In a ruling that could have implications for many charities, the Internal Revenue Service has denied a tax exemption to an organization in part because the group did not spend enough of its money on charitable programs.

This is the first public sign that the revenue service is measuring how much charities spend by using a controversial approach that the government has recently decided to apply. 

The IRS said the organization did not carry on a charitable program “commensurate in scope” with its financial resources.

As is its policy, the IRS did not identify the group. But the organization was identified as the National Foundation of America, in Franklin, Tenn., by the Web site of a state government receiver in Tennessee who has been closing the organization.

The IRS ruling was released at a time when the tax agency has been signaling that it plans to take a more-aggressive approach to making sure the nation’s nonprofit organizations are not hoarding or wasting money.

Steven T. Miller, commissioner of the IRS’s tax-exempt and government-entities division, said in a speech last month that the agency would apply a standard that it had briefly embraced years ago but then set aside — a so-called commensurate test — to help determine whether charities were spending money efficiently and effectively.

Less Than 1% to Charity

In its private-letter ruling the IRS said the organization had said in its application for tax-exempt status that it planned “to coordinate and conduct, through its staff, evangelistic campaigns in a number of countries wherein the people are receptive to the Gospel of Jesus Christ.” The group’s initial two-person board of directors was a husband and wife.

Affluent people are increasingly likely to use the Internet to make their charitable donations, a new survey of nearly 3,500 donors has found.

But charities are turning off some of their biggest donors — people who give $1,000 or more, the survey found. Some charities send too many messages to donors who say they don't want them, while others don't take advantage of the interest many donors express in expanding their online interaction with nonprofit organizations, the survey found.

"Most charities are not paying attention," says Mark Rovner, president of Sea Change Strategies, a fund-raising consulting company in Takoma Park, Md. "The people responsible for [soliciting] larger gifts need to start taking the Internet much more seriously than they have."

Sea Change conducted the survey along with Convio, an Austin, Tex., company that provides Web-based software for nonprofit groups, and Edge Research in Arlington, Va., which does research and polling for nonprofit organizations.

The survey, which was conducted online, was based on data from 3,443 donors who had made gifts of at least $1,000 to a single cause in the past 18 months and donated an average of more than $10,896 per year to charities. Sixty-four percent of the donors were age 45 to 64, and 57 percent had incomes of at least $100,000. The donors' names were provided by 23 organizations that represent an array of causes, including advocacy groups, health organizations, international relief groups, public television stations, and Christian ministries.

Among the key findings:

• Four out of five donors said they had made a charitable gift online, and a little more than half, 51 percent, said they prefer to use the Internet for their donations. Some 46 percent said that they expect to make a greater percentage of their charitable gifts online within the next five years.

• Fifty-six percent said that charities send too many e-mail messages, and 47 percent said they do not read as many messages from charities as they did in the past.

• Seventy-four percent said it's inappropriate for a charity to obtain their e-mail address from a commercial database, while 82 percent said they don't think it's right for charities to send them messages about another organization.

• Ninety-two percent of donors like getting year-end tax receipts by e-mail, while 83 percent want to get electronic updates on a charity's finances and spending. Seventy-four percent said e-mail messages are appropriate when notifying donors that it's time to renew an annual gift or to explain how a donation has been spent.

• Eighty-one percent of donors dislike messages that take an urgent tone in seeking a repeat donation.

• Forty-six percent of donors said the charity's messages do a good job of making them feel connected to the organization, while 43 percent said the messages are well written and inspiring.

Most of the donors want more say on the quantity of e-mail they receive from charities.

There is a new trend arising in both the nonprofit and tourism industries.  Volunteer tourism, or "voluntourism", is an emerging trend that is gaining popularity.  According to a survey sponsored by MSNBC and Conde Nast Traveller, 55 percent of the participants in the survey said they were interested in volunteering on their vacation.  When asked if the participant has ever taken a volunteer vacation, the survey showed that 20 percent has taken at least one. Of the 20 percent who have taken a volunteer vacation, 95 percent of them said they would likely take another.

CNN

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(CNN) -- Ordinary Americans aren't the only ones being punished by tough economic times. Charities say they need help, too.

Food bank shelves across the country are getting emptier because of high food prices and increased demand.

Charitable groups that help the poor -- food banks, thrift stores, shelters -- say the slumping economy is eroding their ability to help the nation's needy. They report declining donations and a surge in people seeking help.

Bill Bolling, the founder of the Atlanta Community Food Bank, says he's experienced several recessions but never seen so many working people visit food banks. Bolling's charity donates food to 800 nonprofit groups in Georgia.

"This is new for us," Bolling said. "People are giving up buying groceries so that they can pay rent and put gas in the car."

National charities like Goodwill Industries International, Inc and The Salvation Army give the same grim assessment -- donations are down, needs are up.

At least 1.3 million more people have enrolled in the federal Food Stamp Program compared to last year, says Ross Fraser, a spokesman for America's Second Harvest, one of the nation's largest hunger-relief groups. It donates food to at least 200 food banks.

