Critics Question Site That Seeks to Raise Money for Individuals

Reality Charity, a new site that made its debut today, promises to serve as an eBay for fund raising, where individuals in need can post appeals to pay off student loans, recover from a natural disaster, or avoid a foreclosure, and those wishing to give can respond to them directly, reports the Associated Press.

Alexander Blass, the site’s founder, said the idea is to let donors choose their causes and beneficiaries and make sure their gifts are not diverted to a nonprofit group’s overhead costs.

Contributions given through Mr. Blass’s Web site won’t be tax-deductible because Internal Revenue Service rules prohibit earmarking of gifts to specific individuals. And Reality Charity is being run as a for-profit company.

Patrick Rooney, director of research at the Center on Philanthropy at Indiana University, in Indianapolis, says donors should be careful about giving to strangers online. He says that if an organization wanted to serve as a trustworthy intermediary between individuals and donors, it would need to spend significant sums vetting potential recipients and would probably need to become a charity itself, rather than just an enabler of direct appeals.

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