Be A Smart Philanthropist
Even in hard times, Americans make giving back a high priority. About 95% of American households give to charities, according to surveys by the National Philanthropic Trust, a nonprofit that tracks charitable donations and activities. Smart donors favor charities that actually benefit needy people, and not the execs and administrators. Here's how to tell them apart...
How To Find the Best Charities
If you have a phone or a mailbox, you probably get solicitations from various charities regularly. But how can you tell if a charity is legit? How can you find out if they're funneling donations to the people they claim to be helping, or if the cash is mostly spent on fundraising, salaries and perks?
The average annual household contribution to charity is around $3,000, says the NPT. For sure, that average includes large donations as well as spare change tossed into the Salvation Army’s red pot. But Americans definitely feel the urge to give back to the less fortunate.
But where there’s money, there are scammers looking for undeserved gains. Even charities that seem legit on the surface don’t necessarily exist to help the downtrodden; some are just money-laundering schemes for their owners. CNN did a number on “the worst charity in America” back in May, 2016.
The National Vietnam Veterans Foundation collected more than $29 million in donations from 2010 to 2015, according to required IRS filings. The foundation’s site claims it exists solely for the purpose of "aiding, supporting and benefiting America's veterans and their families."
But CNN found that less than 2% of all donations received by NVVF in 2015 actually did any good for any veterans. The rest went for things like “travel” ($133,000), “awards” ($21,000), “other expenses” ($70,000) and even $8,000 for “parking.” The CEO and founder of NVVF, J. Thomas Burch, pulled a $65,000 salary in addition to his parking and other expenses.
The best part: Mr. Burch is a veteran, and he works as an attorney for the Veterans Administration! The VA told CNN there’s nothing improper about an employee also running a charitable organization, but after hearing CNN’s findings the Inspector General has taken an intererest in Mr. Burch, who drives a Rolls Royce to and from his government job.
When I get a phone call that starts out like this: "Hi, my name is Mike, and I'm a paid caller on behalf of (some charity)," I hang up immediately. You can bet that any organization using a paid caller to solicit funds is giving a big chunk of your donation to a telemarketing firm. If the caller doesn't say, I recommend that you ask if they are a volunteer or a paid caller.
Other organizations spend millions on direct mail campaigns to raise funds, and end up giving only a tiny fraction of those funds to people in need. A mailer from the United States Deputy Sheriff's Association caught my attention recently. This group claims to be "Serving the needs of county law enforcement nationwide," but only $150,000 of the $3.3 million they raised in 2014 was used for that purpose. Would you like to know how I found that information? Read on!
Check Before You Write That Check
Before giving your hard-earned money to a cause, make sure the money will be spent as you intend. Look up any charitable organization in Charity Navigator’s database of IRS filings. If you're looking for a charity in a specific niche, browse by categories such as Animals, Art & Culture, Education, Environment, Human Rights, or Religion.
You’ll find out how much a charity spends on fundraising, executive salaries, and other overhead. You’ll also find smart tips on how to give in-kind donations (hint: don’t send cocktail dresses to earthquake victims).
Charity Navigator also has a Fake Charities page, which lists several dozen bogus charities. You might think that "Disabled Veterans of America" or "Fresh Start Opportunities" sound legitimate enough. But these and others on the list are actually soliciting funds in violation of federal tax law. (The scammer who ran the fake DVA was sentenced to up to 10 years in prison.) Click on any of the fake charities listed on this page, and in addition to details on the organization, you'll find a list of similar charities that ARE legit.
Don’t let the flim-flammers kill your kindness. Give from your heart. But also use your head. Your thoughts on this topic are welcome. Post your comment or question below...
This article was posted by Bob Rankin on 27 Sep 2016
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Article information: AskBobRankin -- Be A Smart Philanthropist (Posted: 27 Sep 2016)
Copyright © 2005 - Bob Rankin - All Rights Reserved