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How charitable foundations make money

We all often see various advertisements for organizations that provide assistance to people with disabilities, orphans and animals. On the streets, promoters are handing out leaflets calling for help to put in order the dying nature, posters flashing in metro cars with the words “Let’s save children with rare diseases”. It so happened in our society that most people do not trust charitable foundations or simply do not believe in their honest activities.

We will not analyze why such stereotypes have arisen, although this is already obvious – there are indeed a lot of scammers among such companies, so people simply do not believe in them anymore. We have already written about how charitable foundations are created. Today we’ll talk about how they make money. After all, such organizations are also a business, although they bear the title of “non-commercial activity”.

How charitable foundations make money
Charitable organizations are companies with the status of a legal entity that carry out non-commercial activities. According to the law, 70-80% of all funds received from free donations, such funds are required to spend on their main non-commercial purpose – in fact, helping those in need, restoration of historic buildings, environmental improvement, and so on. Charity has many directions. The remaining 20-30% (the figure is inaccurate, since this percentage can vary in different countries) the organization has the right to spend on itself. That is, for the salaries of employees, for the maintenance of the office, for advertising needs, and so on. It turns out that the more donations a company receives, the larger the amount it can take for itself. And it is absolutely in its interests to attract as much money as possible from the population.

There are serious sums in the circulation of large charitable foundations that solve various social problems, and which are periodically helped by successful businessmen. And the employees of such organizations can receive quite good salaries, not to mention the founders and leaders. Sometimes they use various tricks to get as many donations as possible. This is either outright fraud or gimmicks that mislead people, but in fact do not break the law.

Fundraising methods
One of the ways to get money from unsuspecting people is through regular pay stubs. Rather, they are only seemingly ordinary, but in fact with a “surprise”. Leaflets are printed that resemble utility bills as much as possible – in size, font, text arrangement, type of paper, etc. The amount indicated is not significant at all – up to about 80-100 Russian rubles. Requisites for payment, of course, of the charitable foundation. In order not to violate the law, the receipt says “not required for payment.” Naturally, in the smallest print. It is not advisable to indicate the time frame of payment. Of course, there are many people who want to study this receipt in detail, and find out that this is just a trick of the company, and it is not at all necessary to run with this piece of paper to the cashier. But there are also those who will take a quick look at the appearance of the receipt and the amount indicated in it, and thoughtlessly go to pay allegedly for “utilities”. And this money will go straight to the stock account.

Whether such a method is a scam is a moot point. Even if the fund observes all the “rules” according to which they allegedly do not violate the law, we all understand that this method of raising funds is not transparently fair. Another thing is when the residents of the city are handed out or sent by mail pieces of paper with a request to donate an arbitrary amount to a charitable cause. Payment details are also indicated, but you can enter any amount you want. The payer of such a receipt is not delusional and clearly understands that his money will go to the account of a charitable organization and that he has the right to simply ignore this piece of paper and he will not get anything for it. This method of raising money is the most honest, the only pity is that most people who have received such a receipt simply throw it into the trash can.

Another weak point of aid organizations is kickbacks. For example, the foundation decided to help a shelter or nursing home buy some equipment or furniture. These items are bought at a higher price than the publicly quoted price, and the difference is simply returned by the supplier or seller to the charity company in an envelope.

How charitable foundations make money
The most widespread charitable foundations today are fundraising for the treatment of people with serious illnesses. But there are also incurable diseases. If you point out that this patient has an incurable disease or is already in a neglected condition, that he has no chance of salvation (alas, this happens) – it is unlikely that many people will want to donate money for his treatment. Is that to alleviate his fate, but still the sentence “no chance” does not motivate people to transfer money to the account of such a patient.

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