size, Board Meetings, Board Compensation and Conflict of Interest

A charity’s board should maintain at least five voting members free of conflicting interests and provide adequate oversight of its operations and its staff. Regular appraisals of the CEO’s performance, fundraising practices, finance safeguarding and at least three yearly meetings are just a few considerations of sufficient board governance and oversight.

2. Measuring Effectiveness

What We Consider: Effectiveness Policy and Effectiveness Report

Policy must be assessed no less than every two years and submitted to the governing body for its approval. Charities should consider the impact of their organization and set goals and standards that meet potential donors understanding and expectations.

3. Financial Transparency

What We Consider: Program & Fundraising Expenses, Accumulation of Funds, Audit Reports, Accurate Expense Breakdown & Reporting and Budget Planning 

It is the right of the donor to know where their donations are going. At least 65% of expenses must be allocated towards program activities with no more than 35% spent on fund raising contributions. Upon request, complete annual financial statements including a breakdown of expenses and any joint cost allocations should be made available.

4. Solicitation & Information

What We Consider: Honest & Accurate Marketing Materials, Annual Reporting, Website & Cause Disclosures, Donor Privacy and Complaints

For charities, the success of their mission often depends predominately on their fundraising efforts. Truth in advertising applies to charities, just as it does to businesses or service providers. And just as financial management should remain transparent to donors, so should annual reports, marketing disclosures and donor privacy policies.

CONSUMER CONTRIBUTIONS: GIVING WISELY & YOU

Get The Name

Take care in knowing that your donations are reaching your intended charity. With thousands of charities serving a similar purpose, it can be easy to mistake one charity for another simply because they carry a similar name.

Take Your Time

Avoid giving donations on the spot regardless of pressure from the fundraising party, in spite of heart-wrenching petitions and even in the wake of a natural disaster. As a donor, you reserve the right to do your research and ensure you’re giving wisely.

Ask For Specifics

Don’t hesitate to dig for more details. Reputable charities will be well versed in their mission and your involvement.

Tax Exempt vs. Tax Deductible: Know The Difference

Verify whether or not a charity is tax exempt and if your donation will be tax deductible, and know the difference. Tax exempt means that the charity can benefit from complete relief from taxes, reduced tax rate, or a partial tax exemption on certain items. Tax deductible means that the donor can deduct their donation from their own taxable income. 

Check It Out

Certain states require charities to register with their respective attorney general office. You can also utilize the Better Business Bureau when looking into a charity.

BENEFICENCE AS A BUSINESS: GIVING WISELY & YOUR BUSINESS

There are many ways to give back as a business. Make it a one-time donation on behalf of the company as a whole, get your employees involved and vow to match their donations or incorporate charity into your business model for the long-term. No matter how you give, giving wisely as a business is just as important as giving wisely as a consumer.

Pick A Purpose

Talk about who, what and why. Who do you want to donate to? What will you be donating? Why is this charity close to the heart of your business? No matter your rhyme or reason, be honest about how much time, energy and money you can afford to devote to the cause of your choice. Be prepared to clearly communicate your mission and your motives.

 Decide On A Direction

Donating to a charity as a business doesn’t have to mean shelling out tons of money upfront. Center donation efforts around an event and commit to donating what you make in ticket sales. Leverage your relationships and inquire with other businesses about helping with event organization whether it be donating their products, services or simply their time to ensure it runs smoothly. If time constraints don’t allow for event planning, choose to donate a portion of the profits from something you already sell. Make sure to set time frame and pay out expectations ahead of time with the charity of your choice.

Create A Campaign

Don’t shy away from using your donation efforts to drive traffic to your business. The benefits of promoting your partnership with a charity are two-fold. The cause you support will reap rewards as well. Spread the word. Clearly advertise what consumers can do to contribute on social media, by way of your website, and even hand out flyers!

What matters most about giving back, is just that you’re doing it at all.

The Truth About Charity Scams: Giving Wisely

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