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

Anticipating 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 GuideStar.org.

@JosephWMead