Business Tips

Know a charity before offering support

Appeals for monetary donations and gifts are a billion dollar industry. Faced with rising costs, loss of government funding, and increasing demand for services, charities are responding by asking for larger donations, often soliciting local and national businesses for support.

Better Business Bureau serving Upstate New York launched an investigation into Hero House Giveaway 2014 in Buffalo after receiving questions about the charity and the promotion. After the New York Gaming Commission confirmed that the regulations required for games of chance were not being followed, the organizer stated to BBB this week that Hero House Giveaway 2014 has ceased operations and that refunds will be issued to those who have already purchased ticket.

If your business sponsors charitable raffles or fundraising events, BBB offers the following tips:

Know the charity.  Get the full name, address and description of services.

Ask questions about the company's services, and whether or not your contribution is tax deductible. Payments to tax-exempt organizations are not always tax deductible. Don't pledge your time or money until you are satisfied with the answers.

Don't be pressured into giving money on the spot. The charity that needs your money today will welcome it just as much tomorrow.

Be wary of emotional appeals. Missing children, victims of famines, natural disasters and other catastrophic events, veterans’ organizations, etc. always tug at our emotions. Other names to watch out for include "police," "firefighter" or "cancer." Not all organizations that use these words in their name are reputable; some do so deliberately to create name confusion. Give to the organization(s) you are sure will use your money specifically for what it is intended.

Ask for documentation. Ask to see a copy of the organization's latest annual report, list of board members, and the latest financial statements. As a rule, an organization should spend at least 65% of its total expenses on program activities and no more than 35% of related contributions should be spent on fund-raising.

Be careful of mail solicitations. Appeals made through the mail should clearly identify the charity, and describe its programs in specific and clear language. Mail appeals should not be disguised as bills or invoices. It is against the law to demand payment for merchandise received by mail, which you did not order, and you are not obligated to pay for it.

Keep records of your donations. Receipts, canceled checks, bank statements should be kept to document your charitable giving at tax time. Do NOT give cash. Always make contributions by check, making the check out to the charity - NOT the individual. 

 

 

 

 

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