Americans are giving more cash and labor to good causes, a trend President Clinton is encouraging with his recent conference on voluntarism.
But contributing comes with a billion-dollar hurdle. Some of the money and time are not, to put it charitably, being put to good use.Whether it's a boardroom lavishing money on the boss or a boiler room taking the money and running, a small percentage of operations can make it hard for people to give with confidence.
Enter the charity checkers.
Ever since some folks during World War I pocketed money raised for our boys overseas, these watchdogs have been waving red flags over suspect philanthropy estimated by federal officials to consume $1.5 billion a year.
They say many of the guidelines for safe giving apply to volunteering, too. Chief among them: Demand detailed written descriptions of the charity's mission and spending, resist overly emotional "emergency" appeals and don't commit on the spot to unfamiliar groups.
Sara Melendez, president of the Independent Sector, representing almost 800 charities, agrees.
"If I've never heard of them, I would never send them a check until they send me some information," she said. "I would want to see how they are spending the money."
Still, she said the vast majority of the more than $120 billion given to charity last year and of the 20 billion hours of volunteer work went to deserving groups.
The 80-year-old National Charities Information Bureau and the Better Business Bureau's Philanthropic Advisory Service rate hundreds of charities on their compliance with standards. They are recommended by the Federal Trade Commission and many non-profits.
Anyone can call those watchdogs and a few others or contact them by mail or the Internet to check a charity before supporting it.
Their lists are geared to large, popular or trouble-prone groups and, while broad, are not exhaustive. The monitors note when a charity refuses to give in-for-ma-tion.
"The wise donor is going to look into an organization before deciding to devote efforts to it," said Bennett Weiner, head of the business bureau's philanthropic service in Arlington, Va.
In many cases, people's time may be an even larger commitment than money, he said, and "that's all the more reason that they should be comfortable with the choice they have made."
Melendez, who is most familiar with the National Charities Information Bureau in New York, says it is a useful resource.
But she said charity checkers may miss some nuances, such as a legitimate boost in fund-raising expenses in one year to cover a capital investment.
When a charity falls short of standards, people should ask tough questions of the group but not necessarily write it off, she said.
Charity watchers, along with some state attorneys general, warned early of the problems with police and firefighter money-raising recently highlighted by federal authorities.
Another area of concern is the many fund-raising groups that may spring up in response to catastrophes like war, famine or floods.
Donors should keep in mind that relief organizations budget for disasters and do not need donations this minute, said Dan Langan of the New York charities bureau.
Melendez said groups such as the Red Cross do have an urgent need because of the upper Midwest floods, but no one should twist arms. "I personally will never respond to high pressure no matter where it comes from."
Familiarity alone is not sufficient reassurance. The United Way of America reeled in the early 1990s from revelations about the fraudulent spending of its boss of that time. Other famous groups have had far less dramatic problems of accountability.
For many people, the bottom line is the percentage of income actually spent on programs as opposed to fund-raising or administration. Charity checkers say it should be a minimum of 50 percent or 60 percent.
Most monitored charities do better than that. But for some, sending letters that advocate a position and ask for donations may be all that they do.
Donors can also contact officials in the majority of states that require charities to be registered. Registration is not proof of legitimacy but one test.
Also, all non-church charities with income over $25,000 must file a publicly available 990 form with the Internal Revenue Service. It shows financial breakdowns and top salaries.
Guidestar, a service of Philanthropic Research of Williamsburg, Va., produces revenue and spending charts on more than 40,000 nonprofit organizations based on their 990 forms.
If all of that makes anyone want to give up on giving, the charity checkers are quick to appeal for that not to happen.
And they say doing a bit of investigating before giving support is something of a charitable act itself.
"The unscrupulous operators out there are counting on the fact that you won't bother to do any checking," Weiner said. "That's what allows them to continue."
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Additional Information
Get facts before donating
Tips on supporting charities:
- Request an annual report or detailed written information on the exact name of the group, its purpose, how much of each dollar is spent on programs, how it pursues goals.
- Be wary of sound-alike names chosen by groups that hope donors will confuse them with venerable charities. Names with "cancer," "heart" and "children" are especially pop-u-lar.
- People are under no obligation to send money in response to gifts such as greeting cards or personalized mailing labels.
- Verify that charities with local names actually conduct local activities.
- Groups that offer to send a legitimate courier service to pick up a check or cash may be trying to circumvent mail-fraud laws.
- Verify whether contributions are tax deductible if that is important to you. Donations to some "tax exempt" organizations are not. Claims of having a tax ID number are meaningless.
- Give by check or money order instead of cash and don't give a credit card number to unfamiliar groups by phone.
- Most states require charities to register. Registration can be checked at offices of the attorney general or secretary of state.
- Check a charity's IRS form 990, which groups are obliged to mail for a nominal fee and must make available in their offices for free.
- Contact charity watchdogs by phone or Internet:
National Charities Information Bureau, 1-212-929-6300, or http://www.give.org
Better Business Bureau's Philanthropic Advisory Service, 1-703-276-0100, or http://www.bbb.org
American Institute of Philanthropy: 1-314-454-3040. No Web address.
GuideStar: 1-800-421-8656 or http://www.guidestar.org