Your charity dollars are an investment in your community, the nation, and the world. The Federal Trade Commission (FTC), the nation’s consumer protection agency, says it’s wise to be cautious when making your donation decisions so you can avoid scam artists who try to make money by taking advantage of your generosity.

Charity Checklist
Consider the following precautions to help ensure that your donation dollars benefit the people and organizations you want to help. They make sense whether you’re solicited by an organization’s employees, volunteers, or professional fundraisers by phone, mail, e-mail, or in person.

• 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 the donations to the affected areas or people.
  
  
• Ask for written information about the charity, including the name, address, and telephone number. A legitimate charity or fundraiser will send you information about the charity’s mission, how your donation will be used, and proof that your contribution is tax deductible.
  
  
• 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.
  
  
• 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.
  Check with local recipients. If giving to local organizations is important to you, make sure they will benefit from your generosity. If a charity tells you that your dollars will support a local organization, like a fire department, police department, or hospital, call the organization to verify the claim.
  
  
• 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.
  
  
• 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 if an organization is tax exempt, your contribution may not be tax deductible. If a tax deduction is important to you, ask for a receipt showing the amount of your contribution and stating that it is tax deductible.
  
  
• Look twice at organizations that use meaningless terms to suggest they are tax exempt charities. For example, the fact that an organization has a “tax I.D. number” doesn’t mean it is a charity; every nonprofit and for-profit organization must have a tax I.D. number. And an invoice that tells you to “keep this receipt for your records” doesn’t mean that your donation is tax deductible or that the organization is tax exempt.
  
  
• 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.
  
  
• Refuse high pressure appeals. Legitimate fundraisers generally don’t push you to give on the spot.
  
  
• Be wary of charities offering to send a courier or overnight delivery service 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 fundraising tool, less money may be available for the charity.
  
  
• 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.
  
  
• 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 check — made payable to the charity, not the solicitor. 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”).

Checking Up

Before you open your checkbook, check out the charity you’re considering with these organizations. Note: Many small, new, or local charities may not be rated by the organizations listed here. Some fraternal organizations, like police and firefighter groups, may not be rated at all. If the charity seeking your donation is not listed or rated, follow the precautions listed under the Charity Checklist to help you determine whether it merits your donation dollars.

BBB Wise Giving Alliance
4200 Wilson Boulevard, Suite 800
Arlington, VA 22203
(703) 276-0100
www.bbb.org/charity

American Institute of Philanthropy
P.O. Box 578460
Chicago, IL 60657
(773) 529-2300
www.charitywatch.org

Charity Navigator
1200 MacArthur Boulevard
Mahwah, NJ 07430
(201) 818-1288
www.charitynavigator.org

GuideStar
4801 Courthouse Street, Suite 220
Williamsburg, VA 23188
(757) 229-4631
www.guidestar.org

Military Relief Societies
Although the U.S. Department of Defense does not endorse any charity, you can learn about military relief societies at
www.militaryhomefront.dod.mil.

 Credit: http://www.ftc.gov/bcp/edu/pubs/consumer/telemarketing/tel01.shtm

Source:
Federal Trade Commission
To learn more information about making your donations count, visit www.ftc.gov/charityfraud.

If you believe an organization may not be operating for charitable purposes, or is making misleading solicitations, contact your state Attorney General (www.naag.org) or your local consumer protection agency (www.consumeraction.gov). You can get the phone numbers for these organizations in your phone book or through Web directories.

You also may file a complaint with the Federal Trade Commission.

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

Related Information:

NBA Strategic Partner - U.S. Patent and Trademark Office (USPTO)

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Reprint of this article does not constitute an endorsement by the National Business Association; the article is for informational purposes for our members and viewers of our Web site.