You hear about it every so often: individuals who create fake charities and steal money from people who believe they are donating to worthy causes.
On Oct. 19, a Michigan man was sentenced in Anchorage to 13 years in prison for crimes including stealing money from Alaskans and others who thought they were giving to help veterans and the disabled. In this case the individual was very sophisticated and took deception to a whole new level.
How can you protect yourself against such fraud when you make your donations?
The most important step is to know the organization you’re giving to. You can do this through several means:
- If you are giving to an Alaska nonprofit organization, get to know the nonprofit. You can visit the organization, meet the staff and see their services. You can visit their website and learn the names of board and staff members. In our small state you may well know these individuals and be familiar with the people who benefit from their services. ACF works with hundreds of nonprofits in Alaska and can be a good resource for you.
- Find out if the organization is a legitimate 501(c)(3) nonprofit in good standing. If you have a Donor Advised Fund with ACF and wish to make a grant recommendation to a nonprofit, we will do the research for you.
- Otherwise, you can use GuideStar’s services (some of which are free) to find out information about the nonprofit, including:
o Complete address, phone, website, and contact information
o All revenue and expense data for the current year
o Balance sheet data up to 5 years
o Forms 990 up to 3 years
o Annual reports for all years provided
o Full listing of CEO, board chair, board members
- Consider giving to an organization that is qualified to accept Pick.Click.Give. donations. There are more than 600 Pick.Click.Give. participating nonprofits, and each of these organizations have been vetted through a rigorous application process that includes proof of an IRS 501(c)(3) tax exempt determination letter, audited financial statements and audit report (if the organization has a $500,000+ budget), and an IRS Form 990. You can give to these organizations through Pick.Click.Give. or through direct donations.
- If a donation request comes from a group claiming to help your local community (for example, local police or firefighters), ask the local agency if they have heard of the group and are getting financial support.
Other things to keep in mind
- Find out if the nonprofit organization endorses the Donor Bill of Rights
as The Alaska Community Foundation does. Included in the Donor Bill of Rights are the rights of donors to be informed whether those seeking donations are volunteers, employees of the organization or hired solicitors; and to have the opportunity for their names to be deleted from mailing lists that an organization may intend to share.
- Make an annual plan for your charitable donations so you generally know in advance the organizations that will benefit from your philanthropy.
- Never feel pressured to give a donation on the spot. You always have the right to consider the request being made of you, and to ask for full contact information so you can research the organization, and follow up as you see fit.
The Federal Trade Commission provides a helpful “signs of a charity scam,” and a charity checklist.
The Alaska Community Foundation is honored to work with donors in Alaska who wish to make a difference through effective, local philanthropy. If you have any questions or wish to speak with someone about philanthropic giving in Alaska, please contact Dawn Carmichael at 907-249-6646 or Beth Rose at 907-249-6611.