Tips for Protecting Yourself and Your Investment in Charities

1. Be an informed donor. Whether you receive a mail, telephone, or email solicitation, whether you learn about a charity from a friend or family member, or whether you seek out an organization on your own, get informed before giving. Learn about the organization and its operations, governance, and finances. Visit the organization's website or call to request information. Give only when you feel comfortable that your dollars will be going to support an organization you know and believe in.

2. Consult reports from charity “watchdog” organizations. The Better Business Bureau's Wise Giving Alliance (www.give.org) reports on nationally soliciting charitable organizations that are the subject of donor inquiries. These reports include an evaluation of the subject charity in relation to the 23 provisions of the voluntary CBBB Standards for Charitable Solicitations. Other organizations, such as American Institute for Philanthropy, make financial evaluations about charities. The state government office responsible for registering charities in your state may also be able to provide information about the charities you're interested in (for a list of state government charity offices see www.nasconet.org.) Use these resources in addition to your own criteria to determine whether you wish to invest in an organization.

3. Don't give your credit card number over the phone if you don't know the solicitor. If you are not familiar with the person or the organization requesting the gift, do not give your credit card number over the phone. If you are interested in the cause, ask for information in writing. A responsible charity will be happy to answer questions and will mail you more details. Ask for the following information:

• The name of the charity, address, and telephone number;
• The caller's name and company and whether he or she is a volunteer or paid professional fundraiser;
• What the charity's overall fundraising costs and administrative expenses are, and how much goes toward program expenses; and
• Written information on the operations, finances, and outcomes of the charity's programs.

4. Verify with the charity. Call the charity directly to be sure it is aware of the solicitation and has authorized the use of its name. 

5. Refuse high-pressure tactics. Responsible charities don't pressure you to make a decision on the spot or send a messenger to pick up your donation. Refuse to respond to callers who try to intimidate you or make you feel guilty if you don't give. These are not responsible charities. Say no and hang up. Report the problem to your state attorney general's office and file a complaint with your local Better Business Bureau.

6. Beware of sound-alike names. Some phony fundraisers use names that sound like respected, legitimate charities. 

7. Focus on results, not on fundraising ratios. The way charities raise money and carry out their programs varies widely, depending on the type of cause, the region the organization operates in, the age of the charity, the “popularity” of the cause, and many other factors. This means that there is no ideal fundraising percentage nor standard administrative cost that applies to all charities. In addition, accounting rules allow several methods of calculating fundraising percentages, and there is no single, best way for every situation. What's more important than financial calculations is the organization's track record in achieving results and fulfilling its mission effectively and efficiently. Following the suggestions above will help you rule out any fraudulent organizations, but determining which of the responsible charities you wish to contribute toward is a decision that only you can make for yourself based on your own knowledge and criteria. Only by learning more about the organization can you determine for yourself whether you believe the organization is doing a good job, and thus merits your support.

8. You have the right to say no. Give generously when you can, but if you're unsure or feel uncomfortable -- or if an organization simply falls outside your plan for giving—don't be afraid to say no. Or, ask for more information and take more time to think before making your decision.

Tips for Making the Most of Your Charitable Contributions