Crowdfunding becoming popular way to raise funds fast, but donations are gifts and may not be deductible
Arlington, VA – The rescue this week of three women and a child from a Cleveland home where they were held captive for a decade has gained worldwide attention. Generous donors wishing to help the victims are being cautioned by Better Business Bureau to confirm the legitimacy of all charitable fundraising and crowdfunding efforts.
“A tragedy of this nature that is the focus of high profile media attention inspires people to give,” says David Weiss, president and CEO of BBB of Greater Cleveland, “but, unfortunately, also catches the attention of scammers who try to take advantage of well-meaning generosity.”
BBB Wise Giving Alliance has seen charity scams following all recent natural disasters and manmade tragedies, and encourages donors to balance their generosity with thoughtfulness and research. “Try to avoid making emotional giving decisions,” says H. Art Taylor, President and CEO of the BBB Wise Giving Alliance, “The first request for a donation may not be the best choice. Check with the BBB to help avoid questionable fundraising efforts.”
BBB also reminds consumers that donations made through crowdfunding websites are usually considered gifts to the recipients and are not tax deductible unless the group receiving the funds is a 501(c)(3) organization as designated by the Internal Revenue Service.
BBB urges consumers to make wise choices with their donations:
The Cleveland Foundation has set up the Cleveland Courage Fund for the victims. The organization is a community foundation that has been supporting various Cleveland area projects since 1914.
BBB Wise Giving Alliance is asking anyone who receives a suspicious charitable solicitation to report it to BBB Report a Scam.
ABOUT BBB WISE GIVING ALLIANCE: BBB Wise Giving Alliance produces reports on over 1,200 nationally soliciting charitable organizations, and local BBBs report on another 10,000 local and regional charities. BBB Wise Giving Alliance does not rank charities but rather seeks to assist donors in making informed judgments by providing objective evaluations of national charities based on 20 standards that address charity governance, finances, fund raising, appeal accuracy, and other issues. The outcomes of the evaluations are available online at give.org. BBB Wise Giving Alliance is an affiliate of the Council of Better Business Bureaus.
ABOUT BBB: For more than 100 years, Better Business Bureau has been helping consumers find businesses, brands and charities they can trust. In 2012, consumers turned to BBB 124 million times for Business Reviews on more than 4.5 million companies and Charity Reports on 11,000 charities, all available for free at bbb.org. The Council of Better Business Bureaus is the umbrella organization for 113 local, independent BBBs across the United States and Canada, as well as home to its national programs on dispute resolution and industry self-regulation.