Share this article

print logo

DON'T BECOME A CHUMP FOR UNWORTHY CHARITIES

DECEMBER IS the month for giving: Many charities make their biggest pitches of the year as taxpayers try to beat the Dec. 31 deadline and get tax deductions for contributions.

New Yorkers give $11 billion a year to charities, and a large portion of that is donated in December.

As an avalanche of solicitations arrives with each day's mail, it can be hard to decide which charity to support.

The obvious consideration for most givers is whether the program run by the charity is something they want to support.

But with all the worthy causes out there, donors still may be left with dozens of choices to make.

There are other standards that can be applied to narrow down the number of choices.

For instance, how much of the money you donate goes to the charity's programs, and how much goes to administrative and fund-raising expenses?

Will the charity give you a clear and informative financial statement that tells you how money is being spent?

Are its solicitations accurate and do they fairly represent the programs and goals of the organization?

All of these questions are legitimate considerations for anyone who is willing to give their money to others.

Donors "want to know about the charities they support, to have some assurance that the impulse to give has not impeded their judgment," says Kenneth L. Albrecht, president of the National Charities Information Bureau, in a message to subscribers.

Whenever you are using your money -- whether buying an appliance, investing in a stock or setting up a checking account -- it is prudent to understand exactly what you are investing in or buying.

The same rule should apply to charitable donations, because not all charities are created equal. Some are more efficient than others. Some may not be charities at all, but profit-making companies using the guise of a good cause in order to sell a product.

You can get basic financial information on most non-religious charities that solicit in New York State by contacting the Office of Charities Registration (Department of State, Office of Charities Administration, 162 Washington Ave., Albany, N.Y. 12231).

Charities must give the state an annual financial statement that lists expenses, revenues, a balance sheet and other information.

You can obtain free copies of one-page reports on 12,000 charities that file with the state. The reports list revenues and expenses for three years, along with instructions that help you interpret the report and do some basic financial calculations that will show how much money is spent on programs and how much is spent to raise new contributions.

The state's reports do not pass any judgment on whether a charity is worthwhile, but they do give enough information for contributors to make their own evaluations, says a spokesman for the Office of Charities Information.

Donors who are concerned about a charity's efficiency should not make snap judgments based on a few figures, warns Larry Blumenthal, a special projects editor for The NonProfit Times, a Hopewell, N.J.-based trade publication for executives of non-profit organizations.

"There is no easy way of looking at a chart and saying it is doing its business well or not," he says.

Different types of charities have different expenses and fund-raising methods, for instance.

Non-profit hospitals may have very high administrative costs compared to charities that may need only small office staffs, Blumenthal says.

Some groups operate at low cost because they do not have to solicit money from the public, but instead take donated goods from corporations and transfer them to other charities that use them, he says.

However, it is still wise to look at the bottom-line expenses to see how much money is going into the charity's programs.

If one charity that raises money for cancer research spends 70 percent of its revenues on programs, while another spends only 25 percent, you should ask the charity that spends the smaller amount on programs to justify the difference.

The Council of Better Business Bureaus believes charities should spend at least 50 percent of their revenues on programs. The National Charities Information Bureau thinks that 60 percent of a charity's annual expenses should be related to programs.

Both organizations publish lists of charities that meet their guidelines, and those that do not.

The guidelines mandate that charities openly provide financial information, maintain independent boards, that their activities are consistent with their stated purposes for existence and that their solicitations are truthful.

Contributors can use the guides to find that the Christian Children's Fund -- which provides money for needy children overseas -- meets the guidelines of both organizations.

However, Accuracy in Media does not meet several standards set by the National Charities Information Bureau's standards, while the Walker Cancer Research Institute does not meet many of the Better Business Bureau's guidelines.

For a contribution of $25, you can get three issues of the "Wise Giving Guide" from the National Charities Information Bureau Inc., 19 Union Square W., sixth floor, New York, N.Y. 10003-3395. The guide lists dozens of charities and tells whether they meet the organization's standards.

The Better Business Bureau's list, "Give But Give Wisely," can be obtained by sending $2 and a note asking for the list to: Better Business Bureau Inc., 346 Delaware Ave., Buffalo, N.Y., 14202.

There are no comments - be the first to comment