Format: Article

It’s the holiday season, two weeks left in the year, and a popular time to make last minute donations. While the spirit of giving is inspiring many of us to contribute, especially in these trying times, donors as well as charities should also watch out for potential pitfalls and holiday hustles that can take advantage of heartfelt generosity. Although the vast majority of charity appeals are honest and responsible, questionable solicitors see this time of year as an opportunity to deceive. Here are some examples to help avoid deceptions.

Deceptive Drop Boxes
Some families that are short on cash this season, may be thinking of helping charities in other ways, such as donating used clothing. The presence of metal bins that collect used clothing is a common sight in many retail store parking lots. But if you assume that all of them are placed by charities, think again. A report from a CBS TV station in New York found bins that were not affiliated with any charity. So, before you make a clothing donation, check out the charity named on the collection box and visit Give.org to see if there is a BBB Charity Report specifying if the organization meets the BBB Charity Standards. Also, check with your state government’s charity registration office which is usually a division of either the office of the Attorney General or the Secretary of State. About 40 of the 50 states require such charity registration. In Canada, check with the Canada Revenue Agency.

Email Compromise Fraud
You’re working from home and you receive an urgent message that appears to be from your boss asking you to get some gift cards or make some other immediate financial transaction (such as a wire transfer) to send to a designated charity contact (or some other entity). Always double-check such messages by calling your boss or sending them a separate email to verify that this request is genuine. This type of message could be something known as email compromise fraud that can take a variety of forms but is intended to get funds forwarded to a scammer. It’s a good idea to establish payment procedures that would help stop such scams, such as processes for authenticating payment requests that scammers won’t know about.

Lousy Links
Con artists are using more sophisticated techniques to get email recipients to click on links to download viruses and/or provide them with controls that can compromise computer systems. A good rule of thumb is not to click on any links in an email even if the message appears to be individually tailored for your interest. For example, just yesterday, BBB Wise Giving Alliance received an email claiming to provide a comment on a previous Wise Giving Wednesday blog and provided a link to access the remarks. Turns out clicking on the link would have downloaded a virus. Office staff should be trained to recognize phishing attempts and know how to handle them.

Phishing for a Forgery
Charities routinely are invoiced from their vendors, just like for-profit businesses. As reported in the NonProfit Times earlier this month, however, a Philadelphia hunger relief organization was scammed out of $923,533 due to a “spoof email that mimicked an invoice from a construction company.” While the organization indicated it has since implemented additional controls to prevent such a significant error, the lesson learned is that hucksters can create messages that appear in very convincing forms that can fool recipients. Internal staff procedures for validating and authorizing invoice payments can help prevent such scams.

Con Artist Calling
Like any form of fundraising, telemarketing can be used in appropriate ways to help raise charity funds but can also be an instrument of deception by con artists seeking to take advantage of a generous recipient. Some red flags to watch out for in donation calls include the claim that you previously contributed to the charity when you have no recollection of such a donation, and pressure to make an immediate contribution. Honest charities will welcome a gift later after you had the chance to find out more about the group by visiting its website and checking with outside sources such as Give.org. Don’t give in to pressure to make an on-the-spot donation.

For more information, visit the resources on Give.org. If you believe you have been the subject of a charity scam, visit BBB ScamTracker, and when posting, select “charity” on the entry for Type of Scam.

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Video of the Week

As part of our Building Trust Video Series, we are pleased to provide a video featuring Maya Ajmera, President and CEO, Society for Science and the Public (a BBB Accredited Charity) an organization that works to expand scientific literacy, STEM education, and scientific research.  The organization also publishes Science News magazine, which includes science-related journalism, editorial content and educational products.

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Recent Reports

We are always working with charities to publish or update reports for donors. Visit Give.org or local BBBs to check out any charity before giving. Our recently evaluated charities include:

• Bike and Build
• Brennan Center for Justice
• VHL Alliance

Finally, remember to let us know by going to www.give.org/charity-inquiry if you are interested in seeing a report on a charity not on the list and we will do our best to produce one.

H. Art Taylor, President & CEO
BBB Wise Giving Alliance

The 2019 edition of the Internal Revenue Service Data Book, which is an annual publication of statistics about returns filed, contains a table which shows the number of tax-exempt organizations. Section 501(c) of the Internal Revenue Code includes 20 different categories of tax-exempt organizations (including, but not limited to, labor unions, lobbying organizations, business leagues, recreation clubs, fraternal groups, benevolent life insurance companies, etc.). For 2019, the IRS reports that the combined total number of organizations under this 501(c) category was 1,718,233.

