Released May 7, 2009
LOGAN, Utah -- In the days after Hurricane Katrina, thousands of people contributed millions of dollars to agencies collecting donations for the victims. As the devastation along the Gulf Coast was played out through the media, everyone wanted to do something to help. Many well-known national organizations quickly set up means to collect donations. Unfortunately, many Americans found themselves prey to con artists who took advantage of the emotions of the moment to solicit funds for fraudulent charities that do not exist. It is estimated that 60 percent of the donation Web sites were scams. (http://www.squidoo.com/charityfraud)
Utahns are well known for their compassion and generous offerings. Unfortunately, Utahns are also well known for their high bankruptcy rate, high debt-to-income ratio and for their susceptibility to scammers. In fact, Utah ranks 8th in the nation in generosity according to the Catalogue for Philanthropy Generosity Index as reported by the Utah Foundation Research Report (2004). This ranking compares each state’s income levels to its donation levels. Utah ranks 31st in income, or “having,” and is 2nd in donations, or “giving.” The difference between these rankings creates a “generosity” index.
The following tips from the Federal Trade Commission will help generous consumers avoid fraud when making charitable contributions.
• Be wary of appeals that tug at your heartstrings, especially pleas involving patriotism and current events.
• Ask for the name of the charity if the telemarketer does not provide it promptly.
• Ask what percentage of the donation is used to support the causes described in the solicitation and what percentage is used for administrative costs. This information can be obtained by going to the Better Business Bureau’s Wise Giving Alliance at http://www.give.org.
• Call the charity to find out if its personnel are aware of the solicitation and have authorized the use of its name.
• If the telemarketer claims the charity will support local organizations, call the local groups to verify.
• Discuss the donation with a trusted family member or friend before committing any funds.
• Don’t provide any credit card or bank account information until you have reviewed all information from the charity and made the decision to donate.
• Ask for a receipt showing the amount of the contribution and stating that it is tax deductible.
• Understand that contributions made to a tax-exempt organization are not necessarily tax deductible.
• Avoid cash gifts. They can be lost or stolen. For security and tax record purposes, it is best to pay by a check made payable to the beneficiary, not the solicitor.
• Be wary of groups selling merchandise claiming that all profits will benefit victims. Some may be legitimate while others may have no association with the organization they claim to represent and may be using a charity’s name without approval.
• Remember that the need for contributions will be ongoing, and in the months ahead, you will have many opportunities to provide support. Take time to choose the recipients of your charitable giving to make sure your dollars reach helping hands.
• For more information, contact the Federal Trade Commission at http://www.ftc.gov or the Utah Division of Consumer Protection, http://www.commerce.utah.gov/dcp/ or at 801.530.6601.
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http://extension.usu.edu/htm/news/articleID=4661
Contacts: Ann House, 801-468-2846
Julene Reese, 435-797-0810, julener@ext.usu.edu
