Feel Generous? Charity Begins With Homework
A little detective work about a charity is critical to make sure your dollars are going to a legitimate charity that uses donations the way you prefer. Ask questions. If you don’t like what you hear, ask more.
* Check the name of the charity to make sure it is the one you really think it is, not a sound-alike organization. For example, the American Cancer Society is so concerned about sound-alike charities it publishes a 47-page manual on the subject.
* Evaluate the charity’s appeal on the facts it presents. Don’t be taken in by dramatic or heart-rending appeals that give no substantive information about the group.
* Beware of any charity that refuses to give you a breakdown of where its money goes. In addition to asking for a charity’s annual report, ask to see its Internal Revenue Service Form 990, which specifically lists how much the charity raises and how the money is spent. If your request is refused, write your local IRS office for a copy of the 990 form. The IRS can fine or remove that charity’s nonprofit status for non-disclosure to the public.
* Check the total amount the group spends on programs. As a rule, experts say, a charity should spend at least 60% on its programs. Find out what the charity spends on fund-raising each year and compare it to what it gets in contributions. If the group spends more than 30% on fund-raising, take a closer look. A charity should not pay a salary to its board members, experts say.
* Don’t succumb to pressure tactics during telephone or door-to-door solicitations in which representatives ask you to give on the spot. Bona fide charities will welcome your money a week later.
* Never give a cash contribution or make a pledge with your credit card number if you don’t know the caller soliciting you. Send a check or money order in the name of the charity; never make it out to the person soliciting.
* If you’re asked to buy a ticket for a fund-raising dinner or dance, ask how much of the ticket cost will count for a charitable donation on your federal taxes. You can write off only the part of the contribution that exceeds the value of the event.
* If you like what the charity does, but can’t afford to give money, consider volunteering your time or giving household items. Many charities consider these contributions just as important as money.
* If you think the group soliciting you is bogus, check with local authorities that register or evaluate charities. Contact the Los Angeles Department of Social Service, the Los Angeles County Business License Commission, the California State Attorney General’s office or the Los Angeles Better Business Bureau.
Sources: National Charities Information Bureau; Council of Better Business Bureaus Inc.