Monday, June 20, 2016

State Attorneys General Urge Caution When Donating in Response to Orlando Massacre with UPDATE

Seal_of_the_Attorney_General_of_IndianaAnticipating an uptick in charitable giving, some state Attorneys General (e.g., Indiana and Ohio) urge caution before donating to charity, and supply the following tips:

  • Evaluate charities using information from AG offices, IRS filings, and other resources such as Charity Navigator* (UPDATE: see below) or Guidestar
  • Beware of sham charities & look-alike sites:  some appeals will use similar names to well-established nonprofits
  • Be cautious of newly-formed charities:  may lack the experience to properly or effectively handle donations
  • Investigate how your donation will be used:  look for destination of funds and what percentage will benefit specific charitable purpose
  • Stay away from crowdfunding or peer-to-peer fundraising:  state law typically prohibits soliciting donations on behalf of a charity without charity's prior consent

It is good to be prudent, but do these consumer alerts discourage charitable giving? Are there any tips that you would add or eliminate to the list? (Note that these "tips" go beyond law and offer the Attorney Generals' views on best practices for charity, without distinguishing between law and opinion, the latter of which might not be shared by everyone.)

Editor’s note: A national organization with broad knowledge about local operations of charitable organizations privately shared that Charity Navigator only rates a small number of nonprofits but many people don’t realize this and assume that if a nonprofit is not listed, it is not recommended. Additionally, Charity Navigator has itself acknowledged the downsides of analyzing overhead ratios as a method of rating a charity’s effectiveness, but continues to use a methodology that places emphasis on administrative costs. Consequently, the national organization recommends that donors ideally should get to know the nonprofit first-hand, and learn more by reading about the nonprofit on


Current Affairs, State – Executive | Permalink


*Charity Navigator rates 8,000 charities which accounts for 1/2 of all donations. It also has a listing, just like Guidestar, on its site for every nonprofit in America. So, even if a group isn't rated by Charity Navigator, donors can still review information about the charity on Charity Navigator's site - all for free.
*Charity Navigator's ratings don't JUST look at overhead, but 7 financial health metrics as well as 17 accountability and transparency metrics.
*Charity Navigator also has a Donor Advisory and Watchlist system that helps donors avoid charities that have made major ethical or legal missteps.

Posted by: Sandra Miniutti | Jun 23, 2016 11:13:46 AM

I believe your bullet point title, “Stay away from crowdfunding or peer-to-peer fundraising” is a much more wary and negative statement than the issue as expressed by the state charity regulators, in which they suggest exercising caution when donating through fundraising platforms, such as by reviewing the website terms of use or FAQ to understand whether an individual or a legitimate charity will receive the donations, and whether the platform has taken appropriate steps to build in protections against potentially fraudulent campaigns (a point the National Association of State Charity Officials made in an earlier statement published regarding fundraising platforms -

The reality today is that even the largest and most reputable charities are utilizing and benefiting from a variety of fundraising platforms to help drive public engagement and donations. Fundraising platforms provide the latest technologies and social engagement tools that many charities could not afford to develop and implement on their own. In fact, some of the primary (and well-respected) nonprofits receiving donations following the Orlando tragedy are specifically choosing to utilize crowdfunding platforms through which to focus their fundraising efforts. I agree that it is important for donors to do their research to understand how fundraising platforms work before they donate through them, but I think your “warning” to “stay away” from them should be revised to a more nuanced and appropriate explanation of the key considerations for donors as they make their giving decisions.

Posted by: Karen Wu | Jul 5, 2016 11:06:20 AM

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