Whether charitable organizations use their employees, volunteers or professional fund- raisers to solicit donations by phone, mail, or in person, consider the following precautions to ensure that your donation dollars benefit the people and programs you want to help.
-Ask for written information, including the charity's name, address, and telephone number. A legitimate charity or fund- raiser will give you materials outlining the charity's mission, how your donation will be used, and proof that your contribution is tax deductible.
-Ask for identification. 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, hang up and report it to local 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 fraudulent solicitor.
-Watch out for similar sounding names. Some phony charities use names that closely resemble those of respected, legitimate organizations.
-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 though an organization is tax exempt, your contribution may not be tax deductible. If deductibility is important to you, ask for a receipt showing the amount of your contribution and stating that it is tax deductible.
-Know that a 501(c)(3) organization must make a copy of its annual returns, (Form 990 or Form 990EZ) for the last three years and its exempt status application and supporting documents available for you to view during business hours.
-Be skeptical if someone thanks you for a pledge you don't remember making. If you have any doubt whether you've made a pledge or previously contributed, check your records. Be on the alert for invoices claiming you've made a pledge when you know you haven't. 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, and how much will cover the charity's administrative costs? If a professional fund-raiser is used, ask how much it will keep.
-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 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. You never have to donate anything to be eligible to win.
-Avoid cash gifts that can be lost or stolen. For security and tax record purposes, it's best to pay by check. Use the official full name of the charity - not initials - on your check. Avoid solicitors who want to send a courier or use an overnight delivery service to pick up your donation.
Philanthropic Advisory Service/ BBB Wise Giving Alliance Council of BBBs
4200 Wilson Boulevard, Suite 800
Arlington, VA 22203-1838
American Institute of Philanthropy
4905 Del Ray Avenue, Suite 300
(Source of info: http://www.ftc.gov/ftc/consumer.htm)