Protect Yourself From “Charity”: Know When and How to Donate
Donating time or money to a charitable organization often brings both personal satisfaction to the donating individual and much needed resources to the receiving organization and the community it serves. For many years I have experienced this symbiotically rewarding relationship through donations of both time and money to the Boy Scouts of America. I’ve had the pleasure of watching young boys learn life skills that will transfer from boyhood scout outings to adult professional qualifications. The “sacrifice” required of such an experience is often not a sacrifice at all—I receive much more than I give.
Most organizations that hold themselves out as well-intentioned, service-providing, and charity-promoting are exactly that. Unfortunately, the same cannot be said of all “charities.” Whenever donations of money are expected, opportunities for fraud and concealment abound. In perhaps one of the most egregious examples of abusive trust, the Federal Trade Commission (FTC) recently filed a civil lawsuit against four “charities” who accepted more than $187 million to help women and children pay for cancer treatments. All four charities were run by either James Reynolds Sr., his ex-wife, or his son. The companies each solicited donations through telemarketing and web sites. The charities were well-staffed, and well-oiled money making machines. Over 95 percent of the donations went to the charity organizers and their friends. Less than 5 percent of the money actually went to gifts and financial assistance to patients.
When considering a donation to a charity, it’s important to do your research to be sure your investment will make its way to the cause you intend. The FTC offers this list of precautions to make sure your donation benefits the people and organizations you want to help.
- Ask for detailed information about the charity, including name, address, and telephone number.
- Get the exact name of the organization and do some research. Searching the name of the organization online — especially with the word “complaint(s)” or “scam”— is one way to learn about its reputation.
- Call the charity. Find out if the organization is aware of the solicitation and has authorized the use of its name. The organization’s development staff should be able to help you.
- Find out if the charity or fundraiser must be registered in your state by contacting the National Association of State Charity Officials.
- Check if the charity is trustworthy by contacting theBetter Business Bureau’s (BBB) Wise Giving Alliance, Charity Navigator, Charity Watch, or GuideStar.
- Ask if the caller is a paid fundraiser. If so, ask:
- The name of the charity they represent
- The percentage of your donation that will go to the charity
- How much will go to the actual cause to which you’re donating
- How much will go to the fundraiser
- Keep a record of your donations.
- Make an annual donation plan. That way, you can decide which causes to support and which reputable charities should receive your donations.
- Visit this Internal Revenue Service (IRS) webpage to find out which organizations are eligible to receive tax deductible contributions.
- 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.
- Never send cash donations. For security and tax purposes, it’s best to pay by check — made payable to the charity—or by credit card.
- Never wire money to someone claiming to be a charity. Scammers often request donations to be wired because wiring money is like sending cash: once you send it, you can’t get it back.
- Do not provide your credit or check card number, bank account number or any personal information until you’ve thoroughly researched the charity.
- Be wary of charities that spring up too suddenly in response to current events and natural disasters. Even if they are legitimate, they probably don’t have the infrastructure to get the donations to the affected area or people.
- If a donation request comes from a group claiming to help your local community (for example, local police or firefighters), ask the local agency if they have heard of the group and are getting financial support.
- What about texting? If you text to donate, the charge will show up on your mobile phone bill. If you’ve asked your mobile phone provider to block premium text messages—texts that cost extra—then you won’t be able to donate this way.
As with all we do, by paying attention to the rules designed to keep us safe, we can minimize the risk of being taken advantage of and becoming a victim to those who would prey upon our own good intentions and good will.
Though the purpose of this post is to provide education to donors and not to solicit money from donors, I’d be missing a tremendous opportunity if I failed to mention the Clark County Volunteer Lawyers Program (CCVLP). The program pairs low-income individuals in need of legal counsel with lawyers wanting to volunteer their time for the benefit of our community. Most CCVLP clients are on some kind of assistance or working at low paying jobs and are overwhelmed by the legal issues they’re facing. They’re often unable to navigate the legal world around them while struggling to pay the rent, pay medical bills, clothe their children, or even put food on the table. Though CCVLP receives grants from the Legal Foundation of Washington and the Clark County Department of Community Services, it is always in need of funding. If you would like to make a donation to this important charity, contact CCVLP Executive Director Susan Arney or Program Coordinator Ashley Bellisle at 360-823-0423.
Non-profit and charitable organizations often fill the void existing between government services and private free-enterprise. When a charity does so with sincerely good intentions, the charity, the donor and the ultimate recipient receive much-needed benefits. When a charity does so out of the greedy desires of its pocketbook, only the “charity”—the criminal—is benefited. Don’t become its victim.