How Will Donors Know That Your Charity Isn’t Just Another Fraud?

Nonprofit fundraising scams are always in the news, but I feel like there’s been an uptick in the last couple of months — the church in Oakland that makes its students spend evenings in local BART (subway) stations soliciting donations for questionable purposes; the woman in Canandaigua, New York who was charged with raising money on the false pretense of having cancer; and ABC reports about fraudulent charities trying to make money off recent tornado disasters.

It’s enough to scare off any donor.

Which raises the question, what is your nonprofit doing to make sure that any and all of its fundraisers and other representatives can prove that they’re legit? Here are some ideas:

  • Be very clear about your group’s identity. Display its name and logo on your website, brochures, and any solicitation sheets that you might, for example, send out with people soliciting donations on the street or of friends. If you are the local chapter of a national group, say so, and indicate where they can find your group online or in the real world.
  • Be transparent about your group’s use of money. Your website, for example, should contain clear explanations of where and how funds will be spent. Also include a link to your group’s IRS Form 990.
  • Give official materials to staff or volunteers who will be doing public solicitations. The more they carry in the way of pamphlets, log0-bearing paraphernalia, and so on, the more convincing they’ll be. Of course, these can be faked; but at least you won’t have to compete with the low-quality fakes.
  • Be aware of local scammers. It’s not uncommon for scam charities to use names that sound generic, or very close to the name of a real group. Watch the news and neighborhood events for such fake groups, and be ready to assure people that they aren’t you.
  • Advise solicitors to welcome questions. Having a stranger question whether you’re a fraud can be unsettling. But your fundraising team should be trained for this, and be happy at the opportunity to distinguish your group from the scammers.
  • Don’t incentivize immediate donations. Some groups reportedly pay their street solicitors based on a percentage of contributions brought in. Unfortunately, that means that potential donors are discouraged from double-checking on the group and deciding later whether to make a donation. This arrangement leads to uncomfortable donors who may just say “no” if pulling out their credit card on the spot and handing it to a stranger seems too risky.

This problem may have been worsened with the down economy, but it’s never going to go away. The best you can do, in the words of yet another nonprofit, is to “Be prepared.”