Industry Tips
Giving to Charities
Give Well: A Guide to Giving Wisely
The Federal Trade Commission (FTC) and Better Business Bureau (BBB), offer these tips to help you make the most of your charitable donations:
· Donate to recognized charities with a history. Charities that spring up overnight in connection with a recent natural disaster or news story may disappear just as quickly with your donation. Even if the charity is well-meaning, it may lack the infrastructure to provide much assistance.
· Be wary of charities with names that are similar to the names of well-known organizations. Some phony charities use names that sound or look like those of respected, legitimate organizations to gain your trust.
· Give directly to the charity, not to paid solicitors who contact you on the charity’s behalf. Some charities hire professional fund-raisers, who then keep a portion of the money they collect. That leaves less money for good works. Ask whether the person is a paid fund-raiser and, if so, what percentage of your donation goes to the charity. If you’re not comfortable with the amount, you may consider donating to a different organization or sending your gift directly to the charity.
· Don’t give out personal or financial information — including your Social Security number or credit card and bank account numbers — to anyone who solicits a contribution from you. Scam artists use this information to commit fraud against you.
· Check out the charity before you donate. You can look it up at charity-rating sites, such as the Better Business Bureau’s Wise Giving Alliance at Give.org, www.charitynavigator.org, www.charitywatch.org, or www.guidestar.org.
· Don’t give or send cash. For security and tax record purposes, contribute by check or credit card. Write the official name of the charity on your check. You can contribute safely online through many official charity websites. Look for signs that the site is secure — such as a closed padlock on the browser’s status bar — before you enter any personal information. When you are asked to provide payment information, the website URL should change from http to shttp or https, which indicates that the transaction is encrypted or secure.
· Ask for identification and written information when you’re approached in person. Written materials could include the name, address, and telephone number of the organization, and information about the charity’s mission, how your donation will be used, and proof that your contribution is tax deductible. When in doubt, call the charity to make sure it is aware of the solicitation and has authorized the use of its name.
· Before donating to a charity, contact BBB for information on the organization. BBB has Charity Reports available to the public upon request. The Catalogue for Philanthropy is another valuable resource for charity information to consider when making a donation: http://www.catalogueforphilanthropy.org/natl/
Charity Checklist
Thinking about donating to a charity? We recommend taking these precautions to ensure that your donation dollars benefit the people and organizations you want to help. They’re sensible practices whether you’re solicited by an organization’s employees, volunteers, or professional fundraisers by phone, mail, email, or in person.
· Don’t be shy about asking who wants your money. Some charities hire professional fundraisers for large-scale mailings, telephone drives, and other solicitations rather than use their own staff or volunteers, and then use a portion of the donations to pay the fundraiser’s fees. If you’re solicited for a donation, ask if the caller is a paid fundraiser, who they work for, and the percentage of your donation that will go to the charity and to the fundraiser. If you don’t get a clear answer — or if you don’t like the answer you get — consider donating to a different organization.
· 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.
· Ask for written information about the charity, including name, address, and telephone number.
· Contact the office that regulates charitable organizations and charitable solicitations in your state to see if the charity or fundraiser must be registered. If so, check to make sure that the company you’re talking to is registered. For a list of state offices, visit the National Association of State Charity Officials at www.nasconet.org/agencies. Your state office also can verify how much of your donation goes to the charity, and how much goes to fundraising and management expenses.
· You also can check out charities with Better Business Bureau’s (BBB) Wise Giving Alliance (www.bbb.org/charity).
· Trust your gut — and check your records if you have any doubt about whether you’ve made a pledge or a contribution. Callers may try to trick you by thanking you for a pledge you didn’t make. If you don’t remember making the donation or don’t have a record of your pledge, resist the pressure to give.
· Be wary of charities that spring up overnight in connection with current events or natural disasters. They may make a compelling case for your money, but as a practical matter, they probably don’t have the infrastructure to get your donation to the affected area or people.
· 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.
· Be cautious of promises of guaranteed sweepstakes winnings in exchange for a contribution. According to U.S. law, you never have to give a donation to be eligible to win a sweepstakes.
· Be wary of charities offering to send a courier or overnight delivery service to collect your donation immediately.
· 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.
· Do not send or give cash donations. Cash can be lost or stolen. For security and tax record purposes, it’s best to pay by credit card. If you’re thinking about giving online, look for indicators that the site is secure, like a lock icon on the browser’s status bar or a URL that begins “https:” (the “s” stands for “secure”).
· For more information about making your donations count, visit www.ftc.gov/charityfraud.
Helping Family and Friends Avoid Charity Fraud
Charities perform so many vital services in our communities. And in today’s tough economy, many charities are dealing with a variety of ups and downs: increases in the demand for service, and decreases in funding, to name just two. To meet their challenges, many are asking for bigger contributions, asking for contributions more often, and looking for a bigger pool of donors. In addition, legitimate charities are facing competition from fraudsters who either solicit for bogus charities or aren’t entirely honest about how the so-called charity will use contributions.
The Warning Signs of a Charity Scam
How can you tell whether someone you care about is the target of a charity scam — or whether you are yourself? The Federal Trade Commission, the nation’s consumer protection agency, suggests that donors should avoid any charity or fundraiser that:
· refuses to provide written information about its identity, its mission, its costs, and how the donation will be used;
· will not provide proof that a contribution is tax deductible;
· uses a name that closely resembles that of a better-known, reputable organization;
· thanks a potential donor for a pledge the person doesn’t remember making;
· asks a potential contributor for bank account or credit card information before the person has reviewed the organization’s information and agreed to contribute;
· uses high-pressure tactics to secure a donation before the potential donor has had a chance to make an informed decision about giving;
· asks for donations in cash;
· offers to send a courier or overnight delivery service to collect the donation immediately;
· guarantees sweepstakes winnings in exchange for a contribution.