"People who have been in food banking for years say it's the worst they've ever seen," Fraser said.

People often assume food bank customers are homeless. But several food bank officials across the country say that many of their customers are working class people and their numbers are increasing.

They are people like Lynette Copeland, who works full-time as a clerk at a rehabilitation center in Atlanta, Georgia. She's buying a Habitat for Humanity house and drives a car. But she says she doesn't make enough money to pay her bills.

Copeland says she depends on the Atlanta food bank to feed the four grandchildren she raises alone. She says the high costs of food, fuel and daycare force her to eat meat sparingly and shop at Goodwill.

"Although everything is going up, your pay rate doesn't go up," she said.

Lately, Copeland says she has noticed a change in the makeup of the customers visiting her food bank. Instead of the homeless and destitute, people come from all walks of life: the elderly, men in security guard uniforms and mothers with children.

Many are first-timers. Some are too ashamed to ask for food in front of others; so they walk to the side of the food bank where fewer people are gathered to receive food, she says.

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PORT-AU-PRINCE (Reuters) - Haiti faces a "major crisis" if international donors fail to provide urgent aid to help feed its poor, a top official with the World Food Program said on Wednesday.

"It is not so important how much money we are able to raise for our cause," Pedro Medrano, the WFP director for Latin America and the Caribbean, told a news conference. "The question is how much the international community and all of us are prepared to pay for not doing what needs to be done."

The WFP appealed for $54 million in fresh funding to offset soaring food prices in Haiti and provide the country with about 50,000 metric tons of food between now and December.

"This is a major crisis. Are we going to intervene when it's too late?" asked Medrano, who spoke as he wrapped up a brief visit to the impoverished Caribbean nation, the poorest country in the Americas.

According to WFP figures, 66 percent of Haitians live on less than $1 dollar a day and 47 percent are undernourished.

At least six people were killed during riots in Haiti this month as protests against rising food prices and the high cost of living turned violent.

Lawmakers sought to quell the anger by dismissing Prime Minister Jacques Edouard Alexis, who was fired on April 12. But there are fears public unrest could erupt again and that the food crisis could spark an increase in the number of Haitians who attempt the dangerous 600-mile (966-km) sea journey to illegally enter the United States.

Angry protests over high food costs have rattled several countries in recent weeks as bad weather, competition with biofuels, market speculation and rising demand in Asia send the price of many staples skyrocketing.

Survivors are seen at their home, which was destroyed by Cyclone Nargis, near the town of Kyaiklat,...

Survivors are seen at their home, which was destroyed by Cyclone Nargis, near the town of Kyaiklat, southwest of Yangon, May 7, 2008. Survivors with harrowing tales of villages smashed by Cyclone Nargis are paddling wooden boats to the Myanmar town of Bogalay to find whole streets destroyed and food and water scarce. Almost no aid has reached one of the hardest-hit towns in the Irrawaddy delta of around 50,000 inhabitants, where the storm tore rice mills apart and washed away fishing boats.

(Reuters)

As people around the world respond to the devastation wrought by the cyclone that ripped through Myanmar on May 5, charity watchdog groups are warning donors about bogus charities that may pocket donations instead of sending the money to the people of Myanmar.

Daniel Borochoff of the American Institute of Philanthropy says that while there have not been reports of bogus charities so far, it may be too early to identify potential scams.

"There are groups that are raising money, asking for donations that do not have programs, and it's not even clear if they can get into the country," Borochoff told ABCNews.com. "We're cautioning donors to make sure they donate to organizations that they know can do something with the donations. Anybody can pretend to be someone else and get out there and raise money and give it to some other group."

The Better Business Bureau provides eight tips to guide Americans as they try to find reputable charities:
1.) Donate to organizations that are accredited by the Better Business Bureau and are experienced in handling donations in crises.
2.) Find out if the charity has on-the-ground presence in Myanmar.
3.) Find out who will benefit from the donations and what types of assistance they will be provided.
4.) Be cautious of charities that claim to donate 100 percent of their donatiions.

Nonprofit groups are growing faster than the rest of the economy, according to figures released this month by the Urban Institute in Washington.

While the U.S. gross domestic product increased by approximately 35 percent from 1995 to 2005, after adjusting for inflation, the revenue of nonprofit groups rose by nearly 55 percent and their total assets grew by 77 percent. Nonprofit groups account for 5 percent of the gross domestic product, according to data reported in the Nonprofit Almanac, a compilation of figures about a range of trends in the nonprofit world, including the number of charities that work on specific causes, as well as information about their revenue and spending. The study also found that nonprofit groups: 

• Grew in number by more than 27 percent from 1995 to 2005.
• Contributed more than $666-billion to the economy through their activities.
• Received $1-trillion in revenue in 2006, a 5-percent increase from 2005.
• Employed 12.9 million people. Nonprofit groups pay 8.1 percent of the nation's wages, and employ 9.7 percent of its workers.

The Nonprofit Almanac 2008 is available from the Urban Institute Press for $39.50. To order, go to http://www.urban.org/uipress.