Charity: Check It First

Most charities are reputable and spend most of the money they raise on the causes they espouse. But an Orange County businessman’s fund-raising organizations demonstrate that donors should look carefully before they write checks.

Five states have sued San Juan Capistrano businessman Mitchell Gold’s companies over aggressive sales pitches, and four, including California, have prohibited his firms from raising funds. Gold has appealed the California judgment and says he has done nothing wrong. His firms continue to collect millions of dollars. No criminal charges have ever been filed against him.

While commercial firms in California that raised funds for charities passed on nearly 44% of the money they received in 1997, records indicate that Gold’s companies passed on only about 11% to a dozen or so charities they worked for from 1995 through 1997. No laws require that companies give a certain percentage of the funds raised to the charities that hire them. But donors would be wise to ask for that information.

In addition, potential contributors should be aware of certain practices. Some telemarketers have urged that checks be left under doormats for immediate pickup. Others spin heart-wrenching tales of injured firefighters needing assistance and sheriff’s deputies wounded in the line of duty.

The Federal Trade Commission filed a civil lawsuit in Santa Ana last November charging that telephone solicitors and subcontractors of Gold’s firms posed as police officers and firefighters to request donations. Some solicitors allegedly also claimed that the majority of money raised would go to charitable agencies. Gold has denied these accusations.

Organizations representing charitable groups say no one should feel pressured into making an immediate donation. Asking for written information after being solicited by phone also is a good idea. Checks made out to an organization, not cash given to a fund-raiser, also increase the likelihood that money will reach the intended recipient. It is unfortunate that people have to be so careful while trying to do good, but sometimes the caution is necessary.