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Facts

for Consumers

Charitable

Donations:

Give or

Take

Produced in cooperation with the

National Association of Attorneys General

April 1997

You may have contributed a portion ofthe $143 billion raised for charities in

1995. Unfortunately, an estimated $1.43

billion of that amount may have been

misused or ended up in the pockets of

fraudulent solicitors. With more than half a

million federally recognized charities soliciting for charitable contributions, it pays to be

cautious when making a donation. Asking

questions about the nature and activities of

the organization is the only way you can be

sure the money you contribute will support

worthwhile causes.

Paid Fund-Raisers

Some charities find it more efficient to pay

professional fund-raisers to handle large

scale mailings, telephone drives, and other

solicitations rather than their own paid staff

or volunteers. Professional fund-raisers are

in business to make money and can legally

keep a portion of the money they collect. If

youre solicited for a donation, ask if the

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

will keep. If youre not comfortable with

the amount, you may want to consider other

options for donating.

Charity Checklist

Whether charitable organizations use their

employees, volunteers, or professional fundraisers to solicit donations by phone, mail,

or in person, consider the following precautions to ensure that your donation dollars

benefit the people and organizations you

want to help.

● Ask for written information, including

the charitys name, address, and telephone number. A legitimate charity or

fund- raiser will give you materials

outlining the charitys mission, how

your donation will be used, and proof

that your contribution is tax deductible.

● Ask for identification. Many states

require paid fund-raisers to identify

themselves as such and to name the

charity for which theyre soliciting. If

the solicitor refuses, hang up and report

it to local 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 fraudulent solicitor.

● Watch out for similar sounding names.

Some phony charities use names that

closely resemble those of respected,

legitimate organizations.

● Know the difference between tax

exempt and tax deductible. Tax

exempt means the organization doesnt

have to pay taxes. Tax deductible means

you can deduct your contribution on

your federal income tax return. Even

though an organization is tax exempt,

your contribution may not be tax deductible. If deductibility is important to

you, ask for a receipt showing the

amount of your contribution and stating

that it is tax deductible.

 FEDERAL TRADE COMMISSION TOLL-FREE 1-877-FTC-HELP

 WWW.FTC.GOV FOR THE CONSUMER
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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

doesnt mean it is a charity: all nonprofit

and for profit organizations must have tax

I.D. numbers. And an invoice that tells you

to keep this receipt for your records

doesnt mean your donation is tax deductible or the organization is tax exempt.

● Be skeptical if someone thanks you for a

pledge you dont remember making. If

you have any doubt whether youve

made a pledge or previously contributed, check your records. Be on the

alert for invoices claiming youve made

a pledge when you know you havent.

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, and how much

will cover the charitys administrative

costs? If a professional fund-raiser is

used, ask how much it will keep.

● Refuse high pressure appeals. Legitimate fund-raisers wont push you to

give on the spot.

● Be wary of charities offering to send a

courier 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 fundraising tool, less money may be available for the charity.

● Be wary of guaranteed sweepstakes

winnings in exchange for a contribution.

You never have to donate anything to

be eligible to win.

● Avoid cash gifts that can be lost or

stolen. For security and tax record

purposes, its best to pay by check. Use

the official full name of the charity 

not initials  on your check. Avoid

solicitors who want to send a courier or

use an overnight delivery service to pick

up your donation.

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.

Before you open your checkbook, check

out the charity youre considering with

these organizations:

Philanthropic Advisory Service

Council of Better Business Bureaus

4200 Wilson Boulevard, Suite 800

Arlington, VA 22203-1838

(703) 276-0100

www.bbb.org

National Charities Information Bureau

19 Union Square West, 6th Floor

New York, NY 10003-3395

(212) 929-6300

www.give.org

American Institute of Philanthropy

4905 Del Ray Avenue

Suite 300

Bethesda, MD 20814

(301) 913-5200

Your local charity registration office

Most states require charities to be registered

or licensed by the state. Check with your

state Attorney Generals office or Secretary

of State.

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.
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For Complaints and More

Information

If you believe an organization may not be

operating for charitable purposes or is

making misleading solicitations, contact

your state Attorney General or your local

consumer protection office.

You also may file a complaint with the

Federal Trade Commission by contacting

the Consumer Response Center by phone:

Toll-free 1-877-FTC-HELP (382-4357);

TDD: 202-326-2502, by mail: Consumer

Response Center, Federal Trade Commission, Washington, DC 20580, or by e-mail:

use the complaint form at www.ftc.gov.

Although the FTC cannot intervene in

individual disputes, the information you

provide may indicate a pattern of possible

law violations requiring action by the

Commission.

The FTC publishes a series of free brochures on a variety of consumer issues.

You can access the FTC at www.ftc.gov.

You also can request a copy of Best Sellers, a complete list of FTC publications, at:

Consumer Response Center

Federal Trade Commission

Washington, DC 20580

Toll-free: 1-877-FTC-HELP (382-4357)

TDD: 202-326-2502