Can/Should You Make Money from Charity?

There are many ways to make money in this world which are absolutely legit. However there are certain ways where the line between legal and illegal blurs.

One of them is charity. Is it legal to make profit from charity?

make money with charity

Forget about the legal issue, what about ethical issue?

How donors feel who are giving charity out of good intention? Many of fundraising events happen to be a fraud.

We shall debate all these issues in this article in great details.

Ethical Issue: Is it Ethically Right to Make Money from Charity?

Let us debate whether making profits from charity is right or wrong from ethical angle.

If you are raising money out of good intention and have no desire to keep some of the money then raising charity is fine.

However if you want to keep some amount of money and make it as a regular profession then it might be wrong.

As a matter of fact most of the fund raising companies keep a certain share of money that has being collected in the name of cancer patients or hungry kids.

All of these companies are doing this and it can be ethically wrong but you have to make a decision.

Legal Issue: Is Making Money from Charity Legit?

Now let us see the legal aspect of making money from charity. You could be very much in legal trouble if your charity happens to be a fraud.

As a matter of fact only 10 cents reaches to needy out of every $1 donated for charity. Remaining 80 cents goes in the pocket of fund raising companies, consultants, solicitors and other employees.

In US there are more than 5000 charity organizations functioning all over the country. Almost 50% of them are fraud.

So if you are thinking of starting a fund raising company for personal gains then you must be smart enough to take care of all the legal issues in case any fraudulent charges are levelled by a group.

Charity Money from Donor’s and Fund Raising Company’s Point of View

It is very important to educate the donor who is the major stake holder in this. He or she is the one whose money is going to go to the needy, if at all.

Here are few facts about charity that you need to know as a donor.

According to Center of Investigative Reporting around 50 worst charities across US raised more than $1.3 Billion over the period of last 10 years.

Out of $1.3 Billion around $1 Billion went to fund raising companies in profits which means less than $300 Million reached to the needy people.

This shows most of the charities operating are either fraud or just profit making companies.

Therefore donation for a charity from donor’s perspective is a rip off however for a fundraising company it is a lucrative business.

Different Ways to Collect Money through Charities

Even after reading last few paragraphs you are hell-bent on making money from charity then I give you 5 different ways to collect money effectively.

Gala, Events and Performances

The best way to start is by organizing gala and events where celebrities will perform for a cause and you will collect money by selling tickets.

You can also organize party or dinner where you can ask people to donate money. However organizing an event or a gala could be very challenging and you may need to hire mangers for getting things done.

Asking for Direct Donations

This is the most practiced way of collecting money. You can ask for donations from people directly online as well as offline.

You can create a website or run a campaign where you ask people to donate money. You have to create pages describing the cause for which you are collecting the money.

You can also do it by going door to door.

Selling Products and Merchandise

You might think of girl scouts selling cookies and boy scouts selling popcorn door to door. They collect huge amount of money each year.

You can also replicate by selling products for a cause that people may like to buy. You can sell merchandise like T-shirts, mugs, caps etc.

Grants

Fund raising companies can apply for grants given by government, corporate, various foundations and individuals.

However you have to explain the donor how you are going to utilize their money and also show the potential outcomes.

Volunteerism

If you have to do charity work then you will need volunteers who are going to create awareness and raise money on the ground.

Your charity will not succeed if you don’t have an army of volunteers at your disposal.

So these were few best ways to collect money legally.

Step By Step Guide to Get Started Legally

You might be wondering how you start a legal fund raising company if you are an individual. We give you step by step guide.

Step 1: Apply for a Grant: If you are an individual then you have to do some research and apply for grant from government or corporate. Grants cover all the administrative expenses from where you are going to draw your salary.

Step 2: Managing Operational Expenses: You as a fundraiser have to control the operational expenses and ensure that most part of the charity goes to needy people. You have to take care of various expenses and minimize it.

Step 3: Budgeting: You also have to do budgeting so that administrative expenses do not affect the volume of money raised every year.

Step 4: Put Your Own Effort: You have to put your own effort apart from depending upon the fund raising machinery. Make sure that money raised is exempted from any tax under 501(c) 3.

So these were few steps that you have to take for starting your fund raising company.

Should You Make this as a Profession?

Finally I will conclude by saying that making money from charity is a tricky business.

There are professional fund raisers who operate this as a legit business.

If you are serious about charity only then you should go for it, otherwise choose another career.

10 COMMENTS

  1. I guess charity should not be a way of making money in other words it should be owned by a devoted person who is ready to sacrifice everything good and dedicate his life in to helping the needy the much one can benefit from charity is having your basic needs met by what you get from charity but not a way of becoming rich. charity is a sacrifice.

LEAVE A REPLY

Please enter your comment!
Please enter your name here