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If you’ve been online in the past week or two, you have no doubt seen viral videos of strangers — and maybe even your friends — dumping buckets of ice over their heads. There is a charitable cause behind these videos. Most, or at least some, of the cold, soaked folks are accepting the challenge to support the ALS Association, a non-profit organization that provides support for research, assistance for people with Lou Gehrig’s Disease (Amyotrophic Lateral Sclerosis), and coordination of care, and the organization advocates for its cause through political lobbying.

Does dumping ice on your head have anything to do with curing a disease, and does it matter? I suppose the answer to both questions is no. There seem to be some disagreements about who started this latest craze. People have been dousing themselves with water to bring attention to causes for a while, but someone wishing to support the ALS Association caught onto this idea and it has certainly captured a lot of people’s attention.

And it’s working. According to the ALS Association, the organization has received $22.9 million in charitable donations between July 29 and August 19. For some context, that collection compares with just $1.9 million raised during the same time period last year, during which time no viral video was asking people to support the ALS Association. That is massively impressive. Good job, everyone who donated.

Still, more questions need to be asked. The ALS Association explains that the increase in donations come from both existing donors — those who have historically supported the organization — as well as 453,210 new donors. Presumably 453,210 persons or thereabouts were inspired by the video to do something they wouldn’t have otherwise done. And existing donors might have increased their normal contributions to be part of the frenzy.

How much of the $22.9 million has come from these 453,210 individuals? Are we looking at a case where a small group of major donors seized the opportunity to help the organization manifold, while your average ice bucket warrior kept their contributions slim? Does the organization even know what to do with $22.9 million?

Before I contribute to an organization, I like to know a little more about it, beyond the mission statement, beyond the marketing. The most important thing is whether the organization is a good charity, and that could mean many different things. Is the organization’s mission in line with something I’m passionate about and interested in? Are the executives taking care of the money they receive?

In the case of the ALS Association, the non-profit’s 11 executives earned $1.8 million in salary for the tax year ending January 2014. Another $950,000 was spent by the organization for marketing consultants. The organization raised a total of $23.6 million in funds that year, and only $363,000 of that was from government grants. During that year, only two individual donated more than $5,000 to the organization; one contributed $5.75 million and the other gave $500,000. While this doesn’t guarantee how people donated this year, it does seem like a good portion of contributions come from small donations like those that might result from a campaign like the ice bucket challenge. This is encouraging.

Here’s the organization’s explanation for the $5.75 million contribution:

In December 2013, the association received a bequest totaling $5,750,000, establishing a term endowment according to designations made by the donor. The proceeds of this bequest are to be maintained by the association in an endowment fund for a period of ten years. Earnings from the fund are restricted to support research and may be spent on a current basis.

The ALS Association’s total expenses in the last fiscal year wee $26.2 million, up from $25.7 million the prior year. These expenses include research grants, patient and community services, public and professional education, fundraising, and administration. Those administration expenses are 7.3% of the total. Charity Navigator, a company that rates non-profit organizations, comes up with a different result of 11% using the prior year’s financials, but considers that to be relatively efficient and provides the organization with an overall four-star rating.

The CEO received total compensation last year totaling $362,458. Is that the right price to pay for a non-profit CEO for a company with annual expenditures of more than $25 million? Maybe. Or maybe knowing the CEO is in a financial position those with ALS would like to find themselves in makes the idea of supporting the organization less tasteful. I do know that running a non-profit organization like the ALS Association is complex and difficult, yet an established organization certainly takes advantage of the willingness of people to support that organization — whether it’s smart people and consultants to advise the CEO or whether it’s the corps of thousands of volunteers who assist non-profit organization through some of the less sophisticated tasks of operating the programs.

Taking all things into consideration, the ALS Association seems to be on solid financial footing and is actively working towards its mission. The money raised by the organization has historically been distributed through grants from the ALS Association to groups doing the hands-on work in research in care, hospitals and universities. Judging by their financial disclosures, their IRS Form 990, and their reviews, you can feel confident giving to the organization.

