Thursday, November 23, 2017
Opinion

Column: Tools for giving wisely

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Donating to charity is a very personal decision. It is a transaction that the donor often connects with on a much deeper level than the normal purchase of goods or services.

Donors often walk away with a sense of enjoyment at the idea that they were able to make a difference in the lives of the recipients. But when it is discovered that their generous gift was abused, that feeling is quickly replaced with disappointment, anger and possibly even nausea.

During the past three years, I've taught an undergraduate honors course on philanthropy that required students to give away a total of $320,000 to 15 nonprofits. Students understand the difficulty of choosing the right 15 after examining case studies of corrupt charities. The case study assignment is my students' wake-up call.

The recent publication of "America's Worst Charities" by the Tampa Bay Times, the California-based Center for Investigative Reporting and CNN serves as a valuable wake-up call for donors of all types — from the $25 young, first-time giver to philanthropists with large capacities to give.

Every page of the report provides moments of horror. Detailed are examples of creative accounting; an expensive overreliance on for-profit, third-party telemarketing; an overall lack of transparency; lying, misleading and high-pressure tactics; and conflicts of interest.

The charity heads who lie and swindle win significantly in this story. The donors and the intended charitable causes are losers, as well-intentioned gifts primarily fund exorbitant administrative costs and line personal checking accounts.

Yet, there is some good news in the report.

First, people want to give and care about helping people. In the past decade they've donated more than $1.3 billion to these 50 charities. Second, while the government may be slow to respond, donors can take immediate action by performing effective due diligence and giving more wisely.

Never have donors had so many tools at their disposal to combat charities that prey on donor sympathy. Here are five suggestions for donors looking to give more wisely:

Know your causes and why you want to help. Many of the worst charities rely on catching donors off guard with emotional, heartfelt stories followed by overaggressive pressure. I've actually had a telemarketer accuse me of not caring about civil servants because I said no to making a charitable contribution (this charity is on the list!).

Donors can prepare for this contact by defining why they want to give and to whom they would potentially give. It's the donor's money, and donors should know how they want to give and how they want their money to address a cause or problem.

This takes time and self-reflection, but donors who predetermine their top causes and can identify three to four organizations that they are willing to support protect themselves from being caught off-guard when one of the worst charities comes calling.

Ask specific questions and probe for information. Due diligence — a thorough investigation — is key to giving wisely. Donors should know more than the cause or charity. Donors should ask for the charity's full name and main office address, for an explanation of how the donated funds will be used specifically (Who I am helping? What program will my funds specifically support?), the name and role/professional occupation of the person making the request and the name of the CEO. Finally, make them prove to you that their organization works on a detailed level.

All organizations should be able to provide this information. If they can't or hesitate, that's a red flag.

Use the Internet to perform due diligence. When it comes to researching charities, the Internet is the donor's best friend. Guidestar (www.guidestar.org) and Givewell (www.givewell.org) are only two of many sites that evaluate charities.

Websites like these have scoured the tax documents of charities to provide relevant information ranging from transparency ratings to naming organizations that are making a difference. Essentially, they've done much of the work for the donor who wants to check on a charity.

Donate on your schedule and build a relationship. The money is the donor's, and the donor has the right to give when he or she feels comfortable. All charities know this.

Ineffective charities will often pressure a donor to give quickly because they have something to hide. Charities who are effective are willing to wait and provide whatever information a donor needs — including an expenditure report — to make a timely decision. For effective charities, the process is about building a relationship: They see donors as more than one-time givers.

See if you can get involved beyond giving. Effective charities want donors who care and who will give consistently over time. They welcome donors who want to get involved with programs as volunteers because that involvement leads to greater commitment.

The lowest common denominator shared by these 50 organizations is that they bank on sympathy. They know many donors will almost immediately give from trusting hearts before ever checking the organization. They think if it feels good, then giving the gift must be right.

When donors research organizations before making a gift, they are making a transformational decision that will help put an end to the abusive practices that bankroll America's worst charities.

Ronald Pitcock is director of prestigious scholarships at Texas Christian University, and teaches The Nature of Giving Honors course. He wrote this exclusively for the Tampa Bay Times.

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