Monetary Donations

Monetary donations can be extremely helpful to families whose lives have been turned upside down by the disappearance of a child. They can be used to help finance the search, fund a reward, or support the family if a parent is unable to work during the search process. But donations can also present problems if they are not managed properly. For this reason, you need to be aware of some important accounting and accountability issues that, if not handled correctly, could result in legal and financial ruin.

Make sure that both you and your contributors know how the money will be used. Donations can be used for many different purposes, depending upon your need. Ask that donations be earmarked for a specific purpose -- such as the reward fund, the search fund, or the family support fund -- and if they are not, ask one of your volunteers to call the donor to find out to which fund the donation should be given. Seek professional help from both a lawyer and a banker to help you establish separate trusts
and accounts and to oversee disbursements.

Keep separate bank accounts for each fund. If accounts are set up properly, donors will feel comfortable that records of the money are being kept and that donations are being used for the specified purpose. Creating a trust fund -- or at least establishing safeguards, such as requiring dual signatures on checks and maintaining accurate records -- is crucial. You must make sure that funds earmarked for a specific purpose are, in fact, being used for that purpose.

Avoid having direct control over any funds received. Parents should not solicit funds on their own. Use volunteer groups for this purpose instead. Parents also should not have any signatory control over the funds, because there have been instances in which someone attempted to extort the reward money from parents by force. Protect yourself from this kind of danger by putting the money, and the power to access it, in someone else's hands.

Designate trusted individuals outside the family to have signature authority over the accounts. By removing yourself from the control of the funds, you eliminate any unnecessary scrutiny by members of the public or the media about the use of the funds. Make sure that the individuals selected for this task are trustworthy and that they understand their role and potential liability.

Maintain accurate records that show where the donations came from and how the money was spent. Make sure that the individuals with signature authority maintain proper records on all income and expenditures. A list of donors should be maintained so thank-you letters can be sent, and copies of receipts for all expenditures should be kept in case questions arise. Ask a banker to help you establish proper accounting procedures, or ask for pro bono help from an attorney or an accountant.

Be honest with the public. Be prepared for questions, which may turn into accusations, concerning the use of donated funds. Designate one person -- who could be you or a trusted friend or family member -- to answer all questions concerning how the funds are being spent. Information concerning the number of donations or the amount in the accounts should never be released to the media.

Specify what will happen to the reward in the event your child is located before the money is spent. Sometimes large sums of money in a reward fund are left unspent. Therefore, you need to establish written procedures for how the money is to be dispensed if it cannot be used for the reward. For example, you can specify that all donations over a certain amount are to be returned, if the donor is traceable, or that unused funds are to be donated to an organization or agency that helped with the search. Excess reward fund money should never be used for the family's personal expenses, because that was not the purpose of the fund. Again, talk with an attorney to determine how to handle this situation.

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