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Developing COVID-19 Relief Activities

In tough times, especially, there are people who want to help.
A number of relief activities have been set up in communities across the state, often led by community foundations and United Way organizations. Funds raised will often be sent to local charities that respond to citizens with special needs or economic challenges, but these details can vary.
Philanthropy Ohio, the statewide organization for foundations and others engaged in philanthropy, has helpful information on its website regarding issues surrounding the coronavirus situation, as well as a listing of various pandemic relief activities around Ohio.
It is often easiest to use existing organizations to spearhead these activities, rather than going through the time and expense of establishing a new charity. The IRS has many resources online that address some of the special issues that arise when putting together initiatives to provide aid to individuals.
For contributions to be charitable and tax exempt, the recipients must come from a rather broad, charitable class, such as those with economic challenges. If the beneficiary class is too narrow and easily identifiable, the IRS may deem the solicitation activities as being for the benefit of specific individuals and not charitable and thus not tax exempt. For instance, it can be problematic to raise charitable funds to support a particular family. However, if funds are raised to support the newly unemployed in a community, that would meet the IRS requirements.
As always, charities must keep records of fundraising activities for three years and must document how funds were collected. Additionally, an objective process must be used for the distribution of funds, and those decisions must also be documented.
While charities will be the most common vehicle used for raising funds, there are likely to be individuals who develop GoFundMe or Facebook campaigns to raise funds for those affected. If those funds are to be used to support a particular family, it is not a charitable solicitation. Keep in mind, criminal fraud charges could be levied against the organizers if the intended beneficiaries do not receive the proceeds.
Individuals often start online campaigns to raise charitable funds to address a cause directly, rather than through a charity. State law requires those organizers to register with the Ohio Attorney General’s Office and provide filings on the expenditure of funds. It is imperative that organizers of these activities provide honest information to potential donors and that documentation is kept of the collection and disbursement of funds. Criminal fraud charges could also be filed in these situations if the funds are not used as promised.

If you have concerns about the activities of any entity soliciting in response to the many challenges presented by the COVID-19 situation, you can file a charitable complaint online or research our database of charities.