Policing the "good" Samaritans

Kevin Begos posed an uncomfortable question for the charitably inclined this year: "How much of that money is well-spent, and how much of it is squandered? The uncomfortable truth: no one knows for sure, and even worse, few are checking."

Begos pointed out that there is little government oversight for charities and the IRS rarely investigates suspicious activities. It does require charities to fill out IRS Form 990, but Begos noted that the form has only broad financial categories, and it's hard to tell if expenses are legitimate: "Indeed, deciphering a 990 would challenge an ace detective - and probably has. Yet should a donor have to moonlight as an accountant or detective just to make sure his or her money is properly spent?"

Rusty Leonard, founder of Ministry Watch, told WoW that his and other charity watchdog groups act as detectives on a donor's behalf, rating organizations on their financial transparency and efficiency. (Ministry Watch has just released its annual list of 30 exemplary ministries.) Leonard agrees, however, that the IRS Form 990 is a "completely insufficient document." An investment analyst, Leonard sees a wide gap between the information companies must disclose to investors and the information charities must disclose to donors: "The standard of transparency that we apply to nonprofits is quite low in comparison."

Despite his usual wariness of government involvement, Leonard believes there should be a regulatory framework for charities - a charitable SEC that enforces penalties if charities misuse donations. Ideally, however, Leonard would like to see donors band together, refusing to provide funds for organizations that don't meet minimum standards of disclosure: "The average donor still doesn't even understand what's going on, doesn't have a clue how their interests are being trampled upon on a regular basis because they're unorganized."

As for unscrupulous charities, "They're willing to throw the donor under the bus," Leonard said. "Is that a Christian response?"