There has certainly been some criticism in social media about the ice bucket challenge. Many challengers passed along the message by asking that the people they “nominate” either dump a bucket of ice water on their head or donate. This has stirred backlash — other people believe that people should donate regardless of whether they want to record and share a video of an impromptu ice shower. And there are always a good percentage of people who take the challenge, sharing videos with their friends on Facebook, without even mentioning ALS or otherwise identifying the purpose of the video.

But if the numbers can be believed, it’s working. It doesn’t even matter that some people are dumping water and maintaining the virality of the cause without donating or without mentioning ALS. In this case, it’s working, because the medium is so large, the message is getting through. Assuming the ALS Association is not behind this, and that it is a true grassroots campaign, this is a beautiful situation for the organization. Usually, you have to spend a lot of money on marketing to raise funds like this, and companies that handle the fundraising often take a significant piece of the revenue.

For example, hiring a company to handle telemarketing keeps some of the most important outreach work for an organization manageable, but a company that raises $133,000 might keep $111,000 for itself, leaving only $22,000 to the organization it’s working for. $22,000 is better than nothing, but it’s just a portion of the total raised.

In this case, I have to side with the supporters of the ALS ice bucket challenge, not the critics. In other cases, yes, acting foolish on social media in support of a cause, without even mentioning that cause, could backfire. People who have no concept of charity will naturally join in on the fun when they see their friends and strangers doing it. It reminds me of the planking meme from a few years ago. There was no organization to support, just a feeling of inclusion in a popular movement. Luckily for ALS, the penetration of the ice bucket challenge meme is so high that even if 60 percent of video participants have no idea about ALS and neglect to donate money, the benefit to the organization is still fantastic.

If you do choose to participate, you should focus on ALS and give to charity yourself, to the extent that it fits in with your budget, whether it’s $1, $5, $100, or more. Then again, if you don’t give, even if you don’t mention ALS, in this case you are likely still helping the organization. However, you could look at the recent figures and determine your $100 amid a haystack of $22.9 million in one month has diminishing returns for the organization this year, and might do better for an organization that receives much less public attention — at least this month. There are many ways to look at the situation to determine whether you should participate and donate.

Some of the other criticisms of the challenge don’t really stand up to scrutiny. Is it a waste of water? The amount of water needed for the challenge is negligible, but could be seen as a waste in areas where there is a drought. Is it a case of “slacktivism,” where people can feel good about “supporting” an organization without really doing anything? Maybe, but if so, just throwing money at a problem is the same thing — the real charity is donating time and effort. What I don’t like is that this is an indicator of how culture is changing from an externally-focused, doing-good model to a look-at-me-I’m-doing-good model. Celebrities are jumping in on the craze. I’ve even seen friends use the ice bucket videos to market their businesses or “personal brands.” The self-centered trend runs counter to altruism, empathy, and charity, so it’s interesting to see this combination of people drawing attention to themselves in addition to the disease.

Will you do take the ALS ice bucket challenge? Donate to the ALS Association here.


I attended two colleges. My undergraduate degree was earned at a university that is considered both private and public; it has a private charter and obtains a good portion of its funding from the private sector, but it does receive some state assistance and was a land-grant university. Years after completing my bachelor’s degree, I received my master’s degree from a for-profit university, and I’ve discussed my experience there in great detail on Consumerism Commentary.

Once my net worth was on its path towards growth every month, and particularly when my income through business ownership was beyond my expectations, I began thinking more seriously about my approach to charity. Outside of Consumerism Commentary, I’ve always been involved with arts and education, and that’s where I initially decided to focus most of my charitable attention.

Over the course of the growth of Consumerism Commentary as a business, I turned some of the site’s profit into charity on behalf of the business itself and towards goals that were in line with the business’s own mission. When, a site that helps people raise money for educational projects, was new, I promoted a financial literacy challenge.

In following years, I organized a charitable matching program to raise money for various causes. Readers could contribute to any charity they like, and if they sent a receipt to me, I would match their contribution with one from Consumerism Commentary to a charity I selected each year. One year it was the World Food Programme, another year the choice was Médecins Sans Frontières, both in response to timely world events.

I worked for a non-profit arts education organization after graduating college, as faithful Consumerism Commentary readers may know, so I designated that organization as the recipient of some of my personal charitable contributions. With the help of Fidelity, I created a charitable gift fund which allowed me to make it easy to donate money to organizations whose missions I felt passionate about, including that non-profit and my undergraduate alma mater.

