Breast Cancer Nonprofit's Mysterious End Prompts Calls For Investigation

After the abrupt shutdown of a Chicago, Ill.-based breast cancer nonprofit, State Senator Ira Silverstein (D-Chicago) is calling for the state attorney general to investigate the organization.

Y-Me, which operated a nationwide hotline for breast cancer patients, caused a shock last Thursday when it suddenly fired its staff and shutdown its offices, according to a report in The Chicago Sun-Times. Sen. Silverstein was one of more than 20,000 people who helped the organization raise more than $2 million by participating in its May 13 race and walk.

The office of Attorney General Lisa Madigan said that it would review Y-Me's finances, but didn't accuse the charity of any wrongdoing.

Sharon Green, the charity's first executive director and a current board member, said that economics were the only cause for the shutdown. She told The Sun-Times that Y-Me's finances will be revealed when the organization files for Chapter 7 bankruptcy later this week. She also said that the money raised by the May 13 race was used to keep the charity's hotline open as long as possible.

Public records from the Internal Revenue Service (IRS) indicate that the breast cancer charity saw a big drop in donations over the last five years. Contributions dropped from a high of $16.7 million in 2007 to just $5.2 million in 2010. In addition, an audit released by Attorney General Lisa Madigan's office on Monday revealed that the worth of Y-Me's investments also plummeted. They carried a value of $1.5 million in 2010, but fell sharply to $803,204 as of June 30, 2011. This would indicate either investment losses or that the money was used to pay expenses.

While Green blamed economics as the reason for Y-Me's downfall, a former volunteer and founder of the group's fundraising race, Margaret Harte, said over the weekend that "incompetence and mismanagement" was to blame. She put added blame on the leadership of former CEO Margaret Kirk, who ended her tenure at the end of 2009.

You can read the full story in The Chicago Sun-Times.

Helping Donors Make Wise Choices

Attorneys General across the United States warn donors about making charitable contributions due to the number of scams that have surfaced using the internet. The suggestion that donations are not making it to intended destinations feeds the worries of donors, perhaps making them hold back on contributions.

Would donors still be interested in your cause if they knew that less than half of the money they donated actually made it to the worthy beneficiaries? Helping donors make wise, informed decisions about charitable contributions could come down to putting information at their fingertips. Most people want to be sure that they are giving to a worthy cause and that the money they give is helping. Here are some ideas that might help make the gift-giving experience a success on both sides.

Help donors to make an informed choice. Provide information about how much of the gift givers’ donation will actually go to the charitable cause.

Don’t make high-pressure appeals. Legitimate charities don't rush donors.

Provide written information. Legitimate charities will be willing to send information to donors before a transaction takes place. Provide information on your organization's mission and on how your donation will be used along with proof that the contribution is tax deductible.

Have a call in line. Make sure that your charity can be reached by phone. This will allow a donor to make sure that you are legitimate.

Make sure credit card payments provide security. Credit card payments make funds available more quickly. Using a secure site like PayPal can make the user experience easier and secure.

Provide appropriate tax information. Make sure to provide tax deductible information for federal and state income taxes. Donating to some tax-exempt organizations may not necessarily result in a tax-deductible donation and some organizations may even try to use terms like "tax I.D. number" or "keep this receipt for your records" to suggest they are tax-exempt charities when they aren't. For record keeping, a canceled check or credit card statement generally is sufficient for IRS purposes when you donate less than $250. For larger donations, you will want to provide properly worded receipts from your charity confirming the donation.

Provide alternative forms of giving. Provide alternative forms of giving such as charitable gift annuities, gifts in-kind, and endowments.

Make it easy to volunteer. Giving of time and personal skills can be a valuable to nonprofit organizations. Get organized and make it easy for someone to give their time.

What has worked for you? Give us your ideas.

Has the Money from Wall Street Dried up?

With the severe complexion of the financial industries’ bankruptcies, cutbacks, bailouts, and takeovers sweeping through financial markets, donations from highly paid financial professionals are expected to slump. Wall Street professionals have been a part of the richest 1% of the U.S. population. Some 51 percent of individual giving comes from the 10% of households in the highest income groups and slightly less coming from the 90% with income less than $100,000, according to Giving USA. “While higher-income families are major donors to many important institutions, ordinary-income donors are vital, too, for the health of the nonprofit sector in this country,” according to Del Martin, chair of Giving USA Foundation.

It is natural that as the economy slumps people will have less money to give to charity, however, “the trend of total giving of about 2% of income has remained about the same for the past 50 years”, according to Elizabeth Boris, director of the Center on Nonprofits and Philanthropy at the Urban Institute in Washington, D.C.

The effect of the financial crisis on giving is expected to be significant. Will it really? What will nonprofits do to make up for the shortfall? Perhaps the American middle-class will step in to shoulder the burden of bank bailouts and maintain the healthy philanthropic giving that has been our nature for so long. Though trickle-down hasn’t exactly worked, the question is, has it left charities out to dry?