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Educational Consumer Tips

Charitable Giving – Via Mail, Phone, Door to Door, etc

Author: Better Business Bureau

This report is general in nature and is not intended as a reliability report on any company, service or product.

More than 80% of the money raised by charities in this country comes from individuals. To help these generous donors make wise giving decisions, the BBB Wise Giving Alliance offers the following tips on charitable giving: The basics

·          Do not give cash; always make contributions by check and make your check payable to the charity, not to the individual collecting the donation.

·          Keep records of your donations (receipts, canceled checks, and bank statements) so you can document your charitable giving at tax time. Although the value of your time as a volunteer is not deductible, out-of-pocket expenses (including transportation costs) directly related to your volunteer service to a charity are deductible.

·          Don't be fooled by names that look impressive or that closely resemble the name of a well-known organization.

·          Check out the organization with the local charity registration office (usually a division of the state attorney general's office) and with your BBB.

·          Under the Pennsylvania Charities Act, an organization is required to truthfully answer how much of your donation will be spent on charitable purposes as opposed to fund-raising or administrative expenses. To find out whether a charity is properly registered with the state of Pennsylvania, call 1-800-732-0999 or go to the PA Department of Charities site to search.

Mail Appeals

·          Mail appeals should clearly identify the charity and describe its programs in clear and specific language. Beware of appeals that bring tears to your eyes but tell you nothing of the charity or what it's doing about the problem it describes so well.

·          Appeals should not be disguised as bills or invoices. It is illegal to mail a bill, invoice, or statement of account due that is in fact an appeal for funds, unless it bears a clear and noticeable disclaimer stating that it is an appeal and that you are under no obligation to pay unless you accept the offer.

·          Deceptive invoices are most often aimed at business firms rather than individuals. Contact your BBB for detailed guidelines on how to handle appeals disguised as bills or invoices.

·          It is against the law to demand payment for unordered merchandise. If unordered items such as key rings, stamps, greeting cards, or pens are enclosed with an appeal letter, remember you are under no obligation to pay for or return the merchandise. If payment is requested, inform your BBB.  In our experience, unordered merchandise can mean high fundraising costs.

·          Appeals that include sweepstakes promotions should disclose that you do not have to contribute to be eligible for the prizes offered. To require a contribution would make the sweepstakes a lottery through the mail, and it is illegal to operate a lottery through the mail.

·          Matching check appeals are not subject to any particular legal requirements. Donors should keep in mind, however, that they do not have to return the checks if they don't contribute. The checks do not have any real value in and of themselves.

Telephone, Door-to-Door, And Street Solicitations

When you are approached for a contribution of either your time or your money, ask questions, and don't give a donation until you're satisfied with the answers. Charities with nothing to hide will encourage your interest. Be wary of their reluctance or inability to answer questions.

·          Ask for the charity's full name and address. Demand identification from the solicitor.

·          Ask if your contribution is tax deductible. Contributions to tax exempt organizations are not always tax deductible.

·          Ask if the charity is licensed by state and local authorities. Registration or licensing is required by most states and many communities. However, bear in mind that registration in and of itself does not imply that the state or local government endorses the charity. To find out whether a charity is properly registered with the state of Pennsylvania, call 1-800-732-0999 or go to the PA Department of Charities site to search.

·          Don't succumb to pressure to give money on the spot or allow a "runner" to pick up a contribution; the charity that needs your money today will welcome it just as much tomorrow.

·          Watch out for statements such as "all proceeds will go to the charity." This can mean that the money left after expenses, such as the cost of written materials and fund raising efforts, will go to the charity. These expenses can make a big difference, so check carefully.

·          When you're asked to buy candy, magazines, card, or tickets to a dinner or show to benefit a charity, be sure to ask what the charity's share will be. You cannot deduct the full amount paid for any such items, as the IRS considers only the part above the fair-market value of the item to be a charitable contribution. For example, if you pay $10 for a box of candy that normally sells for $8, only $2 can be claimed as a charitable donation.

·          Call your BBB if a fund raiser uses pressure tactics such as intimidation, threats, or repeated and harassing calls or visits. Such tactics violate your BBB’s recommended Standards for Charity Accountability.

From those charities to which you plan regular and/or substantial gifts, request a copy of the latest annual report, a list of board members, or the group's latest financial statements. This information should give you a clear idea of what kinds of programs the charity operates, how and where these programs are carried out, who governs the charity, how much of your dollar is spent on the charity's programs, and how much is spent on fundraising and administrative costs.

Also keep in mind that charity finances are just one part of a charity’s accountability. See the full text of your BBB’s Standards for Charity Accountability for other recommendations about such areas as charity governance, effectiveness, fund raising practices, website disclosures and donor privacy. For further assistance, contact the BBB Wise Giving Alliance.

Your BBB cannot recommend which organization you should support. This is a personal decision only you can make.

Updated 1/10