Guides keep donors away from scams

12/6/2008

It's the season of giving, and the time of year when many choose to make a donation - to a local food pantry or soup kitchen, a community center, or other nonprofit group.

But how do you know if your contribution is really helping the needy?

To help donors "give wisely," the Better Business Bureau has a guide to local charitable giving.

It's available online at toledo.app.bbb.org/charitygiving or in print form, and assesses about 200 organizations in northwest Ohio and southeast Michigan.

The bureau used 20 standards for accountability - from evaluating the governance and oversight of boards of directors, measuring a group's effectiveness, looking at finances, and evaluating how much of a group's funds go toward its mission.

If a group would not disclose the information, the bureau consulted public documents in an attempt to get it.

"Know exactly who you're giving to," urged Greg Heldt, director of solicitations review for the bureau, who put the guide together.

Be wary of high-pressure sales pitches, groups with names that sound similar to well-known, established charities, and anyone asking for cash, Mr. Heldt said.

The United Way of Greater Toledo helped the BBB with the guide.

"United Way understands the need for donors to trust the organizations they support. We partnered with the Better Business Bureau to help nonprofits understand the value of accountability," Bill Kitson, president and chief executive officer of United Way, said in a written statement.

"As nonprofit organizations, we are given a public trust. The Better Business Bureau helps us validate that trust."

For those looking to do more research before they write a check, there also are a number of Web sites that evaluate charities. Among them:

•charitynavigator.org uses financial statements to rate a group's efficiency as well as listing revenue, assets, expenses, and the salary of the executive director.

•guidestar.org has tax returns from nonprofit organizations.

Additionally, in Ohio and Michigan, organizations that solicit contributions must register with the attorney general's office in their respective states.

"Always ask questions if you are contemplating making a donation to charity," suggested Monica Moloney, acting chief of the charitable law section of the Ohio Attorney General's Office. The office has about 120 open cases investigating questionable practices by nonprofit groups, she said.

John Sellek, spokesman for the Michigan Attorney General's Office, advised donors to ask how much of their gift will be used for a charitable purpose, what will happen to the contribution, and if it is tax deductible.

The Toledo Community Foundation also does research on many area charities, said Bridget Holt, the group's donor relations officer.

"We have to make sure our charitable giving is going to the right kind of organizations," she said.

She advised donors to stick with well-known, well-established groups, such as United Way, if they are unsure about where to direct their contribution, or to consult online resources.

She added that it is normal for nonprofit organizations, even primarily volunteer groups, to have overhead expenses - though those costs shouldn't be excessive.

"One thing that's really important for the general public to understand is that just because a group is a nonprofit doesn't mean they won't have business expenses," Ms. Holt said.

The groups still must pay utility costs, salaries, insurance, and other expenses.

"Not-for-profit is a designation by the IRS. It doesn't mean someone won't have any expenses," she said.

Contact Kate Giammarise at:

kgiammarise@theblade.com

or 419-724-6133.