emerging issue: changing landscape of charitable solicitation

EMERGING ISSUE: CHANGING LANDSCAPE OF

CHARITABLESOLICITATION

February 8, 2013

Bob CarlsonAssistant Attorney General

Missouri Attorney General’s Office

1. New solicitation forms are already in our cases

• Online donations are growing rapidly– 10.9% increase in 2012

• But: less than 10% of dollars charities collected

– 106,000 charities received – $77 average online donation– High number of individual donors

• Source: Chronicle of Philanthropy, December 2, 2012

• Fraud cases– Many individual donors with donations $10 - $250– Scammers will create web presence and solicit online

• Know that if you’re not online, you don’t exist

2. Solicitations are changing

• Donation boxes to direct online donations: 1. Donation boxes2. Boiler rooms3. Websites4. Mobile Giving5. P2P sites6. Direct solicitations on Twitter, Facebook, etc.

2. Solicitations are changingConcerns & Challenges

1. No verification of 501(c)(3) status2. May not even be a nonprofit

• May not even be anyone with any experience in field. • Solicitation may not even be considered charitable

3. No way to track donations• State registration or nonprofit record-keeping under IRS rules

4. Lack of a “responsible adult”• If go through First Giving, Mobile Giving, etc. there is always one

or more experts making sure everything is done right.

5. Like donation boxes and verbal solicitations, web information can disappear

3. Many New Players

Online donation systems create many new entities who ask for money and

handle donations

Source: http://sumac.com/demystifying-mobile-giving-nonprofit

Nonprofit payment processing explained…

Source: Debra Askanase PowerPoint Presentation Columbia University March 24, 2011

3. New Players• Peer to Peer fundraising

– Unclear just who is doing the asking?• Unclassified and untracked

– Unknown who: handles funds, needs to register, ultimately receives the donation.

• Misunderstood concepts– What is a BBB or Guidestar seal?– Why does it go through Network For Good?– Significance of 501(c)(3) recognition

Contact Information

Bob CarlsonAssistant Attorney General

815 Olive St.St. Louis, MO 63101

314-340-6816314-340-7957 (fax)

bob.carlson@ago.mo.gov