THE DONATE BUTTON: With online charity donations, it's up to the giver to be alert to any dodgy practices.
THE DONATE BUTTON: With online charity donations, it's up to the giver to be alert to any dodgy practices.
When it comes to shelling out their hard-earned cash on worthy causes New Zealanders don't hold back.
Figures due to be released in the next two months are likely to show they are currently giving around $3 billion a year to charitable and community causes.
The donations come from more than a million Kiwis, not to mention many trusts, foundations and businesses.
They equate to around 1.35per cent of New Zealand's gross domestic product , second only to the US and ahead of the UK, Australia and Canada in this regard.
It demonstrates once again that we have big hearts when others are down on their luck and need a hand up.
Of course, this comes as no surprise to those of us old enough to remember the fundraising telethons on TVNZ in the 1970s and 80s.
The first, in 1975, raised more than $585,000 for St John Ambulance, a figure that was totally eclipsed 10 years later when $6 million was pledged for the Child Youth Development Trust.
In today's dollar terms these sums are more than twice as much.
An economic downturn in the 1990s put paid to further telethons but did nothing to stymie our appetite for helping the less fortunate at home and overseas, with more conventional fundraising methods filling the gap left by television.
Today we are confronted with a plethora of individuals and organisations asking for our money, be it in the form of lowly sausage sizzles and raffles or, increasingly, by sophisticated, high-powered online websites.
Well obviously if an organisation is a member of the Fundraising Institute of New Zealand and have signed up to our comprehensive code of ethics and practice standards, then they are above suspicion.
Among the big players, so-called crowd-funding platforms are now the name of the game.
In New Zealand Givealittle, Everydayhero, FundraiseOnline and GoFundraise are part of this American-inspired phenomenon which has taken hold all over the world.
Between them they have transformed fundraising in this country and taken it to a totally new level, creating a much larger and younger pool of participants.
On balance, this seems like a good thing but it has raised a raft of cyber safety issues that internet crowd-funding platforms like Givealittle are being forced to grapple with.
Givealittle dominates this highly competitive marketplace, raising almost $35 million for worthy causes since being founded by technology entrepreneur Nathalie Whitaker in 2008.
"When we started out we were motivated by how technology could transform New Zealand's philanthropic landscape and harness the generosity that all Kiwis have at heart," she has been quoted as saying.
Under her leadership, Givealittle got off to a modest but encouraging start, charging users a small fee to solicit donations.
But all this changed when the Spark Foundation acquired the organisation in 2012 and transformed it into New Zealand's first zero-fees fundraising service.
Since then there has been no looking back, with Givealittle taking pole position in the online fundraising stakes, recording its largest fundraising event to date this year when more than $1 million was donated to victims of the Nepal earthquake.
The impact of Spark on the crowd-funding platform has been immense as the following figures demonstrate.
Since buying Givealittle three years ago, it has seen monthly donations rise from around $50,000 to $1.4million, annual donations from $4.3million to $19million and monthly new cause pages from 206 to 672.
Leading beneficiaries have been the Himalayan Trust Nepal Earthquake Response which received almost $370,000, Help Lucy Knight & Family ($269,000), Brad Smeele's Recovery ($232,000), NZ Red Cross Samoa Tsunami Relief ($208,000) and NZ Red Cross 2011 Earthquake Appeal ($206,000).
It's no wonder that Givealittle, which regularly generates donations of $50,000 to $80,000 a day, is now referred to as the Trade Me of giving.
So who are its biggest users in terms of age, gender and ethnicity?
The general manager of the Spark Foundation, Lynne Le Gros, told the Bay of Plenty Times Weekend that it doesn't collect information about the demographics of Givealittle users, but "our assessment is that both donors and donees are as diverse as New Zealanders are".
"In its early years, it is probably fair to say that Givealittle was more popular among younger, more digitally savvy people, but we believe its appeal has progressively widened among New Zealanders as a great place to give and to raise funds for deserving causes."
With so many people using Givealittle and with so much money up for grabs the integrity, probity and credibility of all concerned are paramount.
As Rosie Dawson-Hewes correctly pointed out in this newspaper recently, crowd-funding websites are built on trust.
"When you donate to a cause, you trust that the cause you're donating to is real and that the money you give will actually go to helping that person or cause."
Her concerns were triggered by the case of 54-year-old businessman Allan Mitchell from Paengaroa.
A few weeks ago he started a page on Givealittle hoping to raise money for a new drug which could buy him more time in his fight against terminal brain cancer.
It prompted many donations which in next to no time at all were nudging the $10,000 mark.
