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Be charitable this season, but also be careful

MacKenzie Scott has achieved what no other philanthropist has. With no massive Gates Foundation-like staff to assist her, she sought out some of the neediest charitable groups in the nation and donated nearly $6 billion to them.

Six billion dollars. Think of that. Think of how much good can be achieved by the beneficiaries: food banks, social service programs, civil rights groups, colleges and universities. The United Way, Goodwill, Easter Seals, the NAACP and YWCA organizations were also among those receiving Scott’s surprise donations.

Where did Scott get so much money? After 25 years of marriage to billionaire Jeff Bezos, the couple divorced, and she received more than $38 billion in shares of Amazon stock, a company she helped her husband create. Scott has vowed to give away half her fortune, which has now grown to more than $60 billion.

It’s highly unlikely anyone reading this will ever have that kind of money, but it doesn’t mean we can’t be charitable. And, in fact, we have been. Even in this exhausting and confounding Year of the Pandemic, Americans continue to prove they are a giving people.

The Philanthropy News Digest reports that charitable giving trends for 2020 are on track to beat 2019 donations. For example, statistics from 2,500 nonprofits from around the country show charitable giving increased 12% in the second quarter of this year. Americans who donated less than $250 jumped more than 19%. Those who gave $1,000 or more jumped almost 6.5%.

Proof positive that following the COVID-19 emergency declaration in March, many of us did not simply hunker down and forget about the outside world.

Today our mailboxes and email accounts are filled with end-of-the-year pleas from all sorts of charities designed to pull at your heartstrings and add to your tax deductions before the New Year. But remember, ’tis also the season for scams. Catastrophic events, like a worldwide pandemic, tend to bring out the most creative criminal minds.

The FBI warns that if an organization is asking you donate with cash, a gift card or by wire transfer, it is probably a scam. It’s suggested you only donate by traceable credit card or checks. The bureau also preaches “good cyber hygiene” and advises to always check a charity’s website address closely. Most legit organizations have at the end of their e-address .org not .com. And never click on links or open email attachments from unfamiliar groups asking for money. That could immediately infect your computer.

The Federal Trade Commission urges citizens to do a quick bit of research before donating money. Scammers often make up names that sound like those of genuine charities. The words “children,” “veteran” or “wounded warrior” are frequently misappropriated. So, the FTC suggests a simple web search of the group’s name plus the words “complaint,” “rating” or “scam.” Keep a record of your donation and make sure you were only charged the amount you intended rather than a recurring donation.

To be extra careful, refer to charity watchdog groups like Charity Navigator or CharityWatch. Both of these non-profit organizations have an easy search function where potential donors can insert a charity’s name and see how efficiently and effectively it spends its donations. Charity Navigator, for example, recommends that only 25% of a charity’s funds be spent on administrative costs. Seventy-five percent should go toward the group’s stated mission.

A recently revealed case in point: After the explosion of the #MeToo movement, a group of Hollywood producers and celebrities established the Time’s Up organization in 2018. It was designed to fight sexual harassment and provide a legal defense fund to help victims seek justice. But, according to its own tax filings, Time’s Up spent 38% on staff salaries and hundreds of thousands more on fancy conferences, advertising, public relations, travel and other non-mission activities. Charity Navigator has not rated Time’s Up or its lobbying arm, Time’s Up Now.

The CharityWatch site links to a scathing Hollywood Reporter article about the financial excesses of the outside “ambassador” consultants it recommends.

Bottom line: Be charitable, but be careful.

www.DianeDimond.com; email to Diane@DianeDimond.com.

 

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