You may have contributed some of the
$212 billion raised for charities in 2001. Unfortunately, a portion
of that amount may have been misused or ended up in the pockets of
fraudulent solicitors. With more than 700,000 federally recognized
charities soliciting for charitable contributions, it pays to be
cautious when making a donation.
Your charity dollars are an investment
in your community, the nation and the world. It’s wise to use just
as much caution when making your charitable giving decisions as you
do when making other decisions affecting your overall financial
picture.
Paid
Fund-Raisers
Some charities find it efficient to pay professional fund-raisers —
to handle large scale mailings, telephone drives and other
solicitations — rather than use their own staff or volunteers.
Professional fund-raisers are in business to make money and are
entitled to keep a portion of the money they collect. If you’re
solicited for a donation, you may want to ask if the caller is a
paid fund-raiser and what percentage of your donation the
fund-raiser will keep. If you’re not comfortable with the amount,
you may want to donate to a different organization, or send your
donation directly to the charity so that they benefit from the full
amount of your check.
Reducing
Telephone and Direct Mail Solicitations
If you feel overwhelmed with direct mail requests for donations, you
can help to reduce the number of those solicitations. Typically,
when you donate to a charity, your name is placed on the charity’s
mailing list. The charity uses this list to re-contact you and often
rents it or exchanges it with other organizations. You can stop the
sharing of your information by including a note with your donation
asking the charity not rent, sell or exchange your personal
information and donation history. You also can ask a nonprofit
organization to limit its donation requests to once or twice a year.
If the organization fails to honor your requests, you may wish to
find a different charity to support.
The Federal Trade Commission’s (FTC)
Telemarketing Sales Rule applies to telemarketers who make calls
across state lines on behalf of charitable organizations. The Rule
restricts calling times to the hours between 8 a.m. and 9 p.m. The
Rule also requires telemarketers to promptly identify the charitable
organization they represent and disclose that the purpose of the
call is to ask for a contribution. Telemarketers may not mislead or
lie to obtain a contribution. A consumer who does not want
additional telephone calls from a paid fund-raiser can ask to be
placed on the fund-raiser’s “do not call” list. If the fund-raiser
calls again, they may be subject to a fine of up to $11,000.
The federal government has created
the National Do Not Call Registry — the free, easy way to reduce the
telemarketing calls you get at home. To register, or to get
information, visit
www.donotcall.gov, or call 1-888-382-1222 from the phone you
want to register. You will receive fewer telemarketing calls within
three months of registering your number. It will stay in the
registry for five years or until it is disconected or you take it
off the registry. After five years, you will be able to renew your
registration.
Many states have their own
regulations regarding charitable solicitations. Some require paid
fund-raisers to identify themselves as such and to name the charity
for which they are soliciting, even if the call is in-state. To
learn about the law in your state, check out links to state charity
regulators at the National Association of State Charity Officials
Web site –
www.nasconet.org. Legitimate direct mail solicitations often
list the contact information for regulators in the states they
solicit.
The Direct Marketing Association’s (DMA) Mail Preference Service
lets you opt out of receiving direct mail marketing from many
national companies for five years. When you register with this
service, your name will be put on a “delete” file and made available
to direct-mail marketers. However, your registration will not stop
mailings from organizations that are not registered with the DMA’s
Mail Preference Service. To register with DMA, send your letter to:
Direct
Marketing Association
Mail Preference Service
PO Box 643
Carmel, NY 10512
Or register online at
www.the-dma.org/consumers/offmailinglist.html.
Charity
Checklist
Consider the following precautions to ensure that your donation
dollars benefit the people and organizations you want to help.
They’re good practices whether you’re contacted by an organization’s
employees, volunteers or professional fund-raisers, soliciting
donations by phone, mail or in person.
- Be wary of appeals that tug
at your heart strings, especially pleas involving patriotism and
current events. Although the Department of Defense does not
endorse any specific war related charity, you can visit their
Web site at
www.army.mil/operations/oif/FAQ.html to find out about
military relief societies that provide assistance to U.S.
Servicemembers and their families.
- Ask for written information
about the charity, including name, address and telephone number.
A legitimate charity or fund-raiser will give you information
about the charity’s mission, how your donation will be used and
proof that your contribution is tax deductible.
