Fundraising situation, what would you do?

[AnnieW625]

A friend of ours daughter has been diagnosed with juvenile diabetes and is 4 years old. My heart goes out to her and her family, and they are coping really well. The family/mommy group friends are doing the LA area juvenile diabetes walk in the fall and their goal is to raise $1000 or $1500. So the mom who is a go getter decided she wanted to throw a fundraiser for her team at her home. The suggested donation per couple is $45 or $30 per single person. The event is going to include wine, hours d'oeuvres, and a silent auction. She has gotten local businesses involved to provide silent auction items. Her invite states that all proceeds will benefit the Juvenile Diabetes Research Foundation. A couple of weeks ago when she first mentioned it I asked if she was doing this in conjunction with a JDRF local chapter, and she said no that she is doing it on her own. That is what got me thinking, is this legal to state that you are doing a fundraiser at your own home that JDRF knows nothing about?

I have only attended large fundraisers for 501.c3 organizations, but never a fundraiser to benefit a 501.3C that wasn't organized by the 501.c3 itself. I know that if I went the check would be made out to JDRF, but there is just something fishy about it esp. since a silent auction is involved. Would it bother anyone else? DH thinks I am worrying over nothing.

http://en.wikipedia.org/wiki/501%28c%29

[Andi98989]

There have been people who will fake an illness, have a fundrasier, and pocket the money. As long as you make your check out to JDRF and not to her as an individual, I would think it's okay. She'll have to give the money to them.

[kijip]

People do fundraisers "on their own" for non-profits all the time. I would often receive envelopes of checks made out to the places I worked or whatnot from people's office parties, book club fundraiser etc. If you think about it is is really not that different than collecting books for children's library or diapers for a food bank at your office or birthday parties. Still it can be hairy if the people don't act in good faith (rare that people are trying to cheat/steal though) and it can get problematic for a number of reasons if the participants assume they are at an event by an organization and the organization is not involved.

As a non-profit professional who mostly specializes in fundraising now I can't tell you the number of times someone did something nice on their own, but then I get calls from the people that went to the event wondering where their receipt is or why the check has not been cashed etc...but I have not yet learned the event even took place, much less received and cashed their check. Because the hostess has been meaning to bring it in but has not gotten around to it. So while it is nice and great to do these things, it is often raises issues because the attendees then hold the charity accountable for not getting thanked etc...but the charity either has no information or limited information. The worse is when the hostess collects checks and cash and then writes out one big check to the charity and so we don't have the donor information to provide a thank you. People hold the charity responsible for not magically knowing this information. I had a gal chew me out on the phone because she gave us $100 at a purse party but not only hadn't she been thanked, she didn't get an invite to our gala. Well, I didn't know her from Adam because her $$ had come to us in one big check, written by someone else who had, like your friend, done something for a charity without letting us know.

About businesses giving donations, most generally want documentation from the charity for the donation.

Anyone who wants to claim their tax deduction needs to have a receipt from a 501c3 . The cancelled check is no longer sufficient documentation. And if the donation totals more than $250, the charity must send a receipt which meets certain specific requirements and have a record of all of the details of the donation. But I can't do that if I don't have the right information.

[westgre]

I guess it would depend on the person throwing the fundraiser as to how comfortable I was with it.
But, I wanted to add that JDRF is a great cause. We have a team at work that walks every year. :)

[carolinamama]

Katie has some really good points. I was just going to respond since my sister has type 1 diabetes. All I can tell you is that it is a really tough disease - yes you can treat it with insulin and things are much better than they were even a few years ago with the new pumps etc. But it is a life-long, minute-to-minute part of life for people with it. My parents are passionate about raising money for JDRF. They haven't gone so far as to hold their own fundraiser, but that's more because they just aren't that type of people. I'm betting this mother just really wants to put her time and energy into helping her child every way she can. I think you are right to have your concerns, but I would maybe discuss how the money logistics will be handled with the hostess and make sure your check is written to JDRF, not her if you want to go. Or politely decline and you could always write a check to JDRF on your own accord if you want. Hope my rambling made sense.

[hardysmom]

I don't think it is illegal, but it can set up some problematic issues. I have worked for several non-profits. Occasionally, these private events would come up. Usually, we found out about them after-the-fact.

