Given the great financial impact of BMT on almost all families, it is often necessary for patient families or those who care about them to raise money to help meet these expenses. Relatives, friends, and concerned community members often want to help the patient and family. Getting directly involved in fundraising is a very concrete and practical way to do this. Fundraising by a support network can also help take some of the burden off the parents at this time of crisis.
Before getting started with fundraising, it is very important to get educated on legalities and procedures involved, to make a fundraising plan, and to organize a group of people to carry it out. While it is beyond the scope of this website to explain how to raise money, we can offer some advice on what you need to know to get started.
Spending Donated Funds
The first important thing to know is that donations made on behalf of an individual patient or family must be kept in a separate bank account and not mixed with any family monies. This is critical, because if the family receives the money directly, it can be counted as personal income for tax purposes, and it may raise their income to a level that may disqualify them or their child from being eligible for possible assistance programs, both public and private. The funds collected for this purpose need to be managed by a person who is not an immediate family member, to be used to directly pay treatment-related costs and family living expenses, and payments need to be able to be documented. Generally, funds must be paid directly to facilities and vendors, and not to the family. Examples of acceptable expenses would be all manner of hospital bills; medicines and medical supplies; special comfort items and clothing needed by the patient; insurance premiums, deductibles, co-pays; rent or mortgage; car payments; food; utility bills; childcare, lodging, transportation, gas and parking expenses; communication charges, etc.
Types of Patient Fund Accounts
There are several ways that a patient fund may be established, and it is a matter of personal choice which one to use. The simplest way is to set up a special account at your bank or a bank near your child’s treatment center (CHRMC and SCCA also have arrangements with a Seattle bank for patient families to open a local account). Bank personnel will explain to you how to do this, including the matter of appointing a trustee to manage the account. You then will be able to direct prospective donors directly to the bank account.
There are also charitable organizations–some for childhood cancer or specific diseases or for BMTs and transplants in general–that offer a service of setting up accounts for donations to be made on behalf of a specific patient. Some of these groups (see list at end of article) also provide fundraising technical assistance and possibly also give financial grants to patients.
It is also possible set up a patient account under the auspices of any registered charitable organization, which will act as the administrator or trustee of the account.
If you choose to set up the fundraising account for your child with an organization, it is important that you select the organization very carefully, such as one of the established organizations in the field. Unfortunately, there have been some cases of commercial fundraisers who have sought out desperate and unsuspecting families in order to make a profit for themsleves. The website of the WA State Office of the Attorney General offers more information about this topic.
Are donations tax-deductible?
Under certain circumstances, a percentage of donations made to a recognized charity may be tax-deductible for the donor. However, there is often much confusion over what this really means, and over the difference between the terms tax-deductible and tax-exempt. To summarize briefly, under the rules of the Internal Revenue Service (IRS), monetary donations to registered charitable organizations are partly tax-deductible for donors who meet certain specific conditions about their tax filing and their income. Groups that have been designated by the IRS as 501(c)3 organizations are tax-exempt. This means that they are exempt from paying taxes on their income because they have been recognized by the IRS as fulfilling public charitable, educational, or other specific public-benefit purpose. However, donations made to individuals are not tax-deductible. Contributions to a recognized charity that administers a patient’s fund may be deductible, depending on the tax status of the fund itself.
Among the requirements that a donor must meet to be able to claim a deduction for a chartiable contribution, is that the filer must itemize their deductions using Schedule A of Form 1040. People who take the standard deduction may NOT claim a deduction for charitable contributions. There are also limits on the percentage of the total amount of the specific charitable donation that is deductible: usually no more than 50% of its sum, and sometimes 20% or 30% of the total. based on a rate determined by your income bracket. For 2007, IRS rules also set a maximum income level beyond which charitable contribution deductions are limited. There are other rules as well, including a requirement that claimants be able to show proof of receipt of donations over $250. For more information and links to filing instructions and documents, please visit the website of the IRS , specifically Topic 506 – Contributions. Also helpful are the websites of recognized charity information resources like Charity Navigator and Guidestar.
Should families set up their own charitable organization for fundraising purposes?
There is sometimes confusion about this issue. Not only is it not necessary to set up a 501(c)3 charity organization in order to create a patient benefit fund, but it may not be possible nor advisable to do so. The 501(c)3 status is granted by the IRS to organizations that can prove that they fulfill a recognized charitable purpose that benefits the public, not to benefit a single individual.
Some families may decide that they want to create an organization to benefit other patients undergoing BMTs, and indeed many charities existing today were started this way. However, creating a new charitable organization is a very lengthy and complicated process, involving much planning, writing, documentation, and meeting of state and federal regulations, not to mention expense. If you have determined that there is no other organization already in existence that fills the need you want to address, then you can seek out technical assistance to learn all about creating a new charitable organization. For more on this topic, see the extensive listing of resources for WA nonprofts compiled by the Executive Alliance as well as national-level resources on the Idealist NonProfit FAQ website. Nonprofit assistance centers staffed by specialist librarians are available at the Central Seattle Public Library and at the Redmond branch of the King County Library System.
BMT Fundraising Assistance
The following organizations offer help that may include setting up patient accounts, fundraising techncial assistance, and monetary grants or matching funds. You will need to check with each one for program specifics and eligibility requriements. Some of these organizations may also have citizenship or residency requirements for eligibility, which they should explain in detail.