Philanthropy Journal – Informed donors – Navigating the maze

By Todd Cohen

Emerging from the wreckage of the World Trade Center are questions that donors everywhere should be asking about where their contributions go.

Donated support for victims of the Sept. 11 terrorist attacks is nearing $600 million, yet much of that money may never reach the terrorists’ victims because many donors are giving it directly to relief groups.

While those groups need support for the important work they do, they may be benefiting from donors’ lack of understanding about how relief funds flow.

Further complicating the funding maze is the move by many local United Ways, which are starting their annual fall fundraising drives, to create “Sept. 11 funds” to benefit local charities – and their refusal to let donors use payroll deductions to support the Sept. 11 Fund created by the New York Community Trust and United Way of New York City.

And if donors contribute to the Red Cross or its relief fund or their local Red Cross chapter, the funds are not likely to go directly to victims of the terrorist attacks.

If all this sounds confusing, it is.

Donors in the U.S. are generous, contributing nearly $203.5 billion to charity in 2000. And when times are tough, Americans dig even deeper, as they have in the week and a half since the terrorist attacks.

Yet donors can have a tough time sorting through the hundreds of thousands of U.S. charities, and making decisions about which ones to support.

Making it even tougher is the fierce competition among charities for donor dollars. Charities do good work and sometimes work together, but they also can be as brutal as businesses or government agencies in protecting their turf.

So figuring out who’s who, and what they do, can be frustrating.

With some digging, donors can find information about charities’ finances and programs, although much of that information is less than adequate.

Guidestar, for example, is an online resource that features data from 990 tax forms that charities submit to the Internal Revenue Service.

And, in partnership with Cisco Systems and Yahoo!, the AOL Time Warner Foundation plans to revamp its philanthropic portal to serve as a one-stop shop for donors and volunteers looking for information about charities.

Still, the responsibility for being a good donor ultimately rests with the donor. And the best way to be a good donor is to ask questions, use common sense and think hard about needs.

Donors with limited resources may find themselves trying to decide whether to make contributions that directly and immediately benefit victims of the Sept. 11 attacks, or whether to make donations to local or national charities addressing a broad range of community issues and needs.

There’s no simple answer. Americans give because they care. But caring isn’t always enough to be a good steward of charitable dollars. In the same way that many foundations, corporations and “venture philanthropists,” for example, are giving greater scrutiny to the charities they support, individual donors can do their homework and ask questions before writing checks or making gifts.

In the wake of the terrorist attacks on New York and Washington, D.C., Americans have shown that giving and volunteering is central to our way of life.

We can further strengthen our philanthropy by investing more time and attention to understanding and connecting ourselves to the charities we want to support.

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