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Haiti Donations: Taxes and Texts (practical considerations for donors)

February 5, 2010

Activities surrounding the Haiti earthquake remain one of the trending topics being covered by journalists since the news broke on January 12, 2010. In the first 24-72 hours after the news of the quake, there were multiple reports on the increase in text donations, specifically through the Red Cross fundraising campaign. (See also: Haiti: How Can I Help?). As donors from around the world continue to give, we focus today on two practical considerations for donors that we continue to hear about: Taxes and Texts.

In Guidestar’s recent February newsletter, donors will find IRS information regarding a new law passed for a special tax provision, as well as detailed  instructions for getting immediate tax relief for donations made to Haiti between January to March 2010. This provision covers those filing taxes for 2009 and includes electronic donations via sms/text and online platforms. In addition, the Financial Times ran a story of charities in the UK that missed approximately £5 million in potential tax deductions, that is now being held by the Treasury for reallocation, due to a lack of donor education on the country’s Gift Aid Programme for tax relief on Haiti donations.

Texts

The Chronicle of Philanthropy recently reported that over $644 million has been raised, as of February 3rd, for Haiti relief. Of this total, $31 million was donated to the Red Cross via text message. In addition, Convio, an online donation software company, processed over $250 million in donations as of February 2nd.  As we reported in a previous post, Haiti: High Impact Technology for Disaster Relief Giving, many of the phone companies and mobile giving services have waived their standard setup fees (ranging from $3,000 – $10,000) charged to nonprofits for this service.  Since that post, many of these same phone companies and mobile giving services have now expedited their standard processing time (usually 60-90 days) for text donations. As a result, nonprofit beneficiaries no longer have to wait until donors pay their phone bills to receive text donations. For more on text giving, donors and nonprofits can refer to the following articles that address concerns on the potential future challenges for nonprofits, 5 Real Challenges For Non-Profit Texting Campaigns, and Is the Haiti Response a Game-Changer for Mobile?

3 Comments leave one →
  1. February 5, 2010 6:27 pm

    The Haiti disaster … like the Katrina disaster … the Pakistan Earthquake … The China earthquake … the South Asia Tsunami … and every other disaster becomes an opportunity for fund raising. The ugly fact is that this fund raising removes money from philanthropic donors to organizations that have very little transparency and seem to be totally incapable of addressing the very reasonable issue of accounting and accountability.

    I have been around this issue since the 1980s … maybe ever before. In the aftermath of the Biafra War images of starving children were used to raise money. The Biafra war was in Nigeria … the pictures were from another part of Africa where starvation was an issue. This was simply dishonest PR. Raising money so that a disaster is avoided is impossible. Raising money with images of crisis is much easier. Every disaster gets money flowing … and there is never adequate accounting for the way the money is used.

    Nobody knows how much of the Tsunami money was diverted to non-Tsunami activities … or merely stolen. Some estimate the amount as around $2 billion … a lot of money by any standards.

    Community Analytics (CA) is well suited to getting some accountability about the fund raising for Haiti and the use of these moneys in the Haiti situation. Steps are being taken to make CA web accessible with text message data acquisition. If resources are used in the best possible way, Haiti will have a great future. If there is no accountability for the money there will be an elite that does well, and a lot of people who do not.

    Peter Burgess
    Community Analytics

  2. February 9, 2010 1:40 pm

    That is good to know, because even though I only donated a small amount last year, every little bit helps. Especially since I am going to try to claim deductions this year. I hadn’t even thought about claiming it though…

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