First of two columns
Now that the holiday season is here, you get telephone calls (almost every evening, usually while you're at dinner) from strangers asking for charitable donations. How do you avoid being duped by questionable or unscrupulous fund-raisers?
Despite the efforts of law enforcement officials and watchdog groups, charity scams continue to proliferate and profit.
This year, Americans will give an estimated $125 billion to the nation's 600,000 plus charities. The billions come from many sources, including corporations and foundations, but almost 90 percent comes from individuals such as you. This is big money. Most charitable enterprises are honest, yet the enormous amounts involved in charitable giving at times lead to abuses of the public's trust.
Some groups take your hard-earned money and run. At least it appears that way. Doris Day's Animal League, named for the movie star and now 3 years old, has raised more than $7 million, according to the Wall Street Journal. That's great, except it is reported that 90 percent of the $7 million was spent on more mail asking for more money.
According to Internal Revenue Service filings, of $1.3 million used by the Doris Day group for public advocacy, 96 percent went to the direct-mailer. Of another $1.3 million, this time for public education, the direct-mailer got 73 percent. Then, the same company was paid 75 percent of the League's management expenses.
"People think they're giving to a good cause -- and they may well be as far as what they're told by mail or by phone. But in reality the charity is spending much, if not most, of what it raises for list rentals, mailing costs and telemarketing operations," says Kenneth Albrecht, president of the National Charities Information Bureau (NCIB), an independent watchdog agency that monitors and evaluates the program activities and performance of national charities.
Another news story reports that United Citizens Against Drugs (UCAD), a California-based group, touted names like Nancy Reagan, William Bennett and Dan Quayle to raise some $818,000 for drug abuse education based largely on the distribution of coloring book and posters to grade-school children. Of the money raised by the group $28,000, or about 3.6 percent, went for the printing of coloring books, a hot line and miscellaneous services. But more than $440,000 went for the fund-raisers' fees, and $296,000 went for promotional literature and advertising. Moreover, UCAD used the famous names without authorization.
Stories like these make headlines because they are so flagrant. But even the best charities need to maintain their credibility and accountability -- keeping proper financial records, avoiding conflicts of interest and the like.
In an NCIB survey by the Roper Organization, nearly 8 in 10 contributors said they feel it is becoming more and more difficult to know what is and isn't a legitimate charitable organization.
The basic rule is: don't give to an organization you don't know something about.
Consult your local Better Business Bureau. Check your local library. An informative source is NCIB's "Wise Giving Guide," which covers some 400 charitable organizations. Included are the NCIB's widely accepted standards for charities. Under these standards, the charity must apply at least 60 percent of what it spends for program activities, as opposed to fund-raising and management. Single copies of the guide are free from the National Charities Information Bureau, Dept. DB, 19 Union Square West, New York, N.Y. 10003, (212) 929-6300. Printed guides and guidelines are available also from the better business bureaus.
NEXT: Does your charity measure up?