Public Perception Or Public Deception
Last Wednesday, the FTC and 48 states announced a nationwide sweep targeting scam artists who claimed to be raising money for military veterans, firefighters, and police officers. In reality, almost all of the money went to the fundraisers themselves. How can you, as a donor, guard against such scams, and discriminate between an honest, and a bogus charity?
Don’t get me wrong, I love quality transparency and accountability as much as the next guy – but it is these “task forces” and “nationwide sweeps” that scare the average donor away from giving to nonprofits altogether.
Here in Phoenix, a 5-day series ran in our daily paper detailing the conquests of a 22-organization network that embezzled, laundered, and otherwise stole millions of dollars. No mention about the fact that those 22 organizations represent less than one-tenth of one percent of the nonprofit agencies in Arizona alone. Or that the sector is the third largest source for employment in the state. But that didn’t stop the Pulitzer-hungry reporter from painting with the proverbial broad brush:
An Arizona Republic investigation found that charities can use a kind of title transfer of gifts in kind that inflate their finances, making their operations appear larger than they are. That improves the financial profile they present to donors in the federal charity drive and may attract more cash donations. The charities then spend most of the cash on salaries and expenses and pass the cash to other charities operated by relatives, co-workers or associates.
And again:
Donors to charities often have little say in how their cash contributions will be spent — and almost no way to find out. Despite rules that require non-profits to disclose their finances, their operators and their missions, federal tax forms give only a limited picture of a charity’s operation. At the same time, the Internal Revenue Service doesn’t have the staff to investigate more than a fraction of the nation’s 1.2 million charities. An Arizona Republic investigation shows charities can use their donated cash and goods in ways that can be misleading and controversial, and in ways donors may never know.
I feel like creepy music from a horror movie should start playing through your speakers now. Yes, there are going to be bad apples. Always. But there are responsible ways to react, and setting up a website through the Federal Trade Commission entitled, “Avoid Charity Fraud” seems a little dramatic to me.
Maybe I’m alone in this thought. What say you out there, Nonprofit Community? And you, Mr. or Ms. Donor?
Sam
“The world and life have been mighty good to me. I want to put something back.”
Ted Turner