The largest of these categories in terms of the number of organizations, is section 501(c)(3) which covers charitable organizations. The IRS reports that in 2019 there were 1,365,744 organizations that were included in this 501(c)(3) charitable tax-exempt status. That total represents 79% of the combined total number of 501(c) groups referenced above. The total number of charities is actually higher than this figure since it does not include houses of worship as well as small organizations (with gross revenues less than $5,000) which are both not required to apply for 501(c)(3) status in order to have charitable tax-exempt status.

The information in the IRS Data Book for the past five years, shows the total average gain in the number of 501(c)(3) organizations has been about 36,000 charities per year. This average increase incorporates newly formed organizations and reflects subtractions of those that have either lost their exempt status or ceased operations: 

Number of 501(c)(3) tax-exempt charities

2015      1,184,547
2016      1,237,094
2017      1,286,181
2018      1,327,714
2019      1,365,744

(For those interested in accessing statistics about charities in Canada, see the following report produced by the Canada Revenue Agency.)

Although the increase in the number of charities creates a growing number of contribution choices for donors, it also helps generate new approaches to problems and issues. Also, we believe the 20 BBB Standards for Charity Accountability provides helpful guidance for both new and existing charities and also helps donors identify trustworthy organizations.

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Video of the Week

As part of the Building Trust Video series, we are pleased to provide a video interview that features John Walker, CEO of SOAR365, a BBB Accredited Charity based in Richmond, VA that helps families and individuals cope with the challenges of living with a disability.  They offer services such as home pediatric therapy for infants and toddlers and day programs that help develop social, behavioral, physical and cognitive skills.

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Recent Reports

We are always working with charities to publish or update reports for donors. Visit Give.org or local BBBs to check out any charity before giving. Our recently evaluated charities include:

• Aga Khan Foundation USA
• FOCUS North America
• Meals on Wheels America

Finally, remember to let us know by going to www.give.org/charity-inquiry if you are interested in seeing a report on a charity not on the list and we will do our best to produce one.

H. Art Taylor, President & CEO
BBB Wise Giving Alliance

 

Recently, the U.S. Internal Revenue Service sent a reminder notice about tax deductions for charitable contributions made in 2020. Cash donations of up to $300 made this year will be deductible for individuals when they file their taxes in 2021 even if they don’t itemize on their tax returns. So, if tax payers decide to take the standard deduction, they will still be able to deduct up to $300 and lower their taxable income by that amount. This change in the tax law was included in the Coronavirus Aid, Relief and Economic Security (CARES) Act that was passed earlier this year. This deduction is for contributions made by check, credit card or debit card but does not include donations of securities, household items, clothing or other in-kind gifts.

Two years ago, when the standard deduction was raised to $12,000 per individual or $24,000 per couple, many felt that this would result in fewer households contributing since there would be less incentive to itemize on tax returns. In 2019, these deductions were increased to $12,200 and $24,400 respectively. As reported in a previous Wise Giving Wednesday, results were mixed with smaller charities experiencing donation reductions while larger ones saw growth.

Even if you did not have a chance to participate in GivingTuesday which took place on December 1, you still have an opportunity to donate in 2020 and take advantage of this special $300 tax benefit. Of course, we hope donors will also take the time to visit Give.org to verify if the organization is a BBB Accredited Charity (i.e., meets the 20 BBB Standards for Charity Accountability.) If one has other questions on charity tax deductibility, see the latest version of  IRS Publication 526, Charitable Contributions. Here is a link to the 2019 edition. 

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Video of the Week

This week’s video is a message asking that you consider supporting BBB’s Give.org this holiday season.  

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Recent Reports

We are always working with charities to publish or update reports for donors. Visit Give.org or local BBBs to check out any charity before giving. Our recently evaluated charities include:

• Civil Air Patrol
• Guiding Eyes for the Blind
• National Urban League

Finally, remember to let us know by going to www.give.org/charity-inquiry if you are interested in seeing a report on a charity not on the list and we will do our best to produce one.

