Startup charities are like any startup business; they have to earn our attention.

My premise is that startup charities do not command it because of the nature of being a charity. There are plenty of fakes that hurt the real good ones. They need to be treated like any other startup business: validity of the people behind the cause first and then the worthiness of the cause.

The number of charities in the United States that are considered tax exempt are between 40,000 and 50,000 and could number more. Although these charities are registered with the IRS, the number of charities indicates that they may exceed the IRS’s ability to vette them completely each year; some of these charities may exist for dubious reasons.

Those two points appeared in an article in the New York Times, this Sunday (December 5, 2009) on page 1 and page 29, titled Grab Bag of Charities Grows, Along with U.S. Tax Breaks (written by Stephanie Strom). You can read it here.

Remember on Nov 30, I wrote Believe in your charity by believing in other charities? The point of that article was that just because a person is running charity does not entitle them to get the services for free.? Some people tend to use their charity as an excuse to get free or discounted services.

On page 29, there is an article also by Stephanie Strom: Seeking Profits At a Nonprofit. It is a fairly unflattering piece about an energy company.? This energy company is accepting federal funds and donations to develop alternative sources of energy and patent them.? However, the reporter discovered that their one and only patent is NOT in their name but in the name of one of the founders. Given that we are not given any details, or the circumstances of the patent, we are left to believe that this is someone using the veil of charity to profit.

It is also a piece of terrible marketing for the energy company.

Unfortunately, some worthy charities have difficulties because they are just not popular as a way of showing that you are good citizen.? Last night I sat in a fund raiser for another charity, one that provides education for adults. One of the speakers, a professional fundraiser, pointed out that it is much harder to get donations for them versus a hospital. Why? Education is not sexy like a hospital. You gave money for books? Ho hum. You gave money to cure a disease!! That is very good of you. That is the mentality they deal with every day.? I donate to them.

Someone asked me why I should donate to them and not to someone that is more worthy. I said, They are worthy. I checked them out. The big charities get a lot of money already, but this small needs it too.

To reiterate my points:

1. Just because you are a charity does not mean you should get services for free.? You have to earn that privilege.
2. You CAN earn that privilege but you have to do deeds that demonstrate your intent.
3. Talking about deeds and planning deeds do not count. You can try to convince me of the worthiness, but then I am going to judge you by you and your validity (just like any investor).

A startup charity is just like any startup business in the sense that you have to not just believe in the cause, but believe in the people behind the cause.