Schuette: "Proceed With Caution When Donating Online"Contact: Joy Yearout 517-373-8060
June 16, 2014
LANSING - Attorney General Bill Schuette today issued a consumer alert encouraging donors to be cautious when donating online. The alert, which Schuette issued through his Consumer Protection Division, educates donors regarding a new form of online giving known as crowdfunding.
"Crowdfunding and other types of internet giving can be tools of tremendous good, but as with any type of giving, it can be abused, so it's important to proceed with caution when donating online," said Schuette. "I encourage all Michigan citizens to give—but give wisely."
Crowdfunding is defined as a collective effort of individuals who network and pool their money, usually via the Internet, to support efforts initiated by other people or organizations. Simply put, crowdfunding is another way of asking people for money.
"Michigan Nonprofit Association applauds the Attorney General for taking the lead in protecting Michigan citizens on this emerging national fundraising trend," said Donna Murray-Brown, President and CEO. "Nonprofits that intend to engage in crowdfunding efforts should also be aware of state laws that regulate such activities."
There are several popular crowdfunding platforms. These include IndieGoGo, Kickstarter, and GoFundMe. Here, users can create their own projects in seeking donations to fund their proposal. Crowdfunding projects are often spread through social media sites, which can potentially lead to a wider donor base.
Here are some questions to consider before donating:
To whom are you donating? Are you sure of the asker's identity? Could it be someone else?
How do you know that your money will be spent appropriately?
If donating to an individual: Is it someone that you know? Someone that you trust? Is the amount being raised reasonable or does it seem excessive?
If you have further questions regarding donating to charitable organizations, contact your local law enforcement or the Attorney General's Charitable Trust Section. Under the Charitable Organizations and Solicitations Act, the Charitable Trust Section registers charitable organizations that solicit from the public; both the Attorney General and local prosecutors have enforcement authority under this Act.
The Attorney General's Charitable Trust Section may be contacted at:
Charitable Trust Section
P.O. Box 30214
Lansing, MI 48909
For more information on crowdfunding for charity, see the Better Business Bureau's "Crowdfunding for Charitable Causes."