As Contributions to Charities Increase, So Do Suspicions About Them

Charitable giving is up, but giving with confidence is not. Americans harbor more than a grain of suspicion about the calls, mail and door-to-door seekers wanting a piece of their philanthropic pie.

With President Clinton leading a community service conference starting Sunday in Philadelphia, charities are expecting a surge of interest in good works.

Tools exist to identify groups that put public support to good use. Charity watchdogs, and methods people can use on their own, help shut the questionable ones out.

Ever since some folks pocketed money raised during World War I for the doughboys in the European trenches, charity checkers have been waving red flags over suspect philanthropies, estimated by federal officials to consume $1.5 billion a year.

That’s a small portion of the more than $120 billion Americans donate. But according to measurements by Independent Sector, representing almost 800 charities, both contributions and distrust are increasing.

Chief among the guidelines for safe giving and volunteering: Demand detailed written descriptions of the charity’s mission and spending, resist overly emotional “emergency” appeals and don’t commit on the spot to unfamiliar groups.

These are rules Independent Sector President Sara Melendez follows.

“If I’ve never heard of them, I would never send them a check until they send me some information,” she said. “I would want to see how they are spending the money.”

The 80-year-old National Charities Information Bureau and the Better Business Bureau’s Philanthropic Advisory Service rate hundreds of charities on their compliance with standards. They are recommended by the Federal Trade Commission and many nonprofits. Anyone can contact them to check a charity before supporting it.

The bureaus’ lists are large but not exhaustive. The monitors note when a charity refuses to give information.

“The wise donor is going to look into an organization before deciding to devote efforts to it,” said Bennett Weiner, head of the business bureau’s philanthropic service in Arlington, Va.

In many cases, people’s time may be an even larger commitment than money, he said, and “that’s all the more reason that they should be comfortable with the choice they have made.”

Melendez said charity monitors are useful but may miss nuances, such as a legitimate boost in fund-raising expenses to cover a capital investment.

When a charity falls short of standards, people should ask tough questions of the group but not necessarily write it off, she said. The watchdogs say they are sensitive to reasonable spikes in expenses or fund-raising.

Familiarity alone is not sufficient reassurance. The United Way of America reeled in the early 1990s from fraudulent spending by its boss of that era. Far less dramatic problems of accountability crop up with other famous groups.

A 1996 Gallup Poll done for the Independent Sector found giving had increased 10% over two years, after inflation, with the average contributing household donating $1,017. But almost one-third in the poll questioned whether most charities use the money honestly, up from one-fifth in 1990.

Charity checkers say at least 50% or 60% of a charity’s income should be spent on programs.

Most do better than that, but sending letters that advocate or inform while asking for money may be all that some nonprofits do.

Donors can also contact officials in the majority of states that require charities to be registered. Registration does not prove legitimacy, but it helps.

Also, nonchurch charities with income over $25,000 must file with the Internal Revenue Service Form 990, which is then available to the public. It shows financial breakdowns and top salaries.

GuideStar, a service of Philanthropic Research of Williamsburg, Va., produces revenue and spending charts on more than 40,000 nonprofits based on their 990s.

The recently formed American Institute of Philanthropy in St. Louis emphasizes spending, fund-raising and the size of charities’ reserves in its analyses.

If all that makes anyone want to give up on giving, charity checkers are quick to appeal for that not to happen.

They say a bit of investigating before giving can be something of a charitable act in itself.

“The unscrupulous operators out there are counting on the fact that you won’t bother to do any checking,” Weiner said. “That’s what allows them to continue.”