But then it transpired his company had been convicted and fined $100,000 in 2008 for selling pills, falsely claiming they could make women's breasts larger and firmer.
The transparency inherent in online platforms like Givealittle means there are many self-regulating safeguards that help ensure donors can give with confidence.
Not surprisingly this news caused some folk to question the validity of his claim to be suffering from cancer, and a member of the public "reported" his page to Givealittle, which then undertook an investigation.
Lynne Le Gros says following this it was decided that Mitchell would be allowed to keep his page open but all funds raised would be paid directly to Braemar Hospital as a third-party medical service provider.
"In this way, we could give donors confidence that their donations will be used for the intended purpose, which is to treat his medical condition.
"We believe this case is a clear demonstration that Givealittle processes work effectively to protect donor trust and confidence.
"And the fact that a number of people have chosen to donate to the page since Mr Mitchell's history has become public vindicates our decision to keep the page open."
Since then, as we reported in our lead story today, Mitchell has come clean about another brush with the law.
The former investment broker admitted to misappropriating more than $400,000 worth of clients' money in 1999.
Mitchell was sentenced to 31/2 years' jail after being found guilty by a jury on nine charges.
He told the Bay of Plenty Times that he never disclosed the conviction on his Givealittle page because "it would probably have made my situation worse and I would have got less than I have got now".
When this information was put to Le Gros, she said she was not aware of anything new about Mitchell.
"This information, if correct, would not alter the approach we have already taken with respect to Mr Mitchell's current fundraising page, ensuring that any funds raised via Givealittle are paid directly to a bank account at Braemar Hospital."
Nevertheless, the Mitchell case has prompted some to ask why Givealittle does not require page owners or beneficiaries to declare any criminal convictions, a standard practice in many other organisations.
Le Gros believes it is not necessary.
"It is not up to us to judge the prior history of beneficiaries, just as we don't seek to determine what is a good or worthy cause or project.
"The reality is that in today's world of social media and Google searches, Givealittle causes are highly transparent and there are many ways for people to learn more about the background of any particular fundraising beneficiary, should they wish to do so."
Question marks were also raised over money raised for the funeral of 5-year-old Leon Jayet-Cole who died in Christchurch hospital this year after suffering a serious head injury.
His stepfather has since been charged with his murder while his mother is facing charges of failing to seek medical treatment for the boy on the day he suffered the fatal injury.
Soon after Leon died, a Givealittle fundraising page was set up by someone describing themself as "a family member wanting to help".
It specified that donations would be used to pay for his funeral and support the family "during this very sad time".
After receiving numerous public complaints Givealittle conducted an internal investigation which revealed that ACC had covered Leon's funeral costs, and the $4629 raised was going to be used by his mother to take her other children on holiday and buy items for a newborn baby.
Lynne Le Gros says this is the only occasion that Givealittle has refunded donations against the wishes of the beneficiary.
"It is important to note that this decision was not because of fraud concerns, but because the funds were no longer required for the reason initially stated and we were unable to agree with the beneficiary on an appropriate alternative application of funds."
It is not up to us to judge the prior history of beneficiaries, just as we don't seek to determine what is a good or worthy cause or project. "The reality is that in today's world of social media and Google searches, Givealittle causes are highly transparent and there are many ways for people to learn more about the background of any particular fundraising beneficiary, should they wish to do so.
In another case, Givealittle held on to more than $1000 that was donated to the family of 15-month-old Cobden boy Leith Hutchison who died from what is believed to have been a brain injury.
But after discussions with police, the organisation eventually paid the funds to two creditors of the child's mother in relation to funeral costs.
Le Gros says Givealittle has had only one case of fraud in the fundraiser's history.
"This involved approximately $15,000 but as this case is still before the courts we are unable to comment further at this time."
Le Gros says Givealittle's terms and conditions state that donations are non-refundable "except in the event that we are still holding funds that have been raised for a stated purpose or intention and it is proved that this purpose or intention has been misrepresented".
"In this scenario we reserve the right to refund donations to donors."
All of which may be of little comfort for donors duped by the woman's fraudulent conduct, especially if she has already spent the money. Le Gros dismisses any suggestion that Givealittle is vulnerable to such abuse.
"We've only had once case of fraud in seven years. Given that more than 12,000 causes have raised almost $35million in that time, we think this speaks for itself as to the strengths of Givealittle as a great place where New Zealanders can be confident about their generosity.
"The transparency inherent in online platforms like Givealittle means there are many self-regulating safeguards that help ensure donors can give with confidence."
She says public reporting plays an important role in assisting Givealittle to investigate pages and monitor them for potential abuse.
