After a terrible and very public tragedy, such as the recent wildfires in Australia, people want to help in any way possible, and that often means contributing to fundraisers to help the survivors and the families of the victims. Sadly, scammers often take advantage of these moments of vulnerability to deceive donors. In addition, there are often campaigns set up by well-meaning individuals who may or may not be directly connected to the tragedy.
BBB Wise Giving Alliance urges donors to give thoughtfully and avoid those seeking to take advantage of the generosity of others. Here are BBB WGA’s tips for trusted giving:
1. Thoughtful Giving: Visit Give.org to check charity ratings and verify if a charity meets the BBB Standards for Charitable Accountability. 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. Crowdfunding: Keep in mind that some crowdfunding sites do very little vetting of individuals who decide to post for assistance after a tragedy or a disaster, and it is often difficult for donors to verify the trustworthiness of crowdfunding requests for support. For more Give.org tips on crowdfunding, check out this Wise Giving Wednesday post. For more information on crowdfunding scams, see our article on how to Give Wisely Through Online Fundraising Campaigns.
3. Respect for 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 victims of previous shootings did not do this and were the subject of criticism from victims’ families.
4. Government Registration: About 40 of the 50 states in the U.S. 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. In Canada, all charitable organizations must be registered with the Canada Revenue Agency. If an organization is claiming to be a charity and they aren’t registered with the CRA, that’s a red flag. In Australia, check out the registry of the Australian Charities and Not-for-Profits Commission. While the registration with this government agency does not mean the government is recommending or endorsing the charity, it does signify that the group has filed the appropriate paperwork with this agency.
5. 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.
6. 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, if 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 (paying for funeral costs, counseling, and other tragedy-related needs).
7. 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.
8. Online Caution: Never click on links to charities on unfamiliar websites or in text messages or email. These may take you to a look-alike website where you will be asked to provide personal financial information, or may download harmful malware onto your computer. Don’t assume that charity recommendations on social media have already been vetted.
9. 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 without having to wait until the audited financial statements are available sometime in the future.
10. Newly-Created v. Established Organizations: This is a personal giving choice, but an established charity will more likely have the capacity and experience to address the situation quickly and also 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. News reports may help identify responding charities but are not a guarantee that the organizations will use donations effectively.
11. Tax Deductibility: Not all organizations collecting funds in the U.S. to assist after a 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 or family are not deductible as charitable donations, even if the recipient organization is a charity. You can check a U.S. organization’s tax status with the IRS. In Canada, only specific types of registered charities are able to provide tax receipts. If you are not sure whether your donation would be eligible for a tax credit, contact the Charities Directorate at 1-800-267-2384. You can also search for information on which organizations can issue official donation receipts.
ABOUT BBB WISE GIVING ALLIANCE: BBB Wise Giving Alliance is a standards-based charity evaluator that seeks to verify the trustworthiness of nationally-soliciting charities by completing rigorous evaluations based on 20 holistic standards that address charity governance, effectiveness reporting, finances, fund raising, appeal accuracy, and other issues. Learn more about the 20 BBB Charity Standards and about local charity review at local Better Business Bureaus at Give.org.
ABOUT BBB: For more than 100 years, the Better Business Bureau has been helping people find businesses, brands, and charities they can trust. In 2018, people turned to BBB more than 173 million times for BBB Business Profiles on nearly 5.4 million businesses and Charity Reports on 11,000 charities, all available for free at BBB.org. The International Association of Better Business Bureaus is the umbrella organization for the local, independent BBBs in the United States, Canada, and Mexico.