The 2019 alleged scam on GoFundMe by a homeless man in Philadelphia and a New Jersey couple has highlighted one problem with generosity; there are a lot of liars and cheaters out there. That is nothing new, just an additional example of a well-established fact.
Avoiding that type of scam is relatively easy – avoid impulse giving. Scammers like that prey upon compassionate people, a lot of them, and hope that enough people respond with a little money to make it worth their effort. In the case of the Go Fund Me scam, over $400,000 was donated, mostly by small gifts. It isn’t hard to imagine a weak justification based on the small amount of most donations; “Hey, no one lost enough to hurt themselves financially.”
So, avoid impulse giving. Is the problem solved so we can just give when we want? No, because there are many other ways cheaters work and there is another underlying issue about generosity that needs to be addressed. The underlying issue that makes careful attention important is that generous people want their donations to make a difference. Actually, even most small donors want their donations to make a difference.
No one wants to give money, a lot or only a little, to a scam or to benefit undeserving people. On the other hand, many people want to give and help people in need. After all, that is what we are directed to do as Christians. See Deuteronomy 15:11, 1 Samuel 2:8, Psalm 82:4, Proverbs 14:31, James 2:14-17, among many other verses and passages.
So how can we avoid scams and also do good with what we give? Here are a few ideas that may help.
Define your giving interests
Defining your personal values and setting your priorities based upon those values helps you give with the impact you want. If you have a few defined and identified charities where you feel donations are secure (or you have researched them and are comfortable), you are far less likely to be tempted by an unknown charity or scammed by a fraud.
What charity or ministry or cause has touched your heartstrings? Is it lost people in general or is it a missions destination with many lost souls to be reached? It is a ministry involving music, recreation, men, women, children, adoption, foster parenting, mentoring, human trafficking or any of literally hundreds of ministry opportunities at a large church like Idlewild? For everyone there is a wrong that is cared about, a social injustice to address, or some need to be met. If you are in doubt about yours, give us a call at (813) 264-8713 at the Foundation and we can make recommendations. Alternatively, we will sit with you and help you find the ministry where your passion lights up.
For most of us the goal isn’t a building with our name on it but rather a certain knowledge that we have given and helped those in need and we have walked hand-in-hand with the Lord in His mission. Let’s see how to do that effectively.
Know Your Charity or Non-Profit
Research matters. It isn’t fun, but it allows you to make a difference. There are a few relatively simple tools that can allow you to give with an impact and avoid the scams.
First, let’s learn the language of wisdom and research on the topic of charities and non-profits.
501(c)(3) is the tax code section number referring to the tax-exempt status of a nonprofit organization as qualified under IRS rules. 501(c)(3) organizations are allowed to receive tax-deductible donations from donors. A gift, no matter how charitable in nature, to a non-qualified person or organization is not deductible as a charitable donation. If an organization has that 501(c)(3) status, it has a determination letter from the Internal Revenue Service and can show that letter to you.
It may be helpful to know that there are different kinds of 501(c)(3) organizations, public charities and private foundations. They are each governed by different rules and laws.
There are a few websites you can check on to begin the process of investigating a charity with which you are not familiar. But there may be an easier way even than checking a few websites. If you give using a giving fund of the National Christian Foundation, they have already reviewed the authenticity of the charity and the 501(c)(3) tax code status of thousands of charities. All you have to do is attempt to make a grant and look up the charity on NCF’s grant website. If they are listed, they are legitimate. If they are not listed, you can check with NCF because they might be a good charity, but they just have not been reviewed yet.
Do not assume a charity unknown to you is legitimate; take the time to verify it. A donation to a fake charity is not only a waste of your good money, it is not deductible if it does not have its 501(c)(3) determination letter. Don’t just take the charity’s word for it.
You can check on the charity’s 501(c)(3) status by going to the IRS website for that purpose. Under Select Database enter Search All. Under Search by, enter Organization name, then under “Search Term” enter the organization’s name, city and state. Sometimes persistence and multiple efforts are required. For example, The Idlewild Foundation comes up only under Idlewild Foundation and not The Idlewild Foundation.
That’s only a start, though.
Perhaps the best help is Guidestar. The Guidestar site allows a search and provides information on the charity or non-profit, including the organization’s EIN, address, principle officer, and even the mission statement, if the organization has one.
The Better Business Bureau has a search site that may help you spot a problem charity. Go to that site and type in the charity’s name and see if there is a report. This is a limited site, but still a good neutral source that may help you spot a problem charity.
The American Institute of Philanthropy maintains a charity watch site with the purpose of helping donors make informed giving decisions. The Institute rates charities pursuant to a number of criteria, as well as publishes helpful articles about the charitable sector. Unfortunately, the site is only accessible to the general public on top-rated charities, meaning that many fine but smaller charitable organizations cannot be checked.
Charity Navigator has a site that allows the public to search by charity name. You can also narrow the search by keyword. However, they do not rate many fine organizations because they limit ratings to organizations with annual revenue above $1 million.
