The astoundingly big numbers of charity fraud cases around the United States call for supervision and regulations of philanthropic organizations. In order to maintain a certain level of excellence, federal and state representatives from the Federal Trade Commission have worked together to look comb through paperwork of different organizations in question and uncover bad behavior.
It is extremely difficult to eradicate this type of behavior across the industry, but with the help of tangible governmental institutions fraud cases could diminish significantly. In the last few months four cancer charities were punished for stealing millions of dollars from donors and supporters. Many other organizations have been criticized for little to no supervision, or inappropriate usage of funds. The past couple of decades have seen a big increase of philanthropies supporting sectors such as education, medicine, social issues, and even music and the arts.
One of the main reasons why charities have gotten such a bad name, is because of the lack of punishable consequences in place for these actions. This structure invites corruption and questionable behavior. In order to bring some organizational structure to the nonprofit world, author David Callahan has come up with four main goals to strive for.
1. Being transparent with donations is great way to stay accountable with your supporters and public. There are special instances where this wont be possible due to the anonymous nature of some funds.
2. Not all philanthropy is charitable. There should be specific guidelines regarding tax break donors get in relation to their immediate impact to improving society. These actions can be measured individually.
3. Always be accountable about how the money is spent. Create small check points throughout your organizations that can asses your funds and their usage.
Although these points are valid and could help on a smaller scale, there needs to be a broader system that oversees the bureaucracy of this system. Stronger law enforcement should be established in order to punish fraudulent behavior.
