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Consumer Updates

Charitable giving: Is your money going where you think it’s going?

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Better Business Bureau
December 6, 2011 | 1,746 views | Post a comment

Ask questions and do your research before giving to a charity

AUSTIN, Texas -- Though philanthropists donate to charities all year long, the holiday season remains the busiest time for charitable donations. Whether donating your time, treasure or talent, Better Business Bureau reminds consumers to give wisely.

“It’s far too easy for anybody to set up a charity, get tax-exempt status with the IRS, do very little of anything charitable and get away with it,” said Daniel Borochoff, American Institute of Philanthropy president, on the ABC News program “Primetime.”

BBB Wise Giving Alliance Standards for Charity Accountability were developed to assist donors in making sound giving decisions and to foster public confidence in charitable organizations. The standards seek to encourage fair and honest solicitation practices, to promote ethical conduct by charitable organizations and to advance support of philanthropy.

Before giving your time or treasure this holiday season, BBB recommends the following:

· Research the organization. Check with your BBB at to get reports on how national charities measure up to BBB Standards for Charity Accountability. Confirm the organization is registered with the IRS as a 501(c)(3) and verify the programs and distribution of money is where you want it to be. According to BBB’s Standards for Charity Accountability:

- At least 65 percent of total expenses should be spent on program activities

- No more than 35 percent of related contributions can be spent on fundraising

For local charities, ask for an annual report or a 990 IRS form to see a breakdown of where the money is allocated.

· Be wary of imitations. Don't be fooled by names that look impressive or that closely resemble the name of a well-known organization.

· Avoid giving personal information over the phone. Since nonprofits are not required to use the “Do Not Call” list, you could receive a phone call asking for a donation. Avoid giving your personal information over the phone and go “off the call” to confirm the legitimacy of the organization before deciding to donate.

Avoid giving to charities that:

· Use high pressure solicitations: A legitimate charity will be glad to give you the time needed to fully research its program.

· Offer prizes: Most honest charities do not try to entice you to give by telling you that you have won a prize.

· Steer you away from mailing a donation. Dishonest individuals try and avoid doing anything through the U.S. mail to avoid federal prosecution under postal statutes.

To check the reliability of a company and find trustworthy businesses, visit
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