Consumer Guide: Charitable Giving

Consumer Guide
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Few things are more fulfilling that helping others in need. However, before you reach into your wallet to help a charity, you’ll want to do your homework first. Like any financial decision, it is important to make donations carefully. To help you do just that, here are some tips from the Massachusetts Attorney General’s Office and the Rhode Island Department of Business Regulation.

Do….

Know your charity

Don’t consider donating to any charity, no matter what its name is, just because it happened to reach you at home by the phone or by mail. You should select the charities you donate to. Don’t let them select you. Verify before you donate:

  • The name, address and telephone number of the charity;
  • A specific description of how and where the charitable funds will be used;
  • Whether your donation is tax deductible as a charitable contribution; and
  • The name, address and telephone number of the professional fundraiser, if any, the charity uses.

Give Wisely:Check a Charity »

Find out where your money will go

  • Ask how much of the money goes to the charity; a paid fundraiser may be involved.
  • Beware of statements such as “all proceeds go to charity;” the “proceeds” may not be very much after expenses are deducted.
  • Ask for financial statements which tell you how much of your charity dollar goes to fundraising or administrative and general expenses, and how much is left for the program you want to support.

Keep records

  • Keep receipts and canceled checks, in case you have a complaint later. They also come in handy when you file your income tax returns.

Know the difference between “tax exempt “and “tax deductible”

  • Tax exempt means the organization doesn’t have to pay taxes.
  • Tax deductible means you can deduct your contribution on your federal tax return.

Verify the information given to you by the charity

  • To find out more about a charity, contact the Rhode Island Department of Business Regulation at 401-462-9527. In Massachusetts, contact the Attorney General’s Office 617-963-2315.
  • Call your local police department
    • Some require organizations to register before soliciting; they may be able to tell you if they have received complaints about the solicitation.
  • Call the beneficiaries of the charitable funds – local schools, shelters, workshops, etc.
    • Find out whether they are aware of the solicitation and have authorized the use of their name.

Don’t…

Be fooled by a name.

Some phony charities, including for-profit companies, have sympathetic sounding names, or names that closely resemble those of respected, legitimate charities.

Feel pressured.

Take time to decide. The need is always there; make sure the organization will be there, too. Don’t be pressured by a hard luck tale. A legitimate charity will tell you how it’s using your money to make a difference.

Pay by cash.

Pay by check, and make it out to the charity (use its full name; don’t use initials), not the fundraiser. Never give your credit card or debit card number to a fundraiser over the telephone. If the fundraiser comes to your door, always ask to see identification. Better yet, mail your check directly to the charity.

Be lured by “freebies.”

Household products and tickets to shows can be legitimate fundraising tools, but they do add extra costs. If you receive unordered items in the mail, don’t feel obligated to make a donation. It’s against the law to demand payment for unordered merchandise.

Be afraid to hang up the phone or close the door.

If a person calls you on the phone or comes to your door soliciting on behalf of a charity, you can ask them to send you a letter or leave you something in writing and ask them to leave. You can hang up the phone. You don’t need to be rude, but you do need to protect yourself.

 

Important Resources

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