COLLEGE STATION — As the holiday season approaches, the number of solicitations people receive from charitable organizations will increase, noted Dr. Joyce Cavanagh, a family economics expert with the Texas Agricultural Extension Service.
“It is estimated that charitable organizations receive 40 percent of their contributions in the last six-eight weeks of the year. Eighty cents of every dollar given to a charitable organization is from an individual donor,” she said.
While most people are happy to support worthwhile causes, many like to know their money is being used as intended. How can money be given wisely?
“Savvy consumers know how to ask the right questions and do a little homework before making a donation,” explained Cavanagh.
She recommended obtaining answers to the following questions before consumers make a donation:
Who wants your money? Ask for the full name, address and telephone number of the charity. Be cautious of “sound-alike” names. Some phony charities use names that closely resemble legitimate charities. Ask whether the organization is listed as a tax exempt public charity with the IRS and whether your donation will be tax deductible.
According to Cavanagh, “Just because an organization is tax exempt does not necessarily mean contributions will be tax deductible.” Request written information about the charity and a copy of its last annual report be sent to you before you give. Legitimate charities will be happy to send you material. “Refusal to supply this information should be considered a red flag to potential problems,” she warned.
How will your donation be used? A dramatic heart-wrenching description of general need may get your attention, but you should know more before you give. Find out the substance of the appeal and how your money will be used before you give.
What percentage of your donation would go toward true charitable purposes? Ask for written information that will show you a comparison of how much money the organization spends on administrative and fund-raising fees and expenses vs. how much it spends directly on the intended recipients or projects of the charity. The American Institute of Philanthropy recommends that at least 60 percent of income should go to program services and less than 40 percent on raising funds.
Cavanagh suggested keeping these tips in mind when giving:
Do not give your credit card number or your bank account number out over the phone in response to a phone solicitation.
Do not respond to letters that say you have pledged money unless you are sure that you did.
Never give cash. Write a check in the name of the charity, not to an individual. If giving property, ask for a receipt. Be cautious of organizations that offer to send a courier or messenger to your home to pick up your donation.
Consult a lawyer before making a significant gift, whether making such a gift outright, by will or by trust.
Many people target their giving to organizations that solicit through mail or telephone contact. Remember also, that there are organizations in everyone’s community that need help.
“Many times we forget about organizations in our own backyard that are making a significant difference in our community,” Cavanagh said. “Consider giving your money or your time locally. Not only does the organization benefit, but you see first hand what a difference you can make.”
Several organizations monitor charities and provide consumers with information on giving wisely. They include the Better Business Bureau’s Philanthropic Advisory Service (703) 267 0100 or <www.bbb.com>, the National Charities Information Bureau (212) 929-6300 or <www.give.org>, and the American Institute of Philanthropy (314) 454-3040. For local charities, contact your local Better Business Bureau or Chamber of Commerce.
If a consumer comes in contact with an organization and would like to make a complaint or report suspicious behavior, contact the Office of the Texas Attorney General’s Consumer Protection Division at (800) 337-3928.
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