"It's important to note here that self-regulation is working with around 5per cent of all pages receiving at least one public report.
"The majority of public reports would be categorised as challenging a paper based on the worthiness of a fundraising beneficiary, or a judgement on the suitability of the page for Givealittle based on a comparison to more well-known pages.
"Very rarely do public reports allege any actual wrongdoing on the part of the beneficiary."
Le Gros says there are systems in place to prevent abuse in terms of verifying the identity of users, ensuring their cause is legal and has not been misrepresented, and that the money raised is used for the person or people it is intended for.
"We are always reviewing and improving our processes to ensure Givealittle remains best practice whilst continuing to offer an easy to use self-service platform."
Her confidence in the organisation is also shared by James Austin, the chief executive of the Fundraising Institute of New Zealand.
"They do have a good checking service and always test the service first before letting it go live," he told the Bay of Plenty Times Weekend.
"I am not sure any further regulation will work. Bringing in police checks is costly and very much a sledgehammer approach to crack a very small nut."
Martin Cocker, executive director of Netsafe. Photo/file
His sentiments are echoed by Martin Cocker of Netsafe who says he understands that Givealittle has only had one significant fraudulent event and has taken steps to prevent a recurrence.
"In the end, Givealittle and similar services are platforms connecting people who have charitable needs and people who wish to donate, and the rule of caveat emptor applies. "Just as there is some risk putting money into the tin of a collector, there is some risk donating to charitable causes online.
"People simply need to donate with that in mind," he says.
Everydayhero, which has just acquired FundraiseOnline, says it currently only remits money to charities and schools.
Craig Shackleton, the New Zealand regional manager, says these organisations "go through a robust series of compliance steps to prove their identity, prove their eligibility and also prove ownership of the bank account that is being elected to receive proceeds".
"There are also a large number of compliance steps called Know Your Customer (KYC) needed to be taken by charities or schools wishing to change the destination bank account."
Shackleton says about the only form of abuse that could occur is credit-card skimming with stolen cards, but the company has sophisticated processes in place to identify and blacklist repeated transactions that may be the result of skimming.
James Austin believes most charitable organisations in New Zealand are reputable and take adequate steps to ensure donations are used for the purposes they are intended for.
"Yes, they do, and I know you expect me to say that they do, but if they don't do that, charities will soon be out of business.
"We are rightly focused on successful outcomes and not on how many postage stamps we buy to mail out another appeal to our donors."
So what advice has he got for donors who want to ensure their money is going to a legitimate cause?
"Well obviously if an organisation is a member of the Fundraising Institute of New Zealand and have signed up to our comprehensive code of ethics and practice standards, then they are above suspicion.
"If they are registered with the Department of Internal Affairs charities services they can also be reasonably certain that their money is going to be spent appropriately.
"If they are donating to a family or an individual then there must be an element of buyer beware, but in the end people must take responsibility for their own spending commitments."
Austin's advice to people who are confused about which charity to support is "to follow their heart".
"Give to the cause that interests them or that they and their family members have benefited from in the past.
"It can be the start of a wonderful relationship where you become not just a donor but a stakeholder in that charity.
"Also, make sure they are a registered charity and preferably one of my members!" Like New Zealanders elsewhere, those of us who live in Tauranga or the Bay are spoilt for choice when it comes to supporting worthy causes and it's perhaps unfair to single one out for special mention.
But maybe an exception can be made in this instance for the Foundation for Youth Development (FYD), which this year is celebrating its 20th anniversary.
During this time it has placed more than 150,000 young people in various programmes and, according to Bay of Plenty regional manager Dan Allen-Gordon, is "on track to deliver life-changing programmes to almost 20,000 Kiwi kids this year".
"At FYD we believe that it is important that we not only do good but that we can also prove the difference we make.
"Our programmes all change lives and are informed by best-practice research."
¦Improve attitudes and behaviour ¦Improve academic results ¦Help young people to set and achieve their goals ¦Boost self-confidence ¦Reduce truancy rates and at-risk behaviours like alcohol and substance abuse ¦Provide strategies to reduce bullying ¦Change lives and build confident Kiwis
Allen-Gordon says FYD's results have been quantified in the Growing Great Futures - Whakatipu Tamariki Ora report prepared by Infometrics in 2012.
It showed that every dollar invested in FYD's programmes is expected to result in an average long-term benefit to New Zealand of $7.15.
"When compared to a $1.80 return for New Zealand's Roads of National Significance, this is a pretty respectable return."
So, for donors intent on getting a good bang for their buck as well as supporting a very worthy cause, giving a little to FYD seems to be a no-brainer.
