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How to avoid charity scams this holiday season
Give freely but carefully by researching nonprofits
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Online resources

ProPublica

Charity Navigator

North Georgia Community Foundation

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How to get the most bang for your charitable buck

• Do your research. Find out how much of your donation goes to programming versus overhead expenses

• Find ways to give other than cutting a check, such as volunteering and doing advocacy work

• Find your niche and support a cause you can identify with

• Game plan charitable giving just like you would a family budget for the month

• Volunteer before donating to better understand a charity’s mission

The holidays are a time for giving. We can all agree on that.

But not all charities are created equal. And for all the do-gooding of social service agencies and volunteers, there are many nonprofits running scams.

For example, Georgia joined the Federal Trade Commission and other state law enforcement officials this summer in shutting down four cancer charities that  allegedly bilked donors out of more than $187 million.

Rather than helping stricken children, as the missions stated, the charities were little more than a slush fund benefitting the charity’s leadership, families and friends. According to a federal complaint, the charities paid lucrative salaries and spent donations on cars, trips, cruises, college tuition, gym memberships, sporting events and concert tickets for family.

Meanwhile, the Wounded Warrior Project, one of the nation’s most respected charities, has been criticized by veterans for spending too much on promotion and not enough on actual programs.

Meanwhile, investigative news reports have raised concerns about high executive pay and the selling of donor information to third parties.

The Armed Forces Foundation also came under fire this year after an ESPN report revealed donations were spent on personal expenses for top executives.

Even the American Red Cross has been criticized in recent investigative stories by National Public Radio about mismanagement of funds following an earthquake in Haiti in 2010 and Hurricane Sandy in 2012.

Closer to home, the Committee for Missing Children in Lawrenceville paid nearly 90 percent of the $27 million it had raised to its fundraising personnel, according to a Tampa Bay Times report.

So how can you tell if a charity is legit? Fortunately, there are several online resources available that provide financial details and other important information about the operations of charities across the nation.

So a little research can go a long way.

“It’s really something I think is hard for an individual to do. It’s hard to identify any tell-tale signs that an organization is not reputable,” Tony Mallon, a professor in the Institute for Nonprofit Organizations at the University of Georgia, said. “Just do a little homework.”

What to look for

Ann Nixon, executive director of Habitat for Humanity of Hall County, said it’s understandable that people have an urge to give this time of year.

“Reflecting on personal good fortune through Thanksgiving and Christmas does prompt many to consider how they can impact the lives of those less fortunate,” she said. “While there are many people who contribute to nonprofit causes year round, many people are particularly moved at this time of year. And they want to do so wisely, wanting their contributions to have greatest effect on those they wish to help.”

Nixon echoed the need for donors to do their research “to be sure that your hard-earned monies become the catalyst for change that you seek.”

She advises donors to ask questions such as:

• Is this a registered 501(c)3 charity?

• Does it provide a tax-deductible receipt?

• Does it have audited financials we can see?

• How much of our donation will go into overhead (salaries, heat and lights, office rent) and how much will go into the program?

• Specifically, how will our donation be spent?

“You want to find charities with a proven track record, transparency and a high ratio of investment in programming versus overhead,” Nixon said.

At Habitat for Humanity of Hall County, donations go directly to building homes for local, hard-working, low-income families. “Every single penny,” Nixon said.

Kay Blackstock, executive director at the Georgia Mountain Food Bank, said a good place to start when considering what organizations to donate to is to identify causes and issues of personal importance.

“Everyone has something they are naturally drawn to support,” she said.

Blackstock recommends reviewing charity audits to find out how much of each dollar goes to programming versus overhead.

The North Georgia Community Foundation is “always a good resource,” she added. “They’ll know most of the nonprofits, if not all of them, and have a little history on them.”

Financial advisers can also be a good resource, Blackstock said.

Mallon said just like budgeting for family expenses, it’s important to game-plan for charitable giving.

“I’m not discouraging from giving a dollar to the March of Dimes at the cash register ... but it’s not like there aren’t opportunities to give in a planned way,” he added.

One of the big problems nonprofits face is balancing overhead and operational expenses with program funding. Mallon said that it could raise alarm if a charity is spending less than 5 percent or more than 25 percent of its donations on administrative costs. But this advice does come with a caveat.

“You need to understand what their administrative costs are in the context of what they do,” Mallon said. For example, the United Way assumes lots of administrative costs in disbursing money to other nonprofits.

more than money

While it’s important to research charities and donate money, there are many other ways to give.

“While we think of writing a check or dropping money in a bucket as the only way to support charitable organizations, there are many more ways than that at some organizations,” Nixon said.

At Habitat, volunteers can swing hammers, donate goods to the ReStore, a retail shop where proceeds help cover expenses or make meals for volunteers.

The Georgia Mountain Food Bank has had 3,000 volunteers this year alone packing boxes of food for needy families across Northeast Georgia, Blackstock said.

The Salvation Army in Gainesville needs volunteers this holiday season to pack and distribute Christmas toys for kids, as well as ring the ubiquitous kettle bells outside local retail shops. Lt. Arnaldo Pena, who leads the local Salvation Army, said the toy program alone will benefit 500 local families and nearly 2,000 children. Volunteers help reduce overhead costs for the organization.

For many local nonprofits, the surge in donations during the Christmas season is