Be Careful How You Donate
Corporations often fail to match gifts when conducting fundraising drives and because of this Robert Evans argues that you should NOT give when asked to donate at the cash register or the gas pump.
Need another reason not to give money to panhandlers? On July 5, The New York Post reported that non-Jews with names like Vincent Maurizio have been dressing up like Hasidic Jews and begging in Orthodox strongholds in Brooklyn – sometimes netting as much as $750 a day.
The tabloid with a reputation for sensationalism actually played this one down the middle. The editors didn’t even grab the low hanging fruit and use “oy vey” in the headline. They didn’t have to.
I’ve been saying this for years: It is rarely a good idea to give cash donations. Despite having the best of intentions, you just don’t know where your money is going when you give on the street. I’ll reiterate what so many other advocates have said: If you must give to someone on the street, give food and water.
This is coming from someone who believes wholeheartedly in the act of giving. But, as a general rule, rather than support an underground charitable economy, why not give to a nonprofit that displays transparency, demonstrates impact, and has a compelling mission? There are too many worthy nonprofits in this country for Americans to give to potentially untrustworthy recipients. Instead of giving to an individual on the street, look up organizations in your area that serve the homeless, go to their websites, peruse their 990s, and pick one that you have the most confidence in. That would be a much better use of your dollars.
I’m not the only one saying this. I recently had the chance to meet Mark Pacella, chief deputy Pennsylvania attorney general who heads the office’s Charitable Trusts and Organizations Section. (We each were featured speakers at a Continuing Legal Education program earlier this year.) What the country needs, Pacella said, is well-thought out gifts to reputable nonprofits – not impulse giving. People approached on the street, or asked to give an extra dollar at a cash register, may not be thinking clearly and are likely influenced by pressure and concerns about how others will perceive the response.
“We all have a stake in the administration of charitable assets,” he said in an interview. “To the extent that money donated to charity is effectively used, we are all the better for it.”
But what happens when the person asking for a dollar for charity isn’t a panhandler or honest-to-goodness con artist(no hyphen), but a representative of a major corporation trying to do good?
That’s exactly what happened to me a few weeks ago while gassing up at a Sam’s Club. I was asked to give to the Children’s Miracle Network, which runs 170 children’s hospitals across North America. I gave, in part because I felt embarrassed not to. After all, talking about giving is what I do as a consultant to nonprofits. I believe everyone should give to charity according to their financial abilities. But afterwards, I had an uneasy feeling about the exchange. How do I know this employee didn’t take a little of the donations he collected for himself? Would Sam’s Club match my gift? I always tell donors to ask how their dollars will be used. Yet, I didn’t know.
After doing a little digging, I learned that from May 1 to June 13, Sam’s Club and Walmart raised $40 million for the Children’s Miracle Network, mostly through $1 donations from customers and employees.
What’s wrong with that, one may ask? Sam’s Club/Walmart tapped into customers’ generosity and anteed up $40 million to support health care for children, right?
Well, for starters, there was no corporate match. This practice allows Walmart/Sam’s Club to reap the public goodwill of a major charitable donation without actually giving anything.
Now, Walmart is far from alone in this practice. A number of America’s top retailers also put their customers on the spot and ask if they’d like to donate a dollar or five dollars to any number of worthy charities. And, the Walmart Foundation did give away $1.3 billion in 2013. But its latest annual gross profit was $127.4 billion. The company could certainly afford to match the $40 million in donations.
Pacella, to be fair, noted that while he doesn’t love the practice of cash register giving, he said that when it comes to huge enterprises such as Sam’s Club and Walmart, the consumer/donor at least can make a reasonable assumption that the higher-ups have done their homework in choosing which charity to support.
“I don’t mean to suggest that by giving a dollar, you are doing the equivalent of throwing your money away,” said Pacella.
Here’s what I’m suggesting. The next time you are asked to give at the cash register, ask to see some literature about the charity, ask for a website to go to, ask if they are going to match your gift. Likely, the cashier won’t have that literature on hand and won’t know the answers to your questions. But they should. Large corporations that hope to partner with their customers should be prepared to expend the resources and human capital necessary for potential donors to make more informed decisions. That way, the corporate-donor partnership can be a true collaboration and not a transaction based on impulse or pressure.
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