Some Charity Pitches Require Closer Look

This is, among other things, high season for charitable solicitations--bell-ringers, people canvassing neighborhoods for various missions, kids selling candy at supermarkets, dinner-time telephoners, direct-mail pleas for cancer research, children, the homeless.

Sympathetic, eager to help, the consumer is often suspicious. He’s still a consumer, after all, buying unseen benefits for unknown recipients.

Even when questioned, some solicitors have no answers, no literature, no phone, no office one can visit. “ ‘All that costs money,’ they say, ‘and that’s food out of the mouths of the needy,’ ” says Bill Newsome, head of the San Diego city attorney’s consumer fraud unit. “Anything you want to do to investigate always takes money out of the mouths of the needy.”

“Most charities are on the up-and-up,” says Kenneth Albrecht, president of the National Charities Information Bureau in New York, “but there are some bad apples, and it’s increasingly difficult for people to know which are legitimate.”

They come now from all directions. Direct-mail solicitations often involve large national organizations and their local affiliates, whose names are familiar, or seem familiar. “If an organization succeeds in raising money,” says Albrecht, “someone will come and hop on the bandwagon with something close to it.” Who knows the differences among the American Cancer Society (the oldest), National Cancer Center, Cancer Research Council, National Children’s Cancer Society, Cancer Research Foundation of America, etc., etc.

The telephone calls (“usually at dinner time because they’re more likely to find people at home,” says Albrecht) are often from professional telemarketing companies operating nationally. They take a percentage, sometimes hefty, of whatever money they raise for an organization and may also take out money to cover the cost of an associated event or product, leaving as little as 5% to 10% to the charity. Many send a local messenger that very evening to pick up the promised money, “to be sure,” says Newsome, “that you don’t start to contemplate what you’re doing.”

The telephone itself is engaging, says Albrecht: “You can’t just put it aside like mail.” Some people can, of course. “With the telephone,” says Albrecht, “you may get only half as many people giving, but you might get twice as much from each.”

Door-to-door solicitations are more involving yet, but more threatening to the resident.

They also take more time and effort from the fund-raiser, so the pros generally leave them to local church volunteers, school kids and, too often, petty crooks.

In three-quarters of the states and some cities, charities and charity solicitors must register and provide some administrative and/or financial information. This doesn’t mean everybody: Religious organizations are often exempt, and hospitals, and some educational institutions, and anyone collecting relatively small amounts (less than $25,000 nationwide, for example).

Nor are registered groups always investigated. In some states, the financial information is reviewed to see “how much money was actually spent on what types of programs,” says David Ormstedt, Connecticut’s assistant attorney general in charge of charitable trusts and solicitations, and such audits may lead to prosecutions of groups failing in their duty to a charitable public. Or the material may just be collected and made available, but that alone guarantees that “we know who they are, and we’re getting the information before the public,” says Sheila Fishman, Minnesota’s assistant attorney general in charge of charities.

Many states, California included, require that solicitors give consumers full disclosure of their identity, location, purpose and expenditures, including the amounts actually going to the charitable program.

Here, too, there are exceptions: In California, for example, solicitors who aren’t selling anything or receiving any personal compensation can just refer everyone to the organization for financial information. And thanks to a recent Supreme Court decision, no one need disclose such financial information up front because it might have a “chilling” effect on the presentation, thus violating the group’s right of free speech.

Reports on various charitable operations are also compiled by the National Charities Information Bureau, which measures the information volunteered by each organization against bureau standards of management, accountability and financial activity (therefore at least 60% of expenditures should go to charitable programs, apart from fund-raising and administration).

But the NCIB necessarily limits itself to national organizations and those that precipitate some inquiry. Its reports, moreover, aren’t easy reading for those unfamiliar with finance or charitable endeavors, although they’re a good guide to the kind of questions one might ask about organizations in what Albrecht calls “the no man’s land between those that clearly meet standards and those that clearly don’t.”

None of these reports, alas, are much help to consumers at the moment they’re solicited, and “you can pass all the laws you want,” says Newsome, “but when the person’s at the door or in the supermarket parking lot, an individual can’t protect himself, can’t be sure the money’s going where they say.”

Everybody says to ask anyway: “If you’re not familiar with the organization, ask for information and give later,” says Fishman. And tell all dinner time callers, says Albrecht, “I don’t make pledges over the phone; if you want to send me something, fine.”

As with all consumer transactions, the best protection is a feisty consumer, wanting to put his donations where they’ll do some real good. He should choose his charities, asking what each does, specifically, and with how much of its money, specifically. He should ask where it is and who runs it and the position and compensation, if any, of the solicitor.

The very exercise of asking is good for both parties, forcing the solicitor to prove himself and his organization and forcing the solicited to put some time and thought into the transaction. What’s more, says Albrecht, “you should know why you’re giving, whether you’re motivated by your own interest in heart disease or the homeless, or just by a sob story.”

“People get caught up,” he adds, “motivated by their heart, but they better get their brain involved, too.”