Exploiting Your Charity

Maybe this is an easy question (it’s certainly an old one): Should we punish you more if you defraud someone by tricking her into giving you money that she believes is going to charity than if you defraud someone by tricking her into giving you money that she believes is going into an investment that will make her rich?

Yesterday afternoon, I received a text message from the number for the Pennsylvania voter protection project that I did volunteer work for back in the fall of 2008:

Text HAITI to 90999 to donate $10 to the American Red Cross relief efforts in Haiti (Text STOP to unsubscribe Msg&Data rates may apply)

In the previous few days, I’d received a number of similar appeals from friends as result of efforts by the Mobile Giving Foundation (“The Mobile Giving Foundation brings the power and reach of mobile phones to nonprofit organizations as a new fundraising and donor interaction mechanism”) and other organizations.

From all accounts, the text message campaigns have been tremendously successful. According to organizers, by Thursday night, $2 million had already been raised for the Red Cross. However, the campaigns have also opened the ways for scammers of all sorts. As the FBI explained, in a warning issued last week, “Past tragedies and natural disasters have prompted individuals with criminal intent to solicit contributions purportedly for a charitable organization.” And, sure enough—as with 9/11, Hurricanes Katrina and Rita, and the earthquake in China—that appears to be happening again, which leads to the punishment question.

I would not be surprised to find out that some of the same folks behind the email schemes from the “desperate” Nigerian government official who offers several million dollars for your “help” are the same ones behind the new Haiti earthquake relief scams. Should they receive stiffer sentences for being convicted of perpetrating the latter than perpetrating the former? Anyone want to argue that they shouldn’t?

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1 Response

  1. PrometheeFeu says:

    I do not believe that it makes sense to have tougher convictions on people who commit fraud by pretending to help others rather than pretending to help yourself. In my opinion, the point of the law is to within the limits of proportional punishment encourage “proper” behavior and discourage “inappropriate” behavior. (Where proper behavior is behavior that respects other people’s rights and inappropriate behavior is behavior that violates other people’s rights) Within that framework, I ask 2 questions:
    1) Is the scam charity more reprehensible than the scam investment therefore allowing a proportional punishment to be stronger for one than the other?
    2) Can we create a more effective deterrent by raising penalties on scam charities compared to scam investments?
    If we can answer yes to both questions, then a higher punishment makes sense.

    I would argue that the answer to the first question is yes. By creating such a scam, the perpetrators are not only depriving the donor of their property by voiding their consent to the donation, they are also depriving the actual intended beneficiary of the donation from that donation. Furthermore, they are discouraging the donation to charitable causes as people become more suspicious that actual charitable organisations might actually be scams. This is causing harm to those who would otherwise benefit from donations. Since those people tend to be in situations of grievous need, that harm is significant. So it would be proportional to raise the associated penalty.

    However, I am unconvinced that such higher punishment would actually act as a greater deterrent. Those who perpetrate such scams have a high expectation of impunity. That is why they continue. Given that those scams do often go unpunished, that perception of impunity is likely to continue. Therefore I would presume that raising the penalty would be unlikely to change the behavior of many if any would-be charity scammers.

    You could raise penalties so they remain proportional to the crime, but you could not raise them so they remain proportional to the goal that is accomplished.