- Check out the charity’s
financial information. For many organizations, this
information can be found online at
www.guidestar.org or at GuideStar, 427 Scotland Street,
Williamsburg, VA 23185; 757-229-4631.
- Ask for identification.
The Telemarketing Sales Rule requires for-profit fund-raisers to
disclose the name of the charity requesting the donation. Many
states require paid fund-raisers to identify themselves as such
and to name the charity for which they’re soliciting. If the
solicitor refuses to tell you, hang up and report it to law
enforcement officials.
- Call the charity. Find
out if the organization is aware of the solicitation and has
authorized the use of its name. If not, you may be dealing with
a scam artist.
- Check with local recipients.
If giving to local organizations is important to you, make
sure they will benefit from your generosity. If a charity tells
you that your dollars will support a local organization, such as
a fire department, police department or hospital, call the
organization to verify the claim.
- Watch out for similar
sounding names. Some phony charities use names that
closely resemble those of respected, legitimate organizations.
If you notice a small difference from the name of the charity
you intend to deal with, call the organization you know to check
it out.
- Know the difference between
“tax exempt” and “tax deductible.” Tax exempt means the
organization doesn’t have to pay taxes. Tax deductible means you
can deduct your contribution on your federal income tax return.
Even if an organization is tax exempt, your contribution may not
be tax deductible. If a tax deduction is important to you, ask
for a receipt showing the amount of your contribution and
stating that it is tax deductible.
Beware of organizations that use
meaningless terms to suggest they are tax exempt charities. For
example, the fact that an organization has a “tax I.D. number”
doesn’t mean it is a charity; every nonprofit and for-profit
organization must have a tax I.D. number. And an invoice that tells
you to “keep this receipt for your records” doesn’t mean that your
donation is tax deductible or that the organization is tax exempt.
- Be skeptical if someone
thanks you for a pledge you don’t remember making. If you
have any doubts about whether you’ve made a pledge or previously
contributed, check your records. Be on the alert for invoices
claiming you’ve made a pledge. Some unscrupulous solicitors use
this approach to get your money.
- Ask how your donation will
be distributed. How much will go to the program you want to
support (as opposed to other programs of the nonprofit), and how
much will cover the charity’s administrative and telemarketing
costs?
- Refuse high pressure
appeals. Legitimate fund-raisers won’t push you to give on
the spot.
- Be wary of charities
offering to send a courier or overnight delivery service to
collect your donation immediately.
- Consider the costs.
When buying merchandise or tickets for special events, or when
receiving “free” goods in exchange for giving, remember that
these items cost money and generally are paid for out of your
contribution. Although this can be an effective fund-raising
tool, less money may be available for the charity.
- Be wary of guaranteed
sweepstakes winnings in exchange for a contribution.
According to law, you never have to donate anything to be
eligible to win.
- Avoid cash gifts. Cash
can be lost or stolen. For security and tax record purposes,
it’s best to pay by check.
Charity
Check-Up
Many charities use your donations wisely. Others may spend much of
your contribution on administrative expenses or more fund-raising
efforts. Some may misrepresent their fund-raising intentions or
solicit for phony causes.
Before you open your checkbook, check
out the charity you’re considering with these organizations:
BBB Wise
Giving Alliance
4200 Wilson Boulevard, Suite 800
Arlington, VA 22203
(703) 276-0100
www.give.org
American
Institute of Philanthropy
3450 Lake Shore Dr., Suite 2802 E
Chicago, IL 60657
(773) 529-2300
www.charitywatch.org
GuideStar
427 Scotland Street
Williamsburg, VA 23185
(757) 229-4631
www.guidestar.org
Your
Local Charity Registration Office
Most states require charities to be registered or licensed by the
state. Check with your state Attorney General’s office or Secretary
of State. You can find a list of state charity regulators at the
National Association of State Charity Officials Web site —
www.nasconet.org.
Many smaller, newer or local
charities may not be rated by the organizations listed here. Some
fraternal organizations, such as police and fire groups may not be
rated at all. If the charity seeking your donation is not listed or
rated, follow the precautions listed under Charity Checklist to help
you determine whether an organization deserves your donation
dollars.
Where to
Complain
If you believe an organization may not be operating for charitable
purposes, is making misleading solicitations or is ignoring requests
to be placed on a “do not call” list, contact your state Attorney
General, your local consumer protection office or the Federal Trade
Commission.