Offering charity to a university is a strange concept. Most colleges are not hurting for money. And when I recently read a short article by Slate’s Matthew Yglesias, I considered changing my entire approach. Matthew attended an elite private high school on the Upper East Side of Manhattan and Harvard University. In his experience, higher education does not need any help from people like me — those earning a healthy living and having the opportunity to make occasional gifts to their colleges.

In 2012, Harvard University’s endowment fund totaled $30 billion. My $1,000, $10,000, or even $100,000, won’t make that much of a difference to that particular university in the grand scheme of things, and it’s understandable that Matthew Yglesias wants to bring this to the attention of would-be donors. My own undergraduate university has an endowment fund valued at just above $1 billion, which is still a healthy value.

But the way I made my relatively small contributions matter was by designation the funds to be used for something specific. This ensured that my money was not necessarily contributing to the excesses in administration or cosmetic changes to campus. With every donation, I targeted the growth of programs within my academic interests. Unlike Harvard or another elite university, I knew that the funds, small as they were, would go beyond the students from financially comfortable families and help those with a variety of financial conditions.

Of course, I do recognize that I’m not helping the impoverished when I donate anything to my university. Although my classmates came from diverse backgrounds, it’s not as diverse as a community college. And if I wanted to help those who most needed financial assistance, I’d need to stay away from secondary education completely.

The idea Matthew Yglesias offered, suggesting charitable money would be better spent by giving it to a “homeless person on the street,” is out of the question — there’s no guarantee that any particular homeless person would be able to use random donations to improve his or her situation. At least with the donation to my university, I’m confident that the money I offered must be used towards my designation — that’s a legal requirement.

Tomorrow, I will be having lunch with a director of development from my undergraduate alma mater. We plan to discuss the options for a larger charitable contribution, although I’m still waiting to hear back from my tax accountant who will answer some questions about tax effectiveness. With the changes to my income situation over the past few years and moving forward, I want to make sure that I make the best choices from a tax perspective in terms of timing.

Through the meeting with the director of development, I hope to gain a better understanding of my choices for giving and how I can make an impact both on my areas of passion, as diverse as they are, and my desire to benefit students who might not have certain opportunities available to them because of financial need. Despite my disagreement with the article published in Slate, it raised a few concerns that I want to address with my charitable plan.

Do you donate money to your university?


I’m a sympathetic person. I really am, and sometimes my sympathy has aided me in making bad choices.

But I have no patience for people who pretend to be in some kind of destitute condition, a performance entirely possible through the anonymity on the internet, and beg for money. It’s a strategy — a scam — that works, unfortunately. If you have a nice story to tell, no matter if it’s true, thousands of people will be attracted to that story. If you ask for it, people will send you money out of kindness.

Today is Giving Tuesday, so it’s an opportunity to look at a story that has been in the news recently related to a charitable scam.

Recently, Linda Walther Tirado, also known online as KillerMartinis, concocted and published a short story about living on poverty. In reality, Linda may have had some financial struggles, or at least might have been living on a low income, but allegedly not due to poverty or her upbringing. Her story was thoroughly debunked by a researcher who found other conflicting details about this person’s identity, but Linda’s damage, in the form of attracting kind readers to offer financial help, was done.

From Houston Press:

The real Linda owns a home, thanks to some pretty generous parents… She’s married to a Marine, has met President Obama while interning for a politician…, and has plenty of time to visit Las Vegas on vacation. And blog about her privileged life on WordPress… She speaks both German and Dutch, and has a well-rounded political blog that ended in 2011. It’s also a blog where she quite plainly references being paid to win races.

Her story, which the author and other observers claim has “gone viral” — I didn’t hear about it until the debunking also went viral — generated a generous outpouring of contributions that are still coming in. Her GoFundMe page has raised over $62,000 to help this cyberbeggar allegedly pay for dental bills, but she intends to use the money for other purposes: to shop a book around to publishers, to quit her day job, and to give some away. (GoFundMe is a website that allows individuals raise money, usually for small start-up businesses or projects.)

My opinion on the matter is clear: if you lie as Linda allegedly has, and you use that lie to manipulate sympathetic people to part with their money, you are a scammer. And scammer is putting it nicely. (This is also why I don’t like marketers.)

