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Fraud Free in 2023: AG Yost Launches ‘Charitable University’ to Help Protect Ohio Nonprofits

Ohio Attorney General Dave Yost today announced the launch of a new training and accountability resource for Ohio nonprofits called Charitable University or CharitableU.

This online learning platform is designed to educate members of charity boards about both their legal obligations, as well as best practices for running their organizations.

“Every time an Ohioan gives money to charity, he or she is performing act of faith,” AG Yost said. “We want to make sure that board members and charity leaders are faithful stewards of the money they receive.”

The Ohio Attorney General’s Office oversees more than 60,000 active nonprofit organizations annually, with combined assets of more than $300 billion. The AGO’s Charitable Law section is charged with ensuring public trust in the charitable sector through transparency and accountability; enforcing standards; and holding bad actors accountable.

Users registering in the CharitableU system will find a series of short webinars and resources that are critical for effective leadership. Trainings on the platform cover the following “pillars”: board governance, financial operations and internal controls, filings and recordkeeping, and fundraising. Additional webinars will be added to each CharitableU curriculum pillar throughout the year.

To encourage organizations to be fraud free in 2023, completion of CharitableU will now be required for nonprofits who wish to apply for grant funds available from the Attorney General’s Office.

For transparency, organizations who complete CharitableU will be listed on the CharitableU website. Users will receive a certificate for completing the training, which will expire after three years as laws and best practices continually evolve.

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Attorney General James Releases Annual “Pennies for Charity” Report

New Report Shows Charitable Giving Campaigns Raised over
$1.7 Billion in 2021, Almost $250 Million More than 2020

Professional Fundraisers Earned Over $460 Million,
More Than a Quarter of Total Charitable Campaign Donations

In advance of Giving Tuesday and the holiday season, New York Attorney General Letitia James today released her annual “Pennies for Charity: Fundraising by Professional Fundraisers” report, which analyzes data submitted to the Office of the Attorney General’s (OAG) Charities Bureau by professional fundraisers on their 2021 charitable fundraising campaigns in New York. The report looks at trends in the sector, provides guidance and tips for donors, and gives charities information on fundraisers’ performance. This year’s report found that professional fundraisers received over a quarter of every dollar donated to charities that employed them in 2021 in fees and expenses — a total of more than $460 million. Analyzing 658 campaigns conducted by professional fundraisers in 2021, the report finds that charities received 73 percent of donations, in line with the year prior and a small increase from 2019. Professional fundraisers are outside, for-profit organizations often hired by charities to run campaigns. 

“When New Yorkers make the generous choice to give to a charity, they trust that their money will be used responsibly,” said Attorney General James. “In advance of the holiday season and Giving Tuesday tomorrow, New Yorkers can rest assured that my office is working every day to protect their wallets and deliver the transparency they so rightly deserve. I encourage anyone planning to donate this season to consult our tips for charitable giving to ensure their thoughtful gift goes to the right place.” 

New York is home to many diverse charitable organizations and institutions, which like all parts of our society, faced many challenges during the coronavirus pandemic. Despite the pandemic’s continuing economic impact and limitations on in-person events, donations rose to over $1.7 billion in 2021 — an increase of almost $250 million from 2020 and over $400 million from 2019 pre-pandemic contributions. Other report findings include:  

  • In 276 campaigns — 42 percent — charities received less than 50 percent of funds raised, with professional fundraisers retaining the rest. 
  • In 96 campaigns — 15 percent — expenses exceeded revenue and cost charities over $10 million. This is fewer cases than last year for both findings. 

This year’s Pennies for Charity report includes information from reports filed with OAG’s Charities Bureau by professional fundraisers for charity campaigns conducted in 2021. Professional fundraisers must register with OAG and their financial reports must break down the campaign’s earnings and expenses. The report and the searchable Pennies for Charity database containing the findings of those reports are posted on the Charities Bureau website.

The report also lays out tips for donors to follow before donating over the phone, through mail, or online to ensure that their contributions reach the causes they intend to support. The report is linked above for a full guide, but important tips to keep in mind include:   

