November 23, 2010

DAVID B. OFFER: Watchdogs have taken a bite out of charity scam

David B. Offer

Maine Attorney General Janet Mills has simple advice for people who are bombarded with unwanted requests for charitable donations.

"Throw it out," she said. "Reject them. That's why God invented the recycle bin"

That's the advice I gave my mother in Seattle, who receives as many as a dozen requests for money in the mail nearly every day.

Most of the requests go into the garbage, but the mail deluge continues, probably because she occasionally sends a small check to a charity whose appeal seems compelling.

According to Charity Navigator, (charitynavigator.com) an independent organization that tracks and rates charities, that is guaranteed to bring more requests.

"The quickest and most sure-fire way to wind up on mailing lists is to make lots of small charitable donations," Charity Navigator says. "Small donations, such as $25, barely cover the costs the charity incurred in soliciting the gift. To recoup those costs, many charities will simply sell the donor's name to another charity doing similar work."

The appeals that flood Mom's mailbox seem compelling. They ask for donations to help starving children, care for abused animals, cure disease, help the homeless and support veterans -- all worthy causes.

It doesn't take much investigation to determine that most are scams that enrich the fundraisers more than they help worthy causes.

In addition to helping identify bad solicitors, Charity Navigator provides detailed information about how charities operate, how much charity executives are paid, and what is spent on the programs the charity says it runs.

It also lists highly rated charities and includes information on charities that operate with the least efficiency and charities that do the best job with the money they receive.

If you enter the name of a charity you are considering, Charity Navigator will give you its rating and list other charities with the same goal, including some that may do a better job. It also helps you determine which of several charities with similar names might be honest.

An article in U.S. News noted "not all charities with similar names are scams, but neither are all created equal." The Children's Defense Fund, which advocates for children, has a four-star rating from Charity Navigator. The similar sounding Children's Charity Fund has a no-stars, largely because spends more than 87 percent of its revenue not for needy children but fundraising.

The Better Business Bureau also provides information on charities through its wise giving program. The BBB collects data on charities, including how they govern their organization, how they spend their money, the truthfulness of their representations and willingness to provide information to the public.

The BBB says an efficient charity should spend at least 65 percent of its total revenue on programs, not fundraising. Many highly regarded charities spend as much as 85 percent of their money on programs.

One so-called charity that asked my mother for money could not do business in Maine.

The American Federation of Police and Concerned Citizens has a zero rating from Charity Navigator. Its letter implied the organization has a relationship with the Seattle Police Department. It does not.

Police organizations are not allowed to solicit in Maine, Mills said.

Scambusters.com says if you get a request for money from anyone suggesting he or she is from the police or fire department, call that department to check him out.

"No one with a badge" can solicit in Maine, Mills said, because it that can be intimidating to people.

Anyone with a computer or a telephone knows that not all the scams come in the U.S. mail.

Mills and Linda Conti, head of the consumer protection division in the Attorney General's Office, said Internet schemes are a major concern. Both cited infamous scams, many originating in Nigeria, that seek to trick people into revealing their bank accounts.

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