Charities are a way to give back to those in need, often times stories are told with unhappy endings and more heartbreaks than we can handle. The stories of heartbreak continue as people beg for assistance. Of course there are the tragi-charities asking for assistance as well. Smart Asset reports the fifty worst charities and how to pick out a scammed organization from a true non-profit.
The pop-up charity business is usually local, occasionally regional and rarely national. Mostly they are the products of individual scammers who smell an opportunity to cash in using the name of a victim who may or may not even be real. They count on local press coverage and a quick website. These ‘charities’ usually rake in a few thousand dollars and disappear.
Then there are the professional long term operations. They utilize direct mail or telemarketers to solicit millions of dollars in donations from unsuspecting individuals and businesses. Are you concerned you’ve already been scammed or just want to make sure you won’t be in the future? Here are some of the worst offenders:
- Kids Wish Network
- Cancer Fund of America
- Children’s Wish Foundation International
- American Breast Cancer Foundation
- Firefighters Charitable Foundation
- Breast Cancer Relief Foundation
- International Union of Police Associations, AFL-CIO
- National Veterans Service Fund
- American Association of State Troopers
- Children’s Cancer Fund of America
- Children’s Cancer Recovery Foundation
- Youth Development Fund
- Committee For Missing Children
- Association for Firefighters and Paramedics
- Project Cure (Bradenton, FL)
- National Caregiving Foundation
- Operation Lookout National Center for Missing Youth
- United States Deputy Sheriffs’ Association
- Vietnow National Headquarters
- Police Protective Fund
- National Cancer Coalition
- Woman to Woman Breast Cancer Foundation
- American Foundation For Disabled Children
- The Veterans Fund
- Heart Support of America
- Veterans Assistance Foundation
- Children’s Charity Fund
- Wishing Well Foundation USA
- Defeat Diabetes Foundation
- Disabled Police Officers of America Inc.
- National Police Defense Foundation
- American Association of the Deaf & Blind
- Reserve Police Officers Association
- Optimal Medical Foundation
- Disabled Police and Sheriffs Foundation
- Disabled Police Officers Counseling Center
- Children’s Leukemia Research Association
- United Breast Cancer Foundation
- Shiloh International Ministries
- Circle of Friends For American Veterans
- Find the Children
- Survivors and Victims Empowered
- Firefighters Assistance Fund
- Caring for Our Children Foundation
- National Narcotic Officers Associations Coalition
- American Foundation for Children With AIDS
- Our American Veterans
- Roger Wyburn- Mason & Jack M Blount Foundation for Eradication of Rheumatoid Disease
- Firefighters Burn Fund
- Hope Cancer Fund
This list was put together by the Tampa Bay Times and The Center for Investigative Reporting based on federal tax filings for the last 10 years. Charities are broken up into five main categories: children, cancer, police/law enforcement, veterans, fire and other. These fifty charities account for more than $1.35 Billion in donations. Of that, $970 million went not to victims, but to the people who collected the money.
The percentages spent by these “charities” on direct aid to victims range from 0% to a high of only 11.10%. Most of the organizations spent between 0.10% and 8.6% of what they collected in direct cash aid. This is a far cry from what well meaning contributors intended for their contributions.
It’s important to remember that these numbers are just for the 50 worst offenders. Charity watchdog organizations say no more than 35 percent of donations should go to fundraising costs. Only two of the fifty listed met this criteria. However, they still spent only 0% and 1.10% on direct cash aid.
The worst of the worst paid more than 90% of what they collected to solicitors. Thirty-three of the fifty paid between 70% and 89% to solicitors. Overhead costs consumed large chunks of what was remaining. Only the very small amount left, may get to the people who actually need it!
Do the Hustle
Con artists refer to what they do as a hustle. A hustle is like the 70′s disco dance. It’s made up of series of regular steps timed to the beat of the music that can be improvised as needed. Charity hustles work the same way. They improvise and evolve to stay one step ahead of unsuspecting donors.
One very common hustle is the name game. For example, a very well known and respected group is the Make a Wish Foundation. This organization spends the vast majority of it’s donations on children. Kids Wish Network, however, spends only 3 cents of every dollar collected on kids. But their website and solicitations are designed to look and sound like Make a Wish. In fact, they count on the confusion to gather contributions.
The IRS is Not the Answer
When a solicitor for one of these groups calls a prospective donor the pitch will include the truthful statement that they are a nonprofit organization. Nonprofit however does not mean they are a charity. It only means they do not seek to make a profit on their activities. A profit according to Investopedia.com is revenue that exceeds expenses. The IRS has pretty broad rules for being a nonprofit organization. A charity is only one type of nonprofit.
Trade groups like those that represent the fast food or soft drink producers operate as nonprofits. Political organizations including both the Democratic and Republican parties are nonprofits. Lots of different special interest groups are nonprofits, including some private businesses that pay their executives quite well.
The Hustle Part II – The Tell
The tell is a poker term. It means an opposing player does something to indicate he or she is bluffing. There are all sorts of questions that you could go through to determine if the solicitor on the other end of the phone is from an honest to goodness charity or not. They all require time and patience to learn and implement. The most sure-fire solution is to ask for the name of the organization and a means to contact them so you can make your donation at another time.
When you do this, depending on the experience of the solicitor, you will either hear a lot of fast talking or angry response or you will be provided the information. Legitimate charities with nothing to hide will tell you how you can make your contribution later and hustlers will get annoyed.
Check Them Out
Before you make a contribution to any organization it is wise to know who they are and what they do. No legitimate fundraising effort is so urgent that if you do not make your contribution right at that moment someone will suffer. A day or two or even a week is not going to make a difference. So take the time to research.
There are a number of websites where you can check the status of a nonprofit. It only takes minutes but allows you to feel better about your donation. GuideStar.org requires that you sign up for a free account in order to receive very detailed reports on organizations. CharityNavigator.org provides a limited amount of information without a free membership. More detailed information is available to members. The Better Business Bureau has been around for decades. They provide free information that is easily digestible at a glance.
The bottom line for charitable giving is to trust your instinct. If a solicitation sounds too smooth or vague, be suspicious. Think of charitable giving in the same terms as international diplomacy, Trust but Verify.
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Source: Smart Asset
Photo Credit: Jamie Pflug