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Charitable donations: give wisely

By telephone, in person, outside the grocery or department
store or through the mail, we all receive numerous appeals to give to a variety of organizations and causes. And for many, the holidays are a time to donate money to those less fortunate.

While it's important to contribute to charitable causes, the decision to give is a personal one.  But before you decide, you should take some precautions to make sure that the charity is legitimate. That's because the holidays in particular are a time when con artists are cooking up schemes designed to take advantage of your generosity and giving spirit. 

Telling the difference between a legitimate solicitation and a scam isn't always easy. However, some common-sense do's and don'ts will help you avoid a charity scam. For instance, often times you may be asked to donate to a local family in need that may have lost their possessions in a fire or natural disaster. In these cases, a trustee is required to open a trust account in order to solicit donations. If you decide to contribute, it's best to give by check, made payable to the trust fund and not an individual.

Sometimes, you may be asked to give to an organization whose name is very similar to other well-known organizations. Are these organizations the same or somehow related? Or is one totally unrelated to the cause of the other, but just trying to capitalize on another's organization's good name? And what if you've never heard of the organization that's soliciting you for a donation?

You also should know that charitable organizations often will contract with professional fundraisers to solicit on their behalf. If that's the case, then a portion of the contributions collected on behalf of the organization will pay the expenses of the fundraiser. And that will affect the percentage of the organization's funds that directly benefit the program or charity you are giving to.

Here, then, are some guidelines and suggestions to consider before deciding whether to donate to a charity:

  • Make sure you know who is asking for the money and how they plan to spend it. Ask questions, and don't contribute until you're satisfied with the answers.
  • Be wary of emotional appeals.
  • Ask the person seeking your donation whether he or she is a volunteer or paid solicitor.
  • Florida law gives you the right to receive a copy of the organization's financial report before giving. Ask for it.
  • Every organization has some administrative and fundraising costs. Most organizations can't function on volunteer help alone, and they must spend money to raise money. Before contributing, examine the percentage of total revenue that goes for administrative costs, such as salaries and fundraising efforts. Then compare that amount with the percentage of revenue that goes towards the organization's programs and services. Do the administrative costs seem too high? Does the amount going toward the organization's programs seem appropriate? Make sure you feel comfortable with the figures before deciding to give.
  • Not all organizations soliciting money in the name of philanthropy are true charities eligible to receive tax-deductible contributions. Ask for the group's federal tax-exempt number. If the group doesn't have one, you won't be able to legitimately claim your contribution as a tax deduction.
  • If the solicitation is for a law enforcement charity, ask the nearest law enforcement agency if they've ever heard of the group. If they haven't, chances are it's a scam.
  • Never give cash. Contribute by check that is payable only to the organization, not to an individual.
  • Never give your credit card, bank account or Social Security number to a telephone solicitor. Instead, ask to have information on making a donation mailed to you.

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