With Thanksgiving approaching, we are reminded to be appreciative of what we have; oftentimes, this leads to opening up our hearts (and wallets) to those in need. Unfortunately, there are those who would use dishonesty to profit from a giving heart.
Earlier this year the Federal Trade Commission and Attorneys General of 50 states prosecuted and fined four national cancer charities allegedly run by one family, which collected over $187 million but spent nearly all of it on themselves.
Fake charities are everywhere, and the level of energy con artists use to make their schemes seem legitimate can make it difficult to differentiate them from real giving organizations. When donating to charities, it is important to take the time to get to know the charity and conduct your own investigations about their mission.
If a charity is contacting you via phone—listen to their pitch, but give them no personal information and hang up. Telephone solicitation is expensive and some of the money you give will be used to pay the person who called you. If you are interested, investigate the charity online and donate directly to them to eliminate that “middle man” who just called. This will ensure that all of your money will go to the charity and not the person calling you on the phone.
Today’s cost of operating a charity makes it virtually impossible for a charity to direct 100 percent of your contribution to program activities. Yet, be aware that efficient charities spend about 75 percent on programs and services, and less than 25 percent on fundraising and administrative fees. The best way to make sure your donation helps the right people is to do a little research.
Ways to check legitimacy of a charity:
- Proper licensing. Check with the Charity Division of the State Office of the Attorney General at
808-586-1480 or go online to the American Institute of Philanthropy at www.charitywatch.org.
- Proper registering. A properly approved charity should be registered with the IRS as a 501(c)
(3) charity to receive tax-deductible contributions. Check online with the IRS at www.irs.gov.
Lastly, keep a record of all your donations and who you help support. This can help you plan
your charitable giving and avoid just responding to the numerous solicitations (junk mail) you will
receive once you do decide to give.