H. Art Taylor, President & CEO
BBB Wise Giving Alliance

If there has ever been a year when charitable need was at its highest, 2020 surely rises to the top. We also are aware that as we celebrate Thanksgiving, the heart of the holiday giving season has arrived. GivingTuesday takes place on the Tuesday after Thanksgiving in the U.S. This donation promotion was started by the New York-based 92Y in 2012 (but is now a separate charitable organization) that evolved into a “global generosity movement.”  Giving Tuesday reports it has cumulatively helped raise billions of dollars for online charitable giving worldwide in more than 60 countries.

If you participate on GivingTuesday on December 1st, BBB Wise Giving Alliance urges donors to check our charities on its Give.org website to ensure that contributions are going to trustworthy organizations. Our detailed, standards-based charity evaluations provide donors with information to help them make wiser giving decisions.

BBB WGA is sharing five tips to help donors give wisely and make the most of their generosity this holiday season. 

1. Watch out for mistaken identity. When charities seek support for the same cause, their names are often similar. Before you give, be sure you have the exact name of the charity to avoid a case of mistaken identity.
2. Avoid on-the-spot donation decisions from unfamiliar organizations. Typically, the holidays bring a higher frequency of donation requests. Don’t succumb to pressure to make an immediate giving decision. Responsible organizations will welcome your gift tomorrow as much as they do today.
3. Be wary of overly emotional appeals. If an appeal brings tears to your eyes, make sure it is also clear about the charity intends to do to address the issues. Always research to verify that your selected charity operates ethically.
4. Be cautious about charities that don’t disclose. Although charity participation in BBB reporting is voluntary, charities that don’t disclose any of the requested information to BBB WGA raise a critical red flag for donors. Visit Give.org to find out if your selected charity is nondisclosure.
5. Rely on standards-based evaluations. Charities that are found to meet the 20 BBB Standards for Charity Accountability are helping to demonstrate their trustworthiness. Get free access to charity reports at Give.org.

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Video of the Week

As part of our Building Trust Video Series, we are pleased to provide a video featuring Linda Webb, Executive Director, Ally’s House (a BBB Accredited Charity) that provides financial assistance to the families of Oklahoma pediatric cancer patients. The financial assistance covers expenses such as medical costs, housing, transportation to and from treatment, and household utilities.  It also sponsors a summer camp for patients between the ages of 9-17. 

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H. Art Taylor, President & CEO
BBB Wise Giving Alliance

Last week, BBB Wise Giving Alliance released the latest edition of the Give.org Donor Trust Report. Since this is the third year we produce the report, this edition included a retrospective on trends observed in our surveys.  One significant shift is the reduced importance placed by donors on financial ratios as a top signal of trust. Specifically, the portion of respondents who say they rely on financial ratios as a top signal of trust decreased from 35% in 2017 to 19% in 2020.

Financial Ratios as Top Signal of Charity Trustworthiness:

• December 2017     35%
• December 2018     30%
• December 2019     28%
• August 2020     19%

When asked what most signals that a charity is trustworthy, the top factors in August 2020 were:

• Third-party evaluation     36%
• Charity name recognition     34%
• Accomplishments shared by the organization     30%
• Opinions expressed by friends & family     21%
• Financial ratios     19%

BBB Wise Giving Alliance has long maintained that excessive focus on any one factor, like overhead spending, can be misguided and harmful to a charity’s capacity to thrive. We remind donors that assessing a charity’s trustworthiness takes both a keen eye and a broad view. The BBB Standards for Charity Accountability, for instance, consider adequate board oversight, how funds are spent, appeal accuracy, accomplishment reporting, and transparency. Each component can factor into donor considerations, but no single factor is enough to make a complete assessment.

About seven years ago, BBB Wise Giving Alliance joined with GuideStar (now known as Candid) and Charity Navigator to issue an open letter to donors, The Overhead Myth, that urged them not to solely rely on charity financial ratios when deciding which charities to support. However, it also pointed out that “at the extremes the overhead ratio can offer insight: it can be a valid data point for rooting our fraud and poor financial management.” In the ensuing years, we have continued to make this point in our outreach to the donating public.

It is likely that a combination of factors influenced this change in donor attitudes, but we would like to believe that we were a part of this shift and hope that contributors will continue to take a more complete view of a charity’s accountability.

