Hearts Are in the Right Place, but Where Is the Money?
December’s donation dollars are flowing, but what really happens to those funds? Better Business Bureau (BBB) warns that most charity schemes occur after money is collected.
“Frankly, consumers don’t know what happens after donations leave their hands,” says Robert W.G. Andrew, CEO of BBB serving Alaska, Oregon and Western Washington. “Best case scenario? 99 percent of the contributions are allocated to charitable causes. Worst case scenario? Frauds are pocketing the money.”
BBB’s 35 Percent-65 Percent Rule: Organizations should spend no more than 35 percent of contribution revenue on fundraising and no less than 65 percent on programs or activities that benefit charitable causes, according to BBB’s Standards for Charity Accountability.
“Financial transparency is critical,” adds Andrew. “Fundraising costs money and solicitation materials aren’t cheap so be wary of organizations that claim 100 percent goes to the cause. If the numbers don’t add up, donate elsewhere.”
Free wise giving advice and charity reports are available through the following resources:
Better Business Bureau: akorww.bbb.org/charity
Oregon Department of Justice: doj.state.or.us/charigroup
Internal Revenue Service: irs.gov/charities-&-non-profits
Charity Navigator: charitynavigator.org
GuideStar: guidestar.org