November 20, 2013
The bigger and more tragic the disaster the more likely it is that bad non-profits will be emerging ready to take money from people who want to help. For every reputable non-profit there’s 10 shady ones that are using people’s misfortune to line their own pockets. In this article my goal is to arm you with information that will help you identify the bad guys and their scams and, as a result, put your generous gifts to work with non-profits that really care about helping people.
All Charities Are the Same Aren’t They?
Largely because of the work of reputable charities like The Salvation Army and The Red Cross, many consumers believe that all non-profits are created equal and that anytime they make a donation to any organization that has appropriate classification as a 501-C-3, that their donation is going to good use to actually help the people in need. The reality in today’s marketplace is that a high percentage of non-profits are not good stewards with the donations they receive. Some of the biggest most reputable appearing non-profits and ministries that dominate television and on radio make big promises on their infomercials. In reality, a relatively small percentage of gifts are reaching the needy. In the case of many of the web based charity campaigns, none of the money is going to the cause that is advertised. Buyer beware. Or, I guess we should say, ‘giver beware.’
Sadly, charities and ministries who once had a real heart for helping people, can lose focus of their foundational purpose because of the jaws of overhead. CEO and leadership salaries, marketing and other infrastructure expenses can easily turn even the best intentioned groups into an organization that is overwhelmed with the costs of doing business. Well respected and generally trusted ministries based out of large churches at times even struggle with the process of making sure that gifts intended for relief actually end up in the hands of the needs.
Avoid The Charity Scam by Finding Reputable Charities and Ministries
Here are some suggestions for making sure you don’t become a victim of a charity scam.
Delete All Charity Emails: First, never, ever, ever give to any cause that approaches you via email. Unless you have an established relationship with the ministry that you’ve first initiated, consider all the email solicitations to be bogus. Even emails that appear to be from a major charity are often a front for a scam, often located off-shore and out of reach of US laws.
Look At Financials: Credible non-profits aren’t afraid to share their financials with donors. They’re often made available on the non-profit’s website. When looking at financials look for one number. That’s the percentage of money that ends up going to the people in need. So, in other words, after marketing, administrative and CEO costs, what is the percentage of a dollar that gets to people who need help? There’s some debate on what constitutes an acceptable percentage. Personally, I like to see the number be 95% or greater.
Charity Watch Dogs: Several charity and non-profit watch dog groups can offer good intelligence as well. Charity Navigator is well respected as an objective s0urce of information. For Christian non-profits, The Evangelical Council for Financial Accountability offers a similar service.
Charity Scams Target Older Givers: Older people sadly often fall victim to charity scams. Their general lack of sophistication with email (see email scams above) along with isolation and their overall attitude of generosity makes for a perfect profile for the bad guys to go after. Take time to make sure that the seniors in your life become well informed about charity and non-profit scams.
Charity scams will only get more sophisticated and effective in the future. Indeed, high technology has given the bad guys a new ‘Wild West’ to operate in with great anonymity. Because of this, we all need to be even more vigilant in our efforts to separate the good from the bad. Giving to reputable and responsible charities can truly impact the lives of hurting people. As a consumer, you must shop…and give….wisely.
Pete Thomson – CEO
Editor’s Note: Pete Thomson is a veteran of the radio and television industry. He’s currently President/CEO of McQ Media Inc, a full service media and advertising firm based in Dallas, Texas. He has consulted the nonprofit sector for over 20 years and has helped design donor development campaigns for numerous nonprofit organizations. Thomson’s weekly consumer program on KRLD Radio in Dallas, The Consumer Team, addresses consumer issues including charity scams and fraud.