The Checkout

Give and Learn

The holidays are a peak time of year for charitable giving, whether it's buying tickets to one of the many charity dinners scheduled this time of year or dropping a dollar in the Salvation Army bucket at the mall.

Would-be donors, however, have become more cautious about giving after hearing about one too many stories about charitable scams and plain old mismanagement.

As my colleague Kathleen Day reported on Sunday, some folks are turning away from big charities such as the United Way and are choosing to give to smaller causes they vet themselves.

In fact, the number of people giving to the United Way dropped 22.7 percent between 2000 and 2004, as the United Way of the National Capital Area was rocked by an embezzlement scandal, which led to problems at a few other chapters being exposed.

Vetting charities is a time consuming undertaking. But the reality is whether you're giving to a small, independently-run homeless shelter in your neighborhood or to an established name such as the Red Cross, it pays to do your homework. That means looking over 990s--the income tax returns filed by non-profits--and paying attention to key details such as the ratio of overhead costs to programming expenses. As a rule of thumb, the Better Business Bureau says at least 65 percent of expenses should be spent on programming.

Be wary of groups such as the Police Protective Fund, which rely heavily on telemarketing calls. In August, the Montgomery County Office of Consumer Protection warned consumers about this out-of-state police charity, which it said spends 91 percent of its donations on salaries and overhead.

The PPF also has some storied connections. According to an investigation by the Orange County Register published earlier this year, the group is allegedly one of many affiliated with associates ofMitch Gold, a now legendary scammer who is serving an eight-year prison sentence for fraud. The paper's investigation found that since 2000 Gold's former clients, employees and subcontractors have raised nearly $83 million in the name of charities such as the American Deputy Sheriffs' Association, the Association for Disabled Firefighters and the Junior Police Academy. Charity executives and fundraisers kept $76.7 million, the Register reported.

The good news is if you're thinking about making a donation, there are plenty of resources you can turn to for information.

To review a group's 990 tax filings, go to http://www.guidestar.org.

You can also find information on charities at charitynavigator.com, or from these organizations:

* BBB Wise Giving Alliance, 4200 Wilson Boulevard, Suite 800, Arlington, VA 22203, (703) 276-0100 or www.give.org

* The American Institute of Philanthropy, 3450 Lake Shore Drive, Suite 2802 E, Chicago, IL 60657, (773) 529-2300 or www.charitywatch.org.

And you can check on groups or complain about them to the appropriate government agencies:

* The Maryland Secretary of State: (800) 825-4510 or online at www.sos.state.md.us/Charity/Charityhome.htm.

* The Virginia Department of Agriculture and Consumer Services' Office of Consumer Affairs: toll-free in Virginia at (800) 552-9963.

* The D.C. Attorney General: (202) 727-3400

Here are more tips on giving

Have you ever given to a charity and regretted it?

By Annys Shin |  November 20, 2006; 7:00 AM ET Consumer News
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If you would like to send care packages to soldiers overseas or to help their familes stateside, there are many ways to do so. Here are two links that provide information about how to help.

http://www.fisherhouse.org/

http://www.dailykos.com/story/2006/11/18/203710/39

The first link describes Fisher House, which provides aid to wounded soldiers and their families.

The second link goes to a blog; one of the commenters there has collected information about 10 organizations seeking help for deployed troops. There's a brief description of each organization at this link, as well as links to each one. On the individual sites, you'll find information about what to send and how to send it.

Posted by: THS | November 20, 2006 8:55 AM

65%? That's ridiculous. If you're spending that on salaries, maybe its time for a reduction in staff. There better be a very good reason 35 cents on the dollar are being spent figuring out how to give money away. Otherwise be honest and call it a business.

If I donate a dollar and only 65 cents makes it to the intended recipient, I'm better off making a more direct donation (delivering a couple cases of food to a shelter, handing a guy $1 on the street).

Posted by: Anonymous | November 20, 2006 10:28 AM

65% doesn't mean there are many people on the payroll. It means the few who are there are stealing from the supposed recipients.

Posted by: Steve | November 20, 2006 10:36 AM

I am always concerned about organization such as the United Way that prey mercilessly on low-income employees, blow most of the donations on overhead, and then give my money to organizations whose purpose I don't support.

I'd rather give to my local animal shelter, legal aid office, or soup kitchen. Even better are tangible gifts that will go directly to work -- a bag of dog food, a turkey for the holidays, or a few hours of my time.

Posted by: anondonor | November 20, 2006 11:16 AM

I am always concerned about organization such as the United Way that prey mercilessly on low-income employees, blow most of the donations on overhead, and then give my money to organizations whose purpose I don't support.

I'd rather give to my local animal shelter, legal aid office, or soup kitchen. Even better are tangible gifts that will go directly to work -- a bag of dog food, a turkey for the holidays, or a few hours of my time.

Posted by: anondonor | November 20, 2006 11:33 AM

When it comes to charities I am a softie, but after the United Way scandal I became much more frugal with my gift giving. I try to limit it to organizations that I know and have worked with in the past (the American Cancer Society, the Salvation Army etc.)And I never give to charities that call me on the phone, most of them I have never heard of and it really irks me that they assume you can give $20-$30. And when you say no they lower the rate to $10-$15. Shady people.

Posted by: Melissa | November 20, 2006 11:39 AM

As a non-profit employee, I ask that you look at the other side--who is processing your donation? Who is answering the phone when you call regarding the organization's mission? Who works 40 hours a week to make sure the money you donate goes towards the cause you believe in? Please don't begrudge the salaries (a large part of the "overhead" you all have griped about) offered to the regular employees who want to have a meaningful career that is not defined merely by a paycheck. By all means, investigate your charity of choice and how they allocate their funds. But please remember that unrestricted donations keep the organization running. I know no one wants to donate to pay an electric bill, or to buy office supplies, but without your generous dollars, the infrastructure to provide support to so many worthy causes would simply not be there.

Posted by: 95 from DC | November 20, 2006 3:18 PM

I don't think most nonprofits realize how easily or permanently people are turned off when they feel a charity hasn't been upfront with them. Studies like the one below show people don't like being pushed, they don't like when nonprofits act like big business and they've got long memories. But I wonder how many organizations really know what their donors are thinking.

http://www.publicagenda.org/research/research_reports_details.cfm?list=94

Posted by: Scott | November 21, 2006 12:18 PM

If PPF is anything like the organization that cold-called me, I'm amazed that they ever got any donations. The man purporting to represent the charity for law enforcement was calling from what sounded like a boiler room--you could hear dozens of other people talking in the background--and wasn't even paying attention to what he was saying as he kept interrupting himself to speak to someone at his call site. I told him it sounded like a scam and the only law enforcement I donated to was my local PBA and I hung up.

Posted by: ebrke | November 21, 2006 1:28 PM

To all the skeptics - and its ok to be skeptical - all I ask is that you do your homework. Don't just rely on stories in the newspaper (which remember, are in the business of selling news and don't always get it all correct!). Call the charity, ask what they spend on overhead and ask what that entails. Overhead isn't a bad thing - you have to pay staff, have a builidng, a place to sit, paper to write on and computers to work with! And even though United Way had its troubles, don't forget that they still fund millions for local programs, most of whom you never hear about because they're not the big name charities. So many small nonprofits do critical work. Please, just do your homework and then decide. Its too easy to get caught up in in rumors, scandals and "I don't give because my friend told me...". Too many lives are at stake - and those lives are helped by your local nonprofit community. Many of whom are funded by the United Way. One LOCAL mistake shouldn't forever punish them or the community.

Posted by: John | November 21, 2006 3:45 PM

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