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Video of the Week

As part of our Building Trust Video Series, we are pleased to provide a video featuring an interview with Haroon Shaikh, President of SUIT North America (a BBB Accredited Charity) that seeks to provide medicines and equipment to non-profit hospitals and institutions dealing with kidney diseases, dialysis and end stage renal diseases. SIUT North America reports that its major focus is on helping SIUT Pakistan secure necessary funds for medicines, treatments and equipment. The organization reports that all SIUT patients are treated free of charge and without discrimination. In addition SIUT reports that it helps other organizations in the U.S. through voluntary services and donations.

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Recent Reports

We are always working with charities to publish or update reports for donors. Visit Give.org or local BBBs to check out any charity before giving. Our recently evaluated charities include:

• American Jewish Committee
• Military Child Education Coalition
• USO

Finally, remember to let us know by going to www.give.org/charity-inquiry if you are interested in seeing a report on a charity not on the list and we will do our best to produce one.

H. Art Taylor, President & CEO
BBB Wise Giving Alliance

On Veterans Day we think of those who served in the U.S. Armed Forces. Some donors will choose to honor this day by contributing to charities that address a variety of issues and needs facing veterans, military service members and/or their families. To help contributors make wise giving decisions, BBB Wise Giving Alliance offers the following advice:

• Avoid Mistaken Identity. Some veterans charities include the same words in different order or slightly different form. So, be alert and make sure the organization you are considering is the one you want to support.
• Find Out What They Do. Don’t assume what the veterans organization does based on their name alone. Look for a clear description of the organization’s programs in its appeals and on its website.
• Be Careful with Phone Appeals. If not managed properly, some telemarketing campaigns for veterans organizations can be an expensive way to raise funds with very little going to the organization. If called, do not hesitate to ask for written information or visit the group’s website to find out about its programs and finances before making a giving decision.
• Watch Out for Excessive Pressure.  Don’t be pressured to make an immediate on-the-spot donation to a veterans organization. Charities should welcome your gift whenever you want to send it.
• Ask How Donated Items Will Be Used. Find out how the charity benefits from the collection and resale of used clothing and other in-kind gifts. Sometimes the charity receives only a small portion of the resale price of the item or may have a contractual arrangement to get a flat fee for every household pick-up, no matter what the contents.
• Check Give.org: In addition to charity reports on BBB’s Give.org, check with your state government’s charity registration agency, usually a division of either the Attorney General’s office or Secretary of State’s office. In Canada, check with the Canada Revenue Agency.

This list shows veterans and military service charities that meet all 20 of the BBB Standards for Charity Accountability (i.e., BBB Accredited Charities.) Click on the report links to access reports on each group.

• America’s VetDogs – The Veteran’s K-9 Corps
• Armed Services YMCA of the USA
• Blinded Veterans Association
• Boot Campaign
• Boulder Crest Retreat Foundation
• Children of Fallen Patriots Foundation
• Coalition to Salute America’s Heroes Foundation
• Code of Support Foundation
• Corporate America Supports You
• Disabled American Veterans
• EOD Warrior Foundation
• Homes for Our Troops
• Honor Flight Network
• K9s for Warriors
• Marine Corps Scholarship Foundation
• Military Spouse Corporate Career Network
• Military with PTSD
• Soldier’s Angels
• Team Red, White & Blue
• Travis Manion Foundation
• USO
• Veterans of Foreign Wars National Home for Children
• VFW Foundation
• Wounded Warrior Project
• Wounded Warrior Family Support

While the U.S. has been focused on the election, nature has reminded us of needs in other parts of the world. On Sunday November 1st, Typhoon Goni hit Luzon, the most populated island in the Philippines. As reported, almost 400,000 people fled or sought shelter in evacuation centers. Damage is extensive with many homes destroyed or impaired. With gusts of over 164 miles per hour, Goni has been labeled a Super Typhoon – the strongest tropical storm this year. For those seeking to make donations for relief efforts, BBB Wise Giving Alliance offers the following tips.

Look for Appeal Clarity. Seek out appeals that are upfront and clear about what disaster relief services you are supporting.

Give to Experienced Groups. Support experienced organizations that stand ready to provide quick and effective assistance. Be cautious of organizations that form overnight in the wake of a disaster.

Be Wary of 100 Percent Claims.Watch out for claims that 100 percent of donations will assist relief victims. The organization is probably still incurring administrative and fundraising expenses, even if it is using other funds to cover these costs.

Give Money Rather than Goods. Donating money is the quickest way to help and provides charities the flexibility to channel resources to impacted areas.

