When Donors Commit Fraud, Nonprofits Often Pay the Price

March 6, 2011 – In The News
Chronicle of Philanthropy

State and federal courts handling the cleanup of collapsed investment schemes are demanding charities nationwide give back donations in the event the donations came from criminals. Some charity officials and legal professionals suggest the laws be changed to better protect charitable gifts, but such efforts are not being made.

“The laws need to include protections for charities in certain cases where they have acted reasonably and in good faith in accepting and spending the money,” says Michael J. Kline. He adds, when cases of fraud include donations made around the country and through the Internet, it is difficult for state laws to prevail.