|
In
response to the unimaginable destruction caused by the recent tsunami
disaster the spirit of charity and generosity displayed throughout the
world has been magnificent. The
tragedy showed us the best of humanity, as millions responded to the
desperate needs of victims. Unfortunately
it also showed us the other side, as opportunists sought to turn public
generosity to their personal gain. Donors
rightfully want to know that their money is serving the purpose they
intend.
The
international concern following news of the tsunami resulted in
unprecedented donations. Within
three days the American Red Cross in
Washington
had received $18 million. Within
two weeks charities in the
U.S.
had raised nearly $340 million. By
January 10th nearly one billion US dollars had been pledged to
organizations participating in the United Nations Tsunami Relief Plan,
including $144.5 million for the UN Children’s Fund and $252.4 million
for the World Food Program.
The
weeks following the disaster also witnessed a more disturbing trend:
widespread fraud. This was so
pervasive that many sources, including the
U.S.
government, publicly disseminated information on how to ensure donations
were being given to legitimate organizations.
Arrests have already been made in several countries, including
Australia
,
Canada
,
England
, and the
United States
.
This
does not need to check the flow of generous giving by those seeking to
help, but it does give donors the responsibility of being sure who is
receiving their money and how it is being spent.
Goodwill donors need not imagine that being careful in any way
brings their generosity into question.
On the contrary, given the scams and cheats out there, donors ought
to proceed with caution. They
have the right to confirm an organization’s legitimacy, and there are
steps they can take to do this.
The
Association for Fundraising Professionals (AFP) offers the following
suggestions for avoiding fraudulent organizations when giving:
-
When
giving at a website, make sure the site is secure and that your
personal information cannot be seen or stolen by others.
Make sure the website itself is legitimate; sometimes scam
artists use similar but slightly different names or domain names.
-
When
giving via the phone, obtain a phone number for the charity and call
the number to ensure the number is legitimate.
-
Be
aware of organizations with similar sounding names.
‘United Wayfarers’ for example, sounds similar to ‘
United Way
’ but it may be a completely different charity or simply a
fraudulent organization.
-
Be
suspicious of callers and organizations that talk about having ‘tax
i.d. numbers’ or other official-sounding information.
Lots of organizations have ‘tax i.d. numbers’ but that
doesn’t mean they are charities.
-
Do
not give to an organization that promises to have a driver come
immediately to your home or office and pick up a check.
That’s usually a sure sign of fraud.
-
Report
suspicious activity to your local police and/or state Attorney
General’s office.
It
is important to note that despite concerns, fraud is the exception.
As Paulette V. Maehara, AFP President and CEO, said “Ninety-nine
percent of the organizations who are working on tsunami relief efforts,
even those you haven’t heard of, are legitimate.”
Donors
should also be concerned about how their contributions are used.
The donor has the right to specify what their gift is to be applied
towards – this is best done in writing, as well as the right to an
organizations financial report and tax identification number.
The latter, while not proving an organization’s legitimacy, is
necessary tax-deductions are to be claimed.
Again
there are steps donors should take to be sure their gift is directed as
they intend. They should
confirm that charitable organizations have experience in administering
aid, and have a specific action plan stating when, to whom and in what way
the financial gift will be utilized.
It
must be recognized that aid organizations necessarily encounter many of
the costs associated with a for-profit business, including administrative,
operational and marketing outflows. Not
every dollar you give equals one dollar applied toward the purchase of
food, clothing or shelter for the tsunami victims.
The Charities Aid Foundation (CAF) in
Britain
determined that among top charities 9% of income is spent in further
fund-raising. Feed the
Children’s programs are said to get only 19% of the money the
organization gathers – about 60% go into promotion and fund-raising.
This is necessary because charities essentially compete for your
donation.
Because
of the great outpouring of donations following the tsunami, some charities
faced the rare and pleasant trouble of receiving more than they could
administer. The disaster is
so vast that many aid agencies simply don’t have the capacity to address
a crisis on this scale. In
this case, according to CAF, all of the aid directed toward the tsunami
victims will be administered within three years, and half within the first
year. Money that you give
today may be spent on infrastructure two years from now.
The
issues of transparency and accountability in the financial management of
non-profit organizations are now at the forefront.
Aware of this, many conscientious organizations are promoting these
principles. Doctors Without
Borders (Medecins Sans Frontieres) acknowledges:
“We have an ethical obligation to explain the use of funds raised
by MSF for the tsunami relief and to ensure that we use all funds for the
purpose for which they were raised.”
To manage the large amounts directed toward UN organizations, the
humanitarian relief office of the UN has put in place measures to ensure
responsible financial management, and has involved accounting firm
PriceWaterhouseCoopers to audit cash contributions.
PWC will have to monitor gifts to as many as 40 U.N. agencies and
many more private organizations. Laurence
Cockcroft, the chairman of Transparency International's office in
Britain
, said that aid "should be spent as effectively as possible, and
should be open to scrutiny from both existing national audit offices and
civil society." These
standards are agreed upon in theory, but many agencies do not practice
them effectively, and it is often difficult for potential donors to
determine where their money is best directed.
There
are thousands of charitable organizations in
America
alone, and the number has doubled in the past 15 years.
Choosing the right recipients of your giving can be difficult.
There are now various resources available to donors to assess
organizations, though there is no single source that includes them all.
Some of the most valuable include:
www.give.org
Wise
Giving Alliance, affiliate of the Better Business Bureau - measures about
500 national charities every two years according to a set of standards
that include accountability and transparency.
www.charitywatch.org
American
Institute of Philanthropy – gives “grades” to hundreds of
organizations based partially on how much they actually spend on programs
versus fund-raising and administration.
www.reliefweb.int
UN
Office for the Coordination of Humanitarian Affairs (OCHA) – global
information hub on current humanitarian needs
resulting from emergencies and natural disasters.
www.usafreedomcorps.gov
The
federal government of the
US
– promotes opportunities for service by providing the public with access
to information about service opportunities; and provides recognition and
award to participants in service programs.
This site currently lists legitimate agencies accepting donations
on behalf of victims of the tsunamis.
With
these tools and awareness of donor rights and recipient obligations, those
hoping to make a difference are better assured of doing so.
|
