The Importance of Being Charitable, not Gullible

Blog post by Daniel Billingsley, Vice President of External Affairs

I have said this in a number of training and speaking events over the past few years, and with tax reform changes that could impact charitable giving, it’s even more important to say this.

Donating to a personal money-raising website such as “GoFundMe” type of page is NOT a charitable contribution.

Last week, it surfaced that a couple had raised $400,000 for a homeless man after he had done a good deed. The story turned sour when it was reported that he was never given the money, and he alleged the couple was misusing the funds. By the end of the story, the couple had their brand new BMW confiscated as these allegations came to light.

Another fraud case involved an alleged scheme from a Loveland, Colo., woman who raised $20,000 claiming she had a serious medical issue and needed the money.

It should be no wonder then that the companies operating these pages have teams that look for fraud schemes. The ethics of donating to “individuals” rather than to organizations who have better controls and infrastructure are also in question. While we Americans want to ensure people are well taken care of, we also want our contributions to be properly stewarded.

In the case of the homeless man and the good deed gone punished, that $400,000 in the hands of an organization with proper homeless linkage services could have helped hundreds of people.

Each time we donate to a page like this, we are robbing ourselves of the joy of nonprofit impact. I know that detractors will say that they don’t trust charities or that they complain of overhead. However, once you are duped by a scam or fraud from a site that gives the money directly to a person or family, the sting can be much more painful than just knowing 10 percent of your contribution went to a nonprofit’s administration.

I also find it interesting that the GoFundMe platform charges different fees among individuals versus nonprofits. The Daily Dot reported that “The platform doesn’t take anything from individual campaigns, instead charging a 2.9 percent payment processing fee and $0.30 per donation. Charitable campaigns are a different matter. Registered non-profits that use the GoFundMe platform are charged 7.9 percent plus $0.30 fee for each donation.” That’s a significant difference.

Unlike kickstarter sites that help entrepreneurs raise venture capital for everything from documentary films to action figures of your favorite Supreme Court justices, these personal money raising sites use some emotional manipulation to draw you into contributions that fail to properly steward donors or notify them of how funds are properly used. Unlike a traditional nonprofit that builds relationships with donors, these sites are merely transactional.

And while it might seem tempting to pull out a credit card and make a small, token gift for a friend, donors should reach out and ask how else they could help. We certainly know that extreme and sudden medical bills can break families apart financially (they are an enormous cause of bankruptcies in the United States). At the same time, donors to these sites do not offer the same protections in the Association of Fundraising Professionals’ “Donor Bill of Rights” that we teach about in our Standards for Excellence or Fundraising curricula.

Buyer beware, but contributing to traditional nonprofits is always the safest bet. It is similar to the reminder when you disembark a plane that “the safest part of your journey is ending.” When we are driving our own cars, distracted or otherwise, it becomes much more of a gamble.

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Marnie Taylor