Think Philanthropically

I’d like to wish all our readers a safe and healthy 2022. In the most recent column (December 2021), I included a few words of caution about the dangers of “charity fraud”. This resulted in a few people asking me to elaborate a bit. Nobody likes to be misled and we’ve all seen how easy it is to be fooled by online posts that pass themselves off as facts, or by sources that traffic in half-truths. Let’s examine the three most common ways that donors can be deceived. The first two are obvious whereas the third one will probably surprise you.

1. Fake charities – There has been considerable growth in the propagation of online solicitation for alleged charitable organizations that make a variety of unverifiable claims about their activities. The solution for prospective donors is to donate only to charities that they have researched.  Donating directly to local, highly visible charities that are engaged in causes that matter to a donor is the best strategy. Be highly suspicious of unregistered charitable appeals or donating through an intermediary organization. As donors, we should make careful decisions and avoid randomly giving to dubious appeals. When considering a donation to a charity that does international work it is best to carefully research the nature and methodology of the work. Make sure that it legitimately aligns with your goals as a donor. Some international aid organizations are unclear about they monitor the flow of funds from Canada to those in need.

2. Charities that hide their purpose – There are charitable organizations that very carefully avoid any specifics about their operations. They don’t lie, but they are far from honest and forthcoming. Some have fancy marketing campaigns with attractive advertising. One well-publicized charity invites support for “kids” but a cursory investigation by any donor can quickly uncover their hidden purposes and identify a questionable money trail. If a donor wants to support this organization, that is a donor’s prerogative, but the donor has a right to be fully informed. The solution is basic verification. With a few key strokes or a phone call, potential donors can gain insight. A donor can even avoid the confusion of giving unintentionally to an organization that has a name similar to that of well-established charities.

3. Charity ratings organizations – This is the surprise. The need for donors to feel confident about the impact of their donations has given rise to a new type of online balderdash in the form of self-appointed ratings agencies. Most of these ratings agencies purport to use a number of proprietary algorithms to assess the impact of charities. These metrics begin with numerous flawed assumptions about things like debt, administrative overhead and contingency funds. Undeterred by any real grasp of how operations work in a non-profit, these agencies present an incomplete picture that feeds a false narrative. The false narrative is that every charitable organization needs to have minimal overhead. Any accurate assessment of an operating charity includes developing a deep understanding of the service model of the charity and the nuanced local realities. For example, it is foolish to employ a set of metrics to evaluate a national organization that raises money for cancer research and apply the same model of measurement to assess a locally operating food security charity or a palliative care facility. Many of the charities that end up being highly rated will loudly trumpet their “rating”, even though they know better. Savvy donors will ignore opinions from these ill-informed sources and, instead, ensure that they do their own research.

Ultimately, as a donor, the best way to avoid being misled is to know exactly who and what you are donating to and donate very intentionally. Giving is a joyful thing! I wish you much joy in 2022.

Sam Watts is the CEO of Welcome Hall Mission  He is also the author of Good Work…Done Better

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