Prudent Giving in the Age of Coronavirus

Welcome to the April 2020 edition of our newsletter!  In this issue, we’ll examine the risks associated with charitable giving during the time of great need created by efforts to contain the coronavirus.

Greed in a Time of Need: How to Give Wisely and Avoid Scams

As millions of newly unemployed people adjust to that new reality – however temporary it may prove to be – the impulse of others to help remains strong.  While reports of fraudulent charities arose on pace with the virus itself, much like with natural disasters and terrorist attacks of years before there are steps individuals and corporations can take to protect themselves and inform their decisions.

Although it may prove safest to donate to the Coronavirus-specific efforts of a long-established charity, if a new group has arisen with a compelling message, there are steps you or your clients can take to investigate further.  Given that many states remain in “lockdown” status, fundraising via websites has proliferated.  One resource to check is the ICANN lookup tool (https://lookup.icann.org/), which will disclose when a web site was created and sometimes the registrant or other contacts, although it’s both easy and affordable to anonymize a domain.  As always, it’s best to be mindful of spoof web sites that use a similar name to an established charity or use “.net” or other domain types in lieu of the more standard (but no longer exclusively used) “.org.”

Researching individuals soliciting donations – whether on behalf of organizations or via individual crowdfunding efforts – is a sensible effort even in normal times.  The track record of an individual and/or the charity employing them is an important indicator of how funds may be used.  Has the state attorney general, U.S. Federal Trade Commission or other regulator every cited either for improper practices?  Have business partners, vendors or former employees ever sued them for breach of contract, improper hiring practices or other issues?  Finally, have they ever appeared in a negative light in news articles or on various Internet sites?

Especially for those considering large scale corporate or individual donations, thorough preparation and vigilance is key.  Opening your heart and wallet to those struggling in unprecedented difficulties is a natural and admirable response.  Doing so in a thoughtful and cautious manner can provide great rewards both to the donor and the recipient.