Charities throughout the country use the last month of the year to hit potential donors with requests for support through direct mail, telephone calls, in-person requests, and other approaches. Many charities collect a majority of their funds in the final month of the year, when many donors are trying to maximize tax deductions and may be swept up in holiday spirit.
Clearly the tough economic times have presented challenges for charities since needs for many types of services have increased. But donors need to make certain that their hard-earned contributions end up being used in the way they intend.
Sham charities and ineffective charities are competing for contributions along with organizations that make a difference in communities across the globe. It is the donor’s responsibility to ask questions and gather information about organizations before giving.
One of the most effective ways to be a wise donor is to adopt a giving plan in advance of requests. Identify organizations that appeal to you and have demonstrated effectiveness. Select organizations and programs with which you are familiar. This way, you can respond to all requests by saying you already have a giving plan. You could invite other groups to provide you with written information to determine if you want to add them to your list in the future. This well-planned approach eliminates the pressure of making quick decisions for each request.
Donors should research charities in advance of giving. Asking friends and families about organizations they have personally seen making an impact can be helpful. Another good start is to use the Research Charities function
on the Attorney General’s website. If an organization has registered with this office, basic information about the charity and whether it is in compliance with state registration requirements appears.
Other helpful sources of information on the site include:
The Internal Revenue Service’s Exempt Organizations Selection Check can be used to verify if an organization has a valid 501(c)(3) or other tax-exempt designation. The IRS also lists organizations that have had their tax-exempt status revoked.
Private watchdog organizations often review data on organizations and may grade them based on various spending standards and other procedures. Some of those groups are Wise Giving Alliance, Council of Better Business Bureaus or local BBB offices, CharityWatch, and Charity Navigator.
Organizations’ IRS Form 990 return can be viewed on Guidestar. A free registration process is required to access the reports. The 990 includes information on how the group raises and uses its funds along with other operational details. It is important to pay attention to what percent of expenditures are used on program expenses rather than management and fundraising expenses. Descriptions of programs and expenses are often revealing, as is reported information about travel and compensation levels. Self-dealing transactions between the charity and one or more of its directors should also be examined.
Internet searches can often reveal useful information about accomplishments of the organization or information about questionable activities.
The organization’s written and web-based materials also can be an important source of information.
Be suspicious when solicitors use high-pressure tactics during visits or telephone calls or offer to come to your house to pick up a check. Never make a check out to an individual, and beware of groups with names that are similar to, but different from, well-known organizations. Don’t provide credit card or banking information to callers when you did not expect a call from them.
Because some charities pay others to raise funds on their behalf, callers from professional solicitation firms must identify themselves as such during calls. Be certain to ask what percent of your gift will go to the charity rather than the solicitor.
The Attorney General’s office takes fraudulent solicitation cases seriously. Charities and their representatives are never permitted to lie when asking for support. If you have concerns about a potential sham charity or questionable fundraising activities, please file a complaint with the Attorney General’s Charitable Law Section by calling 800-282-0515 or visiting the website