It's been a few weeks since I've had the opportunity to answer questions from you, the readers. So when I finally checked my "Ask Eli" inbox there was a doozy waiting for me about charitable giving. In these tough economic times, charities need our help more than ever. And in these tough economic times, more than ever, we want to know our dollars are well spent. I've taken the unusual step of devoting my entire column to a single reader's question, because I think this is so important. Please know that I always love hearing from all of you. You educate and enlighten me as to what's happening out there "on the ground," and I appreciate it.
Q: I am on Social Security, a fixed income. A while back I donated to a few charities I knew of to support their causes, and I would like to give more. However, it has gotten out of hand. What has happened is I get loads of letters from charities (some I have never heard of). How do I make it stop? Some charities include a check of change (coins) to entice one to give. My family is upset with me. They say my name and address gets in a list and here I am. Any suggestions to stop so many charities asking in the mail?
~Betty, Miami, Fla.
A: Betty, I'm afraid your family is right. Here's what I think happened. The charities you initially gave to were not legitimate. They probably used copycat names that sounded very similar to well-known charities you would like to support. For example, many crooks use the same name as well-known charities, except they substitute the word "foundation" for "society" or some other sleight of hand like that. When somebody responds to their direct mailings with a check, they get that money and also make more money by selling your name to other crooks who, in turn, send you solicitations from other phony charities. It's called a "sucker list" and you are on it.
The con artists operating these "charities" send you a check for a few cents hoping you will deposit it. If you do, when the check is returned to their bank, they can request it and get your bank account number, sometimes called a "transit number." Using that number they can then drain your account. Don't deposit these scam checks. Legitimate charities don't send you checks. They hope you will send checks to them.
Here's what you need to do in the short term: Turn over these scam charity solicitations to your local postal inspector. The Postal Inspection Service is the crime-fighting arm of the U.S. Postal Service. You can find your local postal inspector by clicking here: https://postalinspectors.uspis.gov/forms/MailFraudComplaint.aspx.
In the long term, if you want to do the good deed of giving to charities, I always say "Be the hunter, not the hunted." In other words, do not respond to solicitations or phone calls asking you for money. Instead, decide what causes you want to support and reach out to the well-known charities in these fields. Then take one more step and check out these charities to see how efficient they are. The BBB Wise Giving Alliance is the best-known charity watchdog, and now bestows a seal of approval upon charities that meet certain strict standards. You want to know that the majority of your donation will go to the actual cause you want to support rather than to overhead or executive salaries. Here are some key steps to take before giving to any charity:
KNOW THE SIGNS:
1. Be alert to names that sound slightly "off." Same goes for logos.
2. If a group refuses to send you written information, that's a bad sign.
3. If the person soliciting your contribution can't answer basic questions about the organization, be wary.
4. If you receive a thank-you note or an invoice for a contribution you never pledged to make, that's a classic tactic. Don't fall for it.
5. Solicitors who pressure you to give on the spot are not to be trusted. The need will still exist after you've done your homework.
6. Charities that offer to send a courier or private shipper to pick up your contribution may be trying to avoid mail fraud laws.
QUESTIONS TO ASK:
1. What's the full name, address and phone number of the charity?
2. Do you work directly for the charity, or are you a paid fundraiser? If paid, what percentage does your company keep?
3. What will my contribution be used for?
4. Can you send me literature about the charity and a financial statement so I can decide whether to give?
5. Is my contribution tax deductible?
6. Are you a 501(c)(3) organization?
DO YOUR HOMEWORK:
1. Before you give, make sure the charity is registered with your state, if required. Some tiny charities and church groups do not have to register.
2. Also check with one of the private watchdog groups that monitors charities. The BBB Wise Giving Alliance's Web site is www.give.org. You can find the American Institute of Philanthropy at www.charitywatch.org.
3. The state or a watchdog group should be able to tell you if the group is a bona fide 501(c)(3). If not you can check with the IRS by going to www.irs.gov and looking for publication number 78. Or call the IRS customer service number, (877) 829-5500.
4. Make your payment by check or credit card, so there's an independent record of your gift. Never use cash.