Charities & Internet Fund Raising

Fund raising has taken a high-tech turn as the success of the Internet has captured the attention of thousands of charitable organizations. One technology company survey estimates there are currently over 300,000 web sites for nonprofit organizations. This article will identify some of the Internet issues that are now facing both charities and contributors.

The Internet can be an effective information tool for both charities and the public. With a click of a mouse, donors can search for a cause and readily access a great deal of charity materials which would take longer to obtain using other means.

Although charity web sites are informative, they generally don’t take full advantage of their public accountability potential. In researching for this article, CBBB’s Philanthropic Advisory Service (PAS) reviewed the web sites of twelve nationally recognized charities. Only two of them included their annual reports within their web sites.

Some state government agencies have established web sites that include helpful charity information such as whether a charity is eligible to solicit funds in the state, tips on wise giving, and recent legal actions taken against charities. However, the full Internet role for state government agencies is still being formed. It will take time for these issues to be resolved.

For a cumulative list of nonprofit organizations holding tax-exempt status that are eligible to receive deductible contributions, you can visit the IRS site.

However, this tax-exempt status does not mean the IRS has approved or endorsed a charity.

The vast majority of charities on the Internet are honest and ethical. However, donors should do no less checking for charities on the Internet than they would for groups that use direct mail or other fund raising methods.

For example:

• Don’t hesitate to send an E- mail request to a charity for more detailed information on its programs and finances.

• A fancy web site should impress you no more than an attractive direct mail package.

• Watch out for name confusion as some organizations have similar names. With close to 600,000 organizations currently tax-exempt as charities under section 501(c)(3) of the Internal Revenue Code and thousands of new groups established each year, it is not surprising that this problem arises.

• The Internet appeal should include a clear description of the charity’s programs and not just the problems it is seeking to address.

• If you choose to contribute on the Internet via credit card, make sure the charity’s web server has encryption capability to avoid unauthorized access to your card number. If in doubt, mail a check.

• Donors need to remember that, in most cases, donations to charities located in foreign countries are not deductible for U.S. federal income taxes.