If the $62,000 is an accumulation of mostly small donations like $5 or $10, most contributors did not risk much. Looking through the list of recent donations via the author’s GoFundMe website, most seem to be $10, with others going as high as $50. On an individual level, a small donation doesn’t look so bad; it’s not much different than when you give a few dollars to someone sitting on the street with a cardboard sign. The more entertaining or clever the sign, the more likely it is that a passerby will hand over a five dollar bill.

You don’t know who this person is. You’d like to think he or she will use your money to buy a sandwich or start collecting for some new business clothes so he or she can look appropriate at a job. For $5, it doesn’t hurt your wallet and you can rid yourself of that guilty feeling you get when a homeless person looks you in the eye. It’s a low risk donation. If it turns out to be a scam, you’ve only wasted $5.

Those who contributed to her collection of more than $62,000 are adults. They are free to make their own decisions about how to spend and donate their money. You can only make good decisions when you have all of the information available to you. People who donated believed the story they were told about the author’s live in poverty.

Karyn Bosnak was the first majorly successful cyberbeggar. But at least with the writing on her website, SaveKaryn, the stories are believed to be true. Karyn SaveKaryn, spent more than she was earning through shopping and fully admitted to her unfettered credit card use. She offered details on the consumer debt she acquired and asked her website’s followers to contribute money to help her pay off her credit card debt. After raising the $20,000 she needed to pay off her debt, she stopped asking for donations.

Why would people help someone whose financial situation was a result of his or her own bad choices? Sympathy and compassion. It’s good to know these are still valued personality traits. Because Karyn’s approach to cyberbegging worked, perhaps just being truthful about your situation will be just as effective as lying if you write well and are able to attract attention.

Although she was truthful about her problem, I didn’t like SaveKaryn’s financial begging from the beginning. There were much more worthy causes for charity than a girl with a good income and a spending problem. Collecting donations wasn’t going to solve a shopaholic’s problem, just enable her to continue to make poor money management choices.

But pretending to be someone you’re not in order to gain sympathy is unethical. It’s manipulative. With Karyn, donors knew they were giving money to someone who didn’t need help. In Linda Walther Tirado’s case, donors were conned into believing their donations were going to a case worthy of charitable contributions. Contributors believed they were helping someone who was living in poverty through little fault of her own.

So while on an individual level, a $20 donation might not hurt the uninformed donor. If the $20 ends up not helping someone raise herself out of poverty, the harm is minor. But collectively, the idea that someone can earn a living by asking for small donations based on a fabricated story encourages others to do the same. Every small donation legitimizes cyberbegging. Every $5, $10, or $50 contribution helps scammers believe that it’s not a problem to use lies to con the public.

Here at Consumerism Commentary, Naked With Cash has featured people in worse financial condition that the real Linda Walther Tirado. Not once have they written — even implied — that they would accept financial contributions from readers to help improve their situation. That would just be unfathomable to me, and I wouldn’t allow Consumerism Commentary to become a vehicle for such activity.

No one is required to give charity only to the needy. I used to work for a non-profit organization whose programs did benefit young people in low socio-economic status neighborhoods, but the vast majority of students who benefited from the programs were comfortably situated in the middle class. This wasn’t a charity for the poor, but an educational program that supported what students might be getting from their own schools, and made some of those school programs possible.

We collected donations because the programs we ran required a large operating budget, benefited tens of thousands of kids under the age of twenty-one, and didn’t generate much income. It was harder to draw donations, I think, because many of these children were not in desperate financial condition (although some were), so we had to appeal to the part of the soul that prioritizes arts education.

Ask questions before you give any money. People like Linda Walther Tirado will continue to take advantage of the kindness of strangers. I don’t think we can ever get to the point at which the public as a whole refuses to give money to scammers and they just give up. Nevertheless, it’s important not to contribute to the encouragement of this behavior. The only way you can prevent yourself from becoming a victim of a liar’s scam like this is to not blindly give away your money, even if it is only $50.

If you read someone’s sad story and are compelled to give money, take some time to think about it first. Do some research.

Don’t give money an an individual. Consider giving the same amount of money to a charitable organization that has a good record of using donor’s money towards a mission you believe in. Don’t be a sucker with your money. When you give to a reputable charitable organization, there’s a record of your donation and oversight of the group’s activities.

