FTC FACTS for Consumers

FOR THE CONSUMER 1-877-FTC-HELP

www.ftc.gov FEDERAL TRADE COMMISSION

ou may have contributed some of the $212 billion raised for charities in 2001. 

Unfortunately, a portion of that amount may have been misused or ended 

up in the pockets of fraudulent solicitors. With more than 700,000 federally 

recognized charities soliciting for charitable contributions, it pays to be cautious 

when making a donation. 

Your charity dollars are an investment in your community, the nation and the world. It’s 

wise to use just as much caution when making your charitable giving decisions as you do 

when making other decisions affecting your overall financial picture.

Paid Fund-Raisers

Some charities find it efficient to pay professional fund-raisers — to handle large scale 

mailings, telephone drives and other solicitations — rather than use their own staff or 

volunteers. Professional fund-raisers are in business to make money and are entitled to keep 

a portion of the money they collect. If you’re solicited for a donation, you may want to ask 

if the caller is a paid fund-raiser and what percentage of your donation the fund-raiser will 

keep. If you’re not comfortable with the amount, you may want to donate to a different 

organization, or send your donation directly to the charity so that they benefit from the full 

amount of your check.

Reducing Telephone and Direct Mail Solicitations

If you feel overwhelmed with direct mail requests for donations, you can help to reduce the 

number of those solicitations. Typically, when you donate to a charity, your name is placed 

on the charity’s mailing list. The charity uses this list to re-contact you and often rents it 

or exchanges it with other organizations. You can stop the sharing of your information 

by including a note with your donation asking the charity not rent, sell or exchange your 

personal information and donation history. You also can ask a nonprofit organization to limit 

its donation requests to once or twice a year. If the organization fails to honor your requests, 

you may wish to find a different charity to support.

TELEMARKETING

Charitable Donations: 

Give or Take?

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Facts for Consumers 

The Federal Trade Commission’s (FTC) 

Telemarketing Sales Rule applies to telemarketers 

who make calls across state lines on behalf of 

charitable organizations. The Rule restricts calling 

times to the hours between 8 a.m. and 9 p.m. 

The Rule also requires telemarketers to promptly 

identify the charitable organization they represent 

and disclose that the purpose of the call is to ask 

for a contribution. Telemarketers may not mislead 

or lie to obtain a contribution. A consumer who 

does not want additional telephone calls from 

a paid fund-raiser can ask to be placed on the 

fund-raiser’s “do not call” list. If the fund-raiser 

calls again, they may be subject to a fine of up to 

$11,000. 

The federal government has created the National 

Do Not Call Registry — the free, easy way to 

reduce the telemarketing calls you get at home. 

To register, or to get information, visit www.

donotcall.gov, or call 1-888-382-1222 from the 

phone you want to register. You will receive 

fewer telemarketing calls wwithin three months 

of registering your number. It will stay in the 

registry for five years or until it is disconected or 

you take it off the registry. After five years, you 

will be able to renew your registration.

Many states have their own regulations regarding 

charitable solicitations. Some require paid fundraisers to identify themselves as such and to name 

the charity for which they are soliciting, even if 

the call is in-state. To learn about the law in your 

state, check out links to state charity regulators at 

the National Association of State Charity Officials 

Web site – www.nasconet.org. Legitimate direct 

mail solicitations often list the contact information 

for regulators in the states they solicit. 

The Direct Marketing Association’s (DMA) Mail 

Preference Service lets you opt out of receiving 

direct mail marketing from many national 

companies for five years. When you register with 

this service, your name will be put on a “delete” 

file and made available to direct-mail marketers. 

However, your registration will not stop mailings 

from organizations that are not registered with the 

DMA’s Mail Preference Service. To register with 

DMA, send your letter to:

Direct Marketing Association

Mail Preference Service

PO Box 643

Carmel, NY 10512

Or register online at www.the-dma.org/

consumers/offmailinglist.html.

Charity Checklist

Consider the following precautions to ensure 

that your donation dollars benefit the people 

and organizations you want to help. They’re 

good practices whether you’re contacted by 

an organization’s employees, volunteers or 

professional fund-raisers, soliciting donations by 

phone, mail or in person.

 Be wary of appeals that tug at your heart 

strings, especially pleas involving patriotism 

and current events. Although the Department 

of Defense does not endorse any specific 

war related charity, you can visit their Web 

site at http://www.army.mil/operations/oif/

FAQ.html to find out about military relief 

societies that provide assistance to U.S. 

Servicemembers and their families.

 Ask for written information about the 

charity, including name, address and 

telephone number. A legitimate charity or 

fund-raiser will give you information about 

the charity’s mission, how your donation will 

be used and proof that your contribution is 

tax deductible. 

 Check out the charity’s financial 

information. For many organizations, this 

information can be found online at www.

guidestar.org or at GuideStar, 427 Scotland 

Street, Williamsburg, VA 23185; 757-229-

4631.

 Ask for identification. The Telemarketing 

Sales Rule requires for-profit fund-raisers to 

disclose the name of the charity requesting 
Facts for Consumers

the donation. Many states require paid fundraisers to identify themselves as such and to 

name the charity for which they’re soliciting. 