Florida has laws aimed at protecting potential donors from scams, but enforcement is hard due to Constitutional protections for charitable organizations. All charitable organizations and sponsors must register with the Florida Department of Agriculture and Consumer Services (FDACS) before engaging in any solicitation activities in or from the State of Florida. Those registrations must be renewed annually with the state. If an organization is not registered, that is a concern. You can receive a copy of the registration and financial information of any particular organization soliciting in or from Florida by calling 1-800-HELP-FLA (435-7352) or 1-800-FL-AYUDA (352-9832) en Español. Many other states have similar laws to protect against fraud and abuse.
There are a few general rules you can follow to protect yourself against charities that do not comply with the law. Start with these:
- Avoid any charity or fundraiser that won’t show you its letter of determination of its 501(c)(3) status;
- Be cautious about a charity with a copycat name, a name similar to or mimicking a well-known charity;
- Check on a charity that calls you about or sends you a thank you for a donation or pledge you did not make;
- Do not donate when high-pressure tactics are used such as the need is urgent and immediate;
- Never send cash, a pre-paid card or wire funds and never give money to a “charity” that sends a courier or pick-up service;
- Do not fall for the “chance to win” some special or outrageous prize in exchange for your generous donation; and
- Stay away from any charity or non-profit that won’t give you information about its costs including its percentage of donations going to actual charitable use, fund-raising expenses, public education, administrative expenses, and overhead expenses and won’t tell you how the donation will be used.
You worked hard for your money; don’t give it away to a charity that pays a large percentage of all donated dollars to overhead, management, and fundraising. Some charities reach 97% overhead and only 3% of donated funds goes to help the cause supposedly supported. In checking, on an organization’s expenses, be aware that education can be an important part of an organization’s mission, but that some charities use that expense as their excuse for more donated funds not going to the cause.
Give with a goal
To give well and effectively, you should give with a passion and a goal. You have already found your passion because you have defined your interests as written above, but now you need to know what you hope to accomplish with your donation. The goal you have ties in closely with your passion. Look for some of the following:
• The specific needs of the charity or ministry you want to support are important. Are those needs immediate? Is the need a program that is important to you?
• Have a realistic and objective goal. Have a goal that is S.M.A.R.T., especially a goal that is specific and measurable to give your generosity a kingdom impact. Look for an organization with similar objective goals. For example, if your goal is salvation for nonbelievers, look for an organization with results and stories that show it is making an eternal difference for the lost.
• Is the need for a new program or to continue or expand an existing program? Is the program well-thought out and planned? Will it accomplish what you want?
• Look at the long-range plans of the charity or organization you want to support. i.e., is it a viable organization that will be around to continue to serve your passion into the future?
• What is the mission of the charity and is it fully aligned with your faith and passion?
• Know the management of the charity. Is it well-staffed with caring people whose passion aligns with yours?
There are a few final thoughts before you make a sizeable donation to a charity. These final thoughts include:
• Will the donation you are considering will have a negative or harmful impact on your personal finances, your financial future, or your estate plan and your desires to give to your family?
• Have you considered using life insurance to make a final gift to a charity or ministry that matters to you? Life insurance may allow you to make a far-larger charitable gift than may otherwise be possible. You can re-name the beneficiary of an existing life insurance policy. By making a charity the beneficiary of the life insurance policy, the charity may receive a larger donation than if you had just donated the cash value of a policy or donated the annual premiums.
• If income on the money you want to donate is important, have you considered such giving methods as a charitable gift annuity or a charitable remainder trust. These legal means of giving generate life income to the donor as well as a tax benefit. For more details on this complex but often used means of giving, give us a call at The Idlewild Foundation, see Planned Giving – A Blessing for All or discuss it with your financial adviser.
• It is often tax-wise to give other appreciated assets such as retirement accounts, real estate, stock, a business interest to a charity rather than cash. See Tax-Wise Charitable Giving for more information.
• Have you sought advice from your family and your financial adviser?
One of the best ways to give and impact a charity or ministry is so simple it is often overlooked, and that is regular committed giving. Many charities and ministries receive small one-time donations. Those matter a lot and are often the life-blood of a charity. But the donation that allows a charity to build a sustainable program of help or relief and meet the long-term goals and purpose of the charity is the donor who commits to a monthly donation that the charity can rely upon.
You can automate your donations through either a regular automatic check from an online checking account or from a Donor Advised Fund (DAF). Another terrific advantage of a DAF is security. A DAF like the DAF of the National Christian Foundation (NCF) is easy to set up and NCF checks on the charitable institutions to which you wish to donate. They have a huge list of great charities to which donations can be made if you are still looking. If you make your donations a part of your monthly and annual budget, you allow the charity to make that income a part of its budget. That makes planning and growth a lot easier and more effective. To learn more, click here.
No, you probably won’t “save the world.” But you can and should celebrate when you reach a giving goal and do your part in God’s kingdom work. The way to celebrate success is to define success so that it can be objectively measured. Aim for it and stay committed.
About the Author
John Campbell has retired from a 40-year legal practice as a trial attorney in Tampa. He has served in multiple volunteer roles at Idlewild Baptist Church in Lutz, Florida, where he met Jesus. He began serving as the Executive Director of the Idlewild Foundation in 2016. He has been married to the love of his life, Mona Puckett Campbell, since 1972.