Use your compassion in a way that will actually help someone who needs it or that supports a mission you believe in. Helping legitimize a cyberbeggar is not a good use of your charitable dollars, even five of them.

Photo: Flickr/Adrian Miles


If a friend or relative comes to you and asks to borrow money, it’s rarely a good idea to offer a loan. If the person in question does need financial help and you’re in a position to offer them a gift, without any strings attached, without the gift interrupting your own financial goals, it might be worth considering just offering the money without any expectations of repayment.

Once you do this, you’re relying on the recipient’s ability to use your money wisely. When you offer a gift, you don’t want to see that gift wasted, but you’re giving up some control. If the person in need came to you because they needed to afford food for their children, you want to see those children fed with the money you provide. When you give money, and you see the money spent in a way you don’t approve, your only recourse is not to offer a gift again. It’s no longer your money, so you have no say regarding its use.

Giving money to a charitable organization or an educational institution is a little different. I might have first understood this while in high school. My high school had a pretty sophisticated television studio for a high school, in my opinion at the time. There was one of those large satellite dishes outside the building. This is before satellite television became a popular alternative to cable television, so this is not one of the dishes that a homeowner would attach to his roof. This was a large, white dish that looks like it should be used in the Search for Extra-Terrestrial Intelligence array of radio receivers.

Asking around, the word is the school had this massive satellite dish, and probably the rest of the television production studio, because the school district received a gift from a donor that specifically required the school put the money to use for this specific purpose.

From the organization’s perspective, in many cases they’d prefer to receive general donations. Management can then decide how best to use the received funds across the neediest programs. In high school, the performing arts department could have used those grants to better effect than the television production department, but if the donor indicated the funds would be earmarked specifically for a satellite dish, there is nothing the school district could have done differently.

When you make a charitable contribution, you can designate how you’d like your contribution to be spent. Most donation forms provide a few standard options, but they also allow you to provide a written description. With instructions, you can ensure that the money you provide is used in the way you believe is most appropriate, even if the organization’s management might have other needs. Who knows more about an organizations needs, the donor or the management?

Sometimes, this may not matter, as the donor wants the gift to be personally relevant. I offer a donation to my undergraduate university every year, and I designate a specific group on campus to receive the funds, but I don’t offer any instructions beyond that. It’s a relatively small amount for the organization on campus, so I figure that those in charge will be able to best decide how the funds are spent, whether as a scholarship, new materials for students, for travel, professional stipends, or general expenses — once those funds get to the organization within the university I want to support.

For two years in a row, I matched Consumerism Commentary readers’ donations to their own choice of charities with a donation on behalf of the website to an organization that was looking for support for a specific project. In November of both years, I announced the intended charitable organization and we collected information on readers’ donations through Thanksgiving.

In 2009, we donated $3,584 — matching readers’ contributions — to the World Food Programme; in 2010, we donated a total of more than 14,000 to Médecins Sans Frontières. The following November, I no longer owned Consumerism Commentary, so the series ended, but the two years of this project, I donated the matching funds to each of the two organizations without any further instruction.

If you don’t agree with an organization’s overall use of money — for example, if you believe a university’s full professorships and administrative positions are overpaid while the university takes advantage of its adjunct staff — you can use designations to make sure your gift doesn’t fall into the same trap. You can, for instance, try to direct your funds in such a way they help students directly. The same is true when you provide a gift to a non-educational charity; you can direct your grant to the program that would use the cash to the biggest effect while supporting the organization’s mission.

You can’t necessarily do this when you give money to a friend or relative, but when you remain close and you see the funds misused, it can be frustrating.

Don’t give money to friends or family if you are concerned about whether the funds will be put to the same use you would like to see. If you aren’t willing to let an adult decide how to use your gift, it might be better if they seek help from someone else. You could find other ways to help than by giving money. For example, if your needy friend is coming to you because their old car is totaled and need a replacement to get to work each day, you can assist them with buying a replacement rather than giving the money to do so on their own.

If you can’t let go of the need to control — or even the need to see someone make what you believe are the correct choices — don’t give your money away.

Photo: Flickr/Gerard Eviston


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