If the solicitor refuses to tell you, hang up 

and report it to law enforcement officials. 

 Call the charity. Find out if the organization 

is aware of the solicitation and has authorized 

the use of its name. If not, you may be 

dealing with a scam artist. 

 Check with local recipients. If giving to 

local organizations is important to you, make 

sure they will benefit from your generosity. 

If a charity tells you that your dollars will 

support a local organization, such as a fire 

department, police department or hospital, 

call the organization to verify the claim.

 Watch out for similar sounding names. 

Some phony charities use names that closely 

resemble those of respected, legitimate 

organizations. If you notice a small 

difference from the name of the charity you 

intend to deal with, call the organization you 

know to check it out.

 Know the difference between “tax exempt” 

and “tax deductible.” Tax exempt means 

the organization doesn’t have to pay taxes. 

Tax deductible means you can deduct 

your contribution on your federal income 

tax return. Even if an organization is tax 

exempt, your contribution may not be tax 

deductible. If a tax deduction is important to 

you, ask for a receipt showing the amount 

of your contribution and stating that it is tax 

deductible. 

Beware of organizations that use meaningless 

terms to suggest they are tax exempt charities. 

For example, the fact that an organization has a 

“tax I.D. number” doesn’t mean it is a charity; 

every nonprofit and for-profit organization must 

have a tax I.D. number. And an invoice that 

tells you to “keep this receipt for your records” 

doesn’t mean that your donation is tax deductible 

or that the organization is tax exempt. 

 Be skeptical if someone thanks you for a 

pledge you don’t remember making. If you 

have any doubts about whether you’ve made 

a pledge or previously contributed, check 

your records. Be on the alert for invoices 

claiming you’ve made a pledge. Some 

unscrupulous solicitors use this approach to 

get your money. 

 Ask how your donation will be distributed. 

How much will go to the program you want 

to support (as opposed to other programs of 

the nonprofit), and how much will cover the 

charity’s administrative and telemarketing 

costs? 

 Refuse high pressure appeals. Legitimate 

fund-raisers won’t push you to give on the 

spot.

 Be wary of charities offering to send a 

courier or overnight delivery service to 

collect your donation immediately.

 Consider the costs. When buying 

merchandise or tickets for special events, or 

when receiving “free” goods in exchange 

for giving, remember that these items cost 

money and generally are paid for out of 

your contribution. Although this can be an 

effective fund-raising tool, less money may 

be available for the charity. 

 Be wary of guaranteed sweepstakes winnings 

in exchange for a contribution. According to 

law, you never have to donate anything to be 

eligible to win. 

 Avoid cash gifts. Cash can be lost or stolen. 

For security and tax record purposes, it’s 

best to pay by check. 

Charity Check-Up

Many charities use your donations wisely. 

Others may spend much of your contribution on 

administrative expenses or more fund-raising 

efforts. Some may misrepresent their fund-raising 

intentions or solicit for phony causes. 
Facts for Consumers

Federal Trade Commission

Bureau of Consumer Protection

Office of Consumer and Business Education

1-877-FTC-HELP FOR THE CONSUMER

FEDERAL TRADE COMMISSION www.ftc.gov

May 2003

Before you open your checkbook, check out 

the charity you’re considering with these 

organizations:

BBB Wise Giving Alliance

4200 Wilson Boulevard, Suite 800

Arlington, VA 22203

(703) 276-0100

www.give.org

American Institute of Philanthropy

3450 Lake Shore Dr., Suite 2802 E

Chicago, IL 60657

(773) 529-2300 

www.charitywatch.org 

GuideStar

427 Scotland Street

Williamsburg, VA 23185

(757) 229-4631

www.guidestar.org

Your Local Charity Registration Office

Most states require charities to be registered 

or licensed by the state. Check with your state 

Attorney General’s office or Secretary of State. 

You can find a list of state charity regulators at 

the National Association of State Charity Officials 

Web site — www.nasconet.org.

Many smaller, newer or local charities may not 

be rated by the organizations listed here. Some 

fraternal organizations, such as police and fire 

groups may not be rated at all. If the charity 

seeking your donation is not listed or rated, follow 

the precautions listed under Charity Checklist 

to help you determine whether an organization 

deserves your donation dollars.

Where to Complain

If you believe an organization may not be 

operating for charitable purposes, is making 

misleading solicitations or is ignoring requests 

to be placed on a “do not call” list, contact 

your state Attorney General, your local 

consumer protection office or the Federal Trade 

Commission.

The FTC works for the consumer to prevent 

fraudulent, deceptive, and unfair business 

practices in the marketplace and to provide 

information to help consumers spot, stop, and 

avoid them. To file a complaint or to get free 

information on consumer issues, visit www.ftc.

gov or call toll-free, 1-877-FTC-HELP (1-877-

382-4357); TTY: 1-866-653-4261. The FTC 

enters Internet, telemarketing, identity theft, and 

other fraud-related complaints into Consumer 

Sentinel, a secure, online database available to 

hundreds of civil and criminal law enforcement 

agencies in the U.S. and abroad.