Rely on Expert Opinion. Rely on expert opinion when it comes to evaluating a charity. We recommend giving to charities that meet all 20 BBB Standards for Charity Accountability, found at BBB’s Give.org.

The following organizations are BBB Accredited Charities (i.e., meet the 20 BBB Standards for Charity Accountability) and currently have a website page that announces they are collecting funds to assist Typhoon Goni relief efforts.

American Red Cross – (BBB Wise Giving Alliance report)
Americares – (BBB Wise Giving Alliance report)
Catholic Relief Services  – (BBB Wise Giving Alliance report)
Direct Relief – (BBB Wise Giving Alliance report)
Global Giving – (BBB Wise Giving Alliance report)
Save the Children – (BBB Wise Giving Alliance report)

Video of the Week

As part of our Building Trust Video Series, we are pleased to provide a video featuring an interview with Andrea J. O’Neill, Executive Director, Lupus Research Alliance (a BBB Accredited Charity) which seeks to find better treatments and support medical research to ultimately prevent and cure systemic lupus erythematosus (SLE or lupus), a debilitating autoimmune disease.

Recent Reports

We are always working with charities to publish or update reports for donors. Visit Give.org or local BBBs to check out any charity before giving. Our recently evaluated charities include:

• Haiti Partners
• The Hunger Project
• International Centre for Missing and Exploited Children

Finally, remember to let us know by going to www.give.org/charity-inquiry if you are interested in seeing a report on a charity not on the list and we will do our best to produce one.

H. Art Taylor, President & CEO BBB Wise Giving Alliance

The wide diversity of charity missions and objectives is one of the charitable sector’s greatest strengths. For any cause you can consider, there can be hundreds of organizations seeking to address some aspect of the same issue. Whether it is saving the environment, feeding the homeless, researching cures for diseases or promoting religious beliefs, one can find different charities of all sizes and experience. This diversity, however, also can present some challenges as well, particularly when one seeks to address matters such as charity impact – identifying how well a charity is addressing its mission. While there are a variety of approaches to further define the meaning of charity impact, most efforts seek to describe a charity’s recent accomplishments, particularly in relation to the charity’s stated goals.

The diversity of charity missions also adds a time element – some charity activities are addressing immediate needs (such as emergency relief after a natural disaster) while others are engaged in activities that may require many years of efforts before the desired results are achieved (for example, addressing climate change or finding cancer cures). In other words, some charities, by their nature, are engaged in different types of goals that result in radical or immediate change while others are working hard but anticipate incremental change or small steps gained over a long period.

These time element differences are often overlooked for those seeking to review information about a charity’s impact. In addition, there is a tendency, especially among younger donors, to expect immediate results from their generosity. This cultural trend is evidenced, in part, by the popularity of such efforts as crowdfunding, where contributors can immediately see how their donation adds to achieve the announced fundraising goal.

In our view, charity impact is best considered when it is viewed in the context of the facts and circumstances of the specific charity being considered. This recognition is also reflected in Charting Impact a framework of five questions that organizations of all types, sizes and missions can use to describe what they want to achieve and what they have already accomplished. This framework was developed a number of years ago in a BBB WGA collaboration with Independent Sector and Candid (previously known as GuideStar). The completion of such a report is also a way for a charity to meet BBB Charity Standard 7.

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Video of the Week

As part of the Building Trust Video series, we are pleased to provide a video interview that features Jamie Amelio, founder and CEO, Caring for Cambodia (a BBB Accredited Charity) that seeks to educate a generation of Cambodian children today, to make a difference for Cambodia’s tomorrow. CFC reports that it provides education to 6,600 students at 12 preschools, 5 primary schools, 2 junior high schools and 2 senior high schools in Siem Reap, Cambodia. Classrooms are safe, modern and technologically equipped. The organization mentors and professionally trains teaching staff and funds supplies and other tools needed to teach.

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Recent Reports

We are always working with charities to publish or update reports for donors. Visit Give.org or local BBBs to check out any charity before giving. Our recently evaluated charities include:

• Boys Town
• Grameen Foundation
• Patient Advocate Foundation

Finally, remember to let us know by going to www.give.org/charity-inquiry if you are interested in seeing a report on a charity not on the list and we will do our best to produce one.

H. Art Taylor, President & CEO
BBB Wise Giving Alliance