How big the non-profit is determines how they would deal with something like this-- Almost all would be honored and supportive, but these days, a lot of "national" health non-profits (Heart, Lung, Cancer, etc) are highly centralized without much of a local presence in their communities beyond their established fundraising events.

Sometimes there are marketing/event departments who can get their knickers in a twist worrying that an "unsanctioned" event could go awry and blemish the Organization.

The biggest problem is for people trying to claim a tax deduction for their gifts.

Too often, what happens is that the person collecting the revenue will deposit it in their personal checking account and then make a single gift to the organization. In that case, a single receipt is issued to the "coordinator" for the lump sum. The individuals who gave money to this person, therefore, won't receive receipts and can't claim their gifts.

To avoid this, the key is to ask people to make their checks out directly to the organization. The host can just pass them along w/o commingling them in a personal account.

Auction items are a little tricky because you can only claim the amount which exceeds the fair market value of the item. Like, if there is a $50 restaurant gift certificate and someone pays $60 for it their deductible "gift" is only $10. Under normal circumstances, the receipt from the 501(c)3 has a bit stating if "Goods or Services" were exchanged. That is tough if the non-profit is unaware of which gifts came from an auction, which were direct gifts, etc.

Also, from an organizational standpoint, one hates to "lose" the names of donors as it is poor form not to issue some sort of thank-you.

That someone is running around collecting silent auction items is also tricky since one assumes that the businesses donating THINK they are making an in-kind gift directly to the organization. She needs to be VERY clear with them. Otherwise, in a few weeks/months when a "real" volunteer (acting as an agent of the Organization) hits up those same businesses, there isn't ill will either toward the Association or towards your friend.

The other problem can come from misunderstandings about whether the host is using funds to off-set the cost of the event. Sometimes that happens. It isn't illegal, but is a sticky-wicket. The road to Hell paved with good intentions and all that...

The best thing for her to do would be to contact the local chapter to let them know about the benefit. At a minimum, they can provide some literature. Possibly they will send a speaker or a staff person who can be helpful. If she doesn't want them to come, they won't; however, they can help with the logistics of how to collect and record proceeds. She can give them a list of donors (including businesses) to thank/receipt, etc.

Hope this helps

Stephanie

[newg]

My mom does a garage sale each year and all money goes to JDRF...all her signs state this and she suggests people make a check out to JDRF if they are a little hesitant......she's been doing this for five+ years now and people have actually come back year after year to make their donation to her.........
They're also active with the local chapter, who is aware of this garage sale fundraiser......so I think your friend should be fine.............as pp mentioned, let people know if they make out a check to JDRF they can use it for taxes and they won't have to worry about "false fundraising".....

OP I'm really sorry for your friend and her daughter......I've been diabetic since I was 8 (22 years now) and I have a totally "normal" life and I now have a healthy baby girl....www.diabetes.org is a great website for parent's and other diabetics...it has a great message board set up similar to this one.......
Good luck!!

[ha98ed14]

Based on what Katie said, if you want to bring it up with the woman, I would ask something like, "Do you know how the Juv. Diab. Assoc. will be providing receipts? Will they mail them to us, or are you going to be passing them out?" I doubt she has even thought about it, so maybe this question will make her realize that people want a certain level of transparency to their charity donations.

[hollybloom24]

I am a professional fundraiser, and while laws vary from state to state, I doubt what she is doing is breaking any laws as long as she is being honest and actually giving the money to the charity. Think about a child having a birthday or bar mitzvah where they decide to donate money or a portion of the money given as gifts to a charity.

She might need to get permission from the charity to use their name, especially if she uses it on advertising materials or to secure silent auction donations, but that's your friend's problem, and really, if she is in any gray area regarding local laws, that's her problem too.

You only need a tax receipt from the charity for donations of over $250 for your tax purposes. Most will send a receipt for donations of less than $250 anyway. Otherwise, a cancelled check (or the like) would be your receipt for donations under $250 - see IRS website: http://www.irs.gov/publications/p526/ar02.html#en_US_publink100049781

I say follow your heart. It sounds like your friend is trying to do a good thing. To be safe, make a check out to the organization, (making sure your name and address are on the check) which will most likely provide a receipt to you.