One of the wonderful qualities of Americans is the way we respond with our time and our money when a terrible shock or natural disaster hits our fellow countrypeople. The bombings in Boston on the 15th were certainly ‘terrible shocks’ and as homemade and smartphone videos make clear, volunteers and fellow marathon watchers ran in to help before the smoke cleared. And since then Americans all over the country have been raising money online and via a sprouting group of crowdfunding sites. But along with to help survivors recover, warnings are also being raised about cases of fraud. How do legitimate crowdfunding organizations separate themselves from the occasional fraudsters?
Hundreds of websites popped up in the days immediately following the Patriots’ Day explosions, and some of them certainly were engaged in suspicious activity, like claiming to send potential donors special/insider/exclusive video of the explosion or offering links to ‘secure sites’ for donations. On the Friday after the tragedy,
The Massachusetts Attorney General’s Office says if you want to donate money via a website, take the time to check websites such as CharityNavigator.org and BBB.org/charity, “where you will find additional information to help you understand a large number of charities.”
Meanwhile, in addition to websites that may be trying to get your money, scammers may be trying to get your information or spread malware. Avoid clicking on Web links in Facebook or in emails that purport to show explicit video of the explosions.
The sites noted by the attorney general should be used by any donor who wants to double-check a new charity before giving. And nonprofits certainly should develop relationships with these organizations to help protect (and promote) their reputations.
Volunteers in the crowd offer help
With due respect paid to caution, though, analysts stress the fact that fraud in the field of online or crowdfunding philanthropy is quite uncommon. Fraudsters tend to gather in the investment/for-profit pool, where scams can be more rewarding. But even after, creating the concept of KickStarter to raise funds from numerous small investors, fraud remains a strikingly small part of the ecosystem.
Indeed (and rather ironically), the one notable case of fraud happened in Massachusettes, and had nothing to do with the JOBS Act per se:
The fears that scammers would masquerade as legitimate crowdfunding sites haven’t been justified so far. Regulators can point to just one case of a business illegally selling securities under the guise of crowdfunding: The Massachusetts Secretary of State filed a civil case against a company last year charging that it raised $153,000 from small investors in violation of securities laws. The activity predated the JOBS Act.
Be vigilant, but do not let myths of fraud keep you from exercising one of your great responsibilities and privileges as an American: helping your fellow Americans pursue their lives, liberties, and happiness.