  • If you are contacted by a telemarketer, ask questions to make an informed decision: New York law requires telemarketers soliciting for charities to make certain disclosures to potential donors and prohibits them from making false, misleading, or deceptive statements to contributors. Telemarketers are required to tell potential donors their names, which professional fundraiser employs them, and if the telemarketer is getting paid. Donors may also ask what percentage of their donation will go to the fundraiser for fees and expenses. 
  • If you receive a direct mail charitable appeal, verify the soliciting organization: Does the organization have a name that sounds like a well-known charity? Double-check — is it the one you think it is? Does the mailing claim to follow up on a pledge that you do not remember making? Does it clearly describe the programs that the charity plans to fund with your donation? 
  • If you are donating online, do your research first: Donating online or via an app is convenient for donors and can be cost effective for a charity. But before hitting “Send,” donors should check whether a campaign is legitimate. Below are steps to take before donating online:
    • Some online platforms that host groups and individuals soliciting for causes do not obtain permission from charities, or vet those charities who use their service. Donors should only give to campaigns conducted by people whom they know. Donors also should check what fees they will be charged and make sure that the charity has given its permission for the use of its name or logo. The site or the charity should confirm that the charity has approved the campaign.
    • When donating online, make sure the website is secure: The web address should start with “https.” Unless the charity uses a separate payment site, the web address should match that of the organization that will receive the donation.
    • Be wary of email solicitations that ask you to click a link or open attachments. These could be phishing scams that try to trick you into giving out your credit card number, Social Security number, or other confidential information.
    • More information about OAG’s Charities Bureau and organizations it regulates may be found online. If you believe an organization is misrepresenting its work or that a scam is taking place, please contact OAG’s Charities Bureau at Complaints@ag.ny.gov or (212) 416-8401.
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National Tax Security Awareness Week: Giving Tuesday highlights that scammers may use phony charities to trick taxpayers

On Giving Tuesday, the Internal Revenue Service and its Security Summit partners warned taxpayers to be on alert for scammers using fake charities to commit fraud not just during the holiday season but year-round.

On day two of Nationwide Tax Security Awareness Week, the IRS and its Security Summit partners urge people to make sure their money goes only to legitimate charities. Being alert to potential scams will not only shield a taxpayer’s money but also help protect personal and financial data that can be used in tax-related identity theft.

“People should watch out for fake charities, which create problems on multiple fronts,” said IRS Acting Commissioner Doug O’Donnell. “Not only can well-intentioned donors lose out on their money and a potential charitable donation credit, but their personal financial information could also be stolen. We urge people to act carefully before they give, including following several tips to make sure the charity is legitimate.”

Working together as the Security Summit, the IRS, state tax agencies and the nation’s tax software and tax professional industries are providing tips this week to help protect people against identity theft as well as help safeguard sensitive tax information that criminals can use to try to file fake tax returns and obtain refunds. This effort is part of National Tax Security Awareness Week, now in its seventh year.

Scammers often take advantage of people’s generosity by setting up fake charities to trick unsuspecting donors into giving away not only money, but also their sensitive personal information. They can use the holiday season and other timely events, such as recent disasters, to try to reach out to people and lure them into a donation. Scams requesting donations for disaster relief efforts are especially common over the phone. However, scammers also use emails, text messages, websites and social media messages that mimic a legitimate charity to trick people into giving money or personal information.

The IRS and its Security Summit partners urge people to make sure their money goes only to legitimate charities. Being alert to potential scams will not only shield a taxpayer’s money but also help protect personal and financial data that can be used in tax-related identity theft.

Tips to avoiding fake charity scams:

  • Don’t give in to pressure. Scammers often use the technique of urgent need to pressure people into making an immediate payment. Legitimate charities are happy to get a donation at any time, there’s no rush. Donors are encouraged to take time to do their own research. Don’t forget that scammers may alter or “spoof” their caller ID to make it look like a real charity.
  • Be wary about how a donation is requested. Taxpayers shouldn’t work with charities that ask for donations by giving numbers from a gift card or by wiring money. That’s a scam. It’s safest to pay by credit card or check — and only after researching the charity. 
  • Don’t give more than needed. Scammers are seeking money, but personal information can be just as valuable. Taxpayers should treat personal information like cash and not hand it out to just anyone. Never give out Social Security numbers, credit card numbers or PIN numbers. Donors should only give limited financial information when the person is sure the charity is legitimate.

Taxpayers who give money or goods to a charity may be able to claim a deduction on their federal tax return by reducing the amount of their taxable income if they itemize and don’t take the standard deduction. However, for people itemizing to receive a deduction, taxpayers must donate to a qualified charity.

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NASCO submits comments to the IRS regarding Tax-Exempt Organization Forms

On November 28, 2022, the Board of Directors of the National Association of State Charity Officials submitted a letter in response to the Internal Revenue Service’s Notice and Request for Comments on Tax-Exempt Organization Forms.  NASCO requested that the IRS address the timely availability of Forms 990 and reiterated NASCO’s request that the IRS revisit the use of the abbreviated Form 1023-EZ.  Please find the letter here.