Wise Giving Wednesday: Fundraising Events for Hurricane Florence Disaster Relief

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calendar icon Jul 17, 2020

Last week we provided advice for donors about Hurricane Florence relief. While Hurricane Florence has passed, many of the areas impacted by flooding from the storm are still under water. As there is still a need to raise funds for recovery, we will likely see a variety of fundraising events seeking to help homes and businesses that have been severely damaged. As these activities emerge, we offer the following to help avoid some of the common fundraising mistakes made in the wake of disasters.

Fundraisers Should Seek Permission to Use the Disaster Relief Charity’s Name.  Musicians, television stations, businesses or other groups that decide to hold some type of fundraising event to raise money should get permission, in writing, to use a specific charity’s name before holding the event on their behalf. In most cases, these names are service-marks owned by the subject charity. In addition, the charity will likely have certain requirements to help protect the charity’s brand image and to help ensure that potential donors are properly informed about how the money will be used.   

Ticket Sale Disclosures on Deductibility. If the fundraising event involves selling tickets to a concert or other performance, the IRS has certain disclosure rules for sales exceeding $75. That amount triggers the IRS requirement to provide a written disclosure that identifies the amount of the sale that exceeds the fair-market-value of the item. Only that portion is deductible as a charitable gift for federal income tax purposes. For example, if the show sells benefit tickets for $125 each for a performance that would normally sell for $100 each, then only $25 of the purchase is deductible.

Watch Out for 100% Claims in Fundraising Event Promotions. It costs money to raise money. All fundraising events will incur some expenses. Even a credit card transaction will incur a processing fee. If a disaster fundraising event is stating that 100% of collected funds will go to the charity, watch out. The promotion may either be misleading or omitting a material fact. If someone else is covering the expenses to hold the event, the organization should take the initiative to explain the circumstances in the promotion.

Cause-Related Marketing Disclosures.  Another popular fundraising alternative in the wake of a disaster is for a business to sell consumer items (ranging from t-shirts to canned goods) with the announcement that the purchase will help a specified disaster relief charity. If so, BBB Charity Standards require that the promotion disclose the actual or anticipated portion of the purchase price that will go to the charity (and, if applicable, the term of the campaign and any maximum or guaranteed minimum contribution amount). The business should also have a written agreement with the charity that gives them permission to use the charity’s name in this sales context.

Transparency on Results. Disaster relief fundraising events usually generate significant public attention. It is best to be transparent and post results about how much was raised, expenses incurred, and the resulting amount provided to the charity. This openness is expected by donors and will help strengthen trust for any subsequent or similar events held.

For more information on Disaster Relief fundraising issues, view the following IRS Publication: https://www.irs.gov/pub/irs-pdf/p3833.pdf

Video of the Week
As part of our Building Trust Video Series, we are pleased to provide a video of Carolyn Aldige’, Founder and CEO, Prevent Cancer Foundation (a BBB Accredited Charity) which provides support for cancer research, education, community outreach, and advocacy. The organization reports that it provides funding for cancer prevention research and training to more than 450 scientists across the country. PCFs public education program applies this scientific knowledge to inform the public about ways they can reduce their cancer risks. The organization reaches the public through exhibits, distribution of materials, its relationship with the media, and through educational conferences for professionals in the cancer field.  

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:

Finally, remember to let us know by going to https://give.org/ask-us-about-a-charity1/ 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

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