Texans make generous donations to charities each year by volunteering time or contributing money. Savvy donors make a bigger difference in the lives of Texans if they ask the right questions and do a little homework before contributing to a charitable cause.
A legitimate charity should be pleased to answer your questions about their organization and its programs. Some questions you may want to ask of those soliciting for charity:
Who are you?
If you are unfamiliar with the charity, get its full name, address, and telephone number. Ask whether the organization is listed as a tax-exempt public charity by the IRS and if your donation will be tax deductible.
Will you send me information in writing?
Ask for information in writing from the charity, including information about the charity’s programs and finances, such as an annual report, financial statement, or an IRS Form 990 information return.
How will you use my donation?
Find out the planned use of your money. For example, ask how much will go towards administrative or fundraising expenses and how much to charitable programs and services.
Watch for Red Flags
Here are some common “red flags’ that could be warning signs that you are dealing with a fraudulent or irresponsible charitable solicitation:
High pressure solicitations.
A legitimate charity will be glad to give you the time needed to ask questions and do your research. If a fundraiser represents that it is soliciting for a charity, you can check with that charity to confirm that they authorized the solicitation and will benefit from your donation.
Charities that look or sound like well-known organizations
Be careful of websites or other solicitations that imitate well-known and well-respected entities. Be sure you have the name correct and that you are giving to the organization you intend to benefit.
New organizations forming in the wake of a natural disaster or tragedy
Charities are sometimes formed overnight to address calamities. Some might not be well-intentioned and may be taking advantage of the moment. Others may lack the experience and staff needed to respond effectively. Even during a crisis, take time to research a charity before giving.
Most honest charities do not try to entice you to give by telling you that you have won a prize when you haven't even entered a contest.
Requests for certain personal information
Avoidance of the U.S. mail
Dishonest individuals usually try to avoid doing any business through the U.S. mail to avoid federal prosecution under postal statutes. Instead, they will insist on using a private courier service or picking up your check themselves.
Do your Research
Resources you may want to consult when researching a charity include
- The BBB Wise Giving Alliance: The Alliance reports on nationally soliciting charitable organizations that are the subject of donor inquiries. These reports include an evaluation of the subject charity in relation to voluntary BBB charity standards.
- CharityWatch: Founded more than 20 years ago as the American Institute of Philanthropy, CharityWatch is an independent charity watchdog.
- Guidestar: A national database of U.S. charitable organizations which gathers and distributes data on more than 1.8 million IRS-recognized nonprofits.
- Charity Navigator: An independent charity evaluation service.
Internet and Social Media Solicitations
New technologies offer Texans new ways to make charitable contributions. Learn more about giving tips specific to internet and social media solicitations (PDF).