website trust, making charitable donations transparent


1

So I have a question about the theoretical holding of charitable donations. So I have a start up idea that I am busy coding away on... At the base of the idea is spreading the wealth of humanity, so with that in mind I am embedding links to an array of top-rated charitable organizations.

I would like to not partner with charities or require charities to register but merely suggest a list of charities a user can donate, which have high rankings from charitynavigator.org all simple enough.
Now my question is I would like to be able to somehow track all user contributions through my website. So with that would it be unrealistic to expect user to donate through my webpage with the trust that I would then transfer these funds forward to the actual charitable organizations? (I personally would see this as a type of scam and be questionable However there are multiple reasons to which it would be best:

  1. advertising total amounts donated
  2. handling of multiple currencies ie. charity excepts USD but user has bank account of other currencies
  3. taking bitcoins or non-traditional currencies

Personal thoughts on yea or neh would be awesome along with other legal issues that may be accompanied with this type of system.

Note: I am a stackoverflow user and unsure where this question really belongs if not here could you point to somewhere it would be beneficial to post it (i searched stackExchange and this seemed most relevant)

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asked Apr 20 '13 at 07:45
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Brendan Morrison
106 points

1 Answer


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TLTR: Talk to a local lawyer. There are too many things to consider. There can be myriad problems with this. Depending on the local laws, it can be considered income to you, while deductions for charitable donations may be limited (it is so in the US, for example, you can never deduct more than 50% of your income on donations).

You can also be considered a payment service which will require additional licensing and regulations adherence.

There may be liability issues (someone claims to have donated but the money never arrived, for example), or deductibility issues for your customers (not paying directly to the charitable organization might render donation non-deductible).

Last but not least you may end up losing money on currency transactions, or being targeted for sting operations (someone donates through you, you transfer the money, they reverse the payment).

You have to know how exactly to organize and register your business to avoid all these and more, how to write your legal docs for the users, how to ensure the users actually understand it and agree consciously, in order to make sure you're covered.

Bottom line, there are many dangerous things for you in this, and also potential pitfalls. As to your customers - as you said, they may not see any potential benefit. But that's a business issue that is subjective and not really answerable.

answered Apr 20 '13 at 10:13
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Littleadv
5,090 points

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