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
Have you ever given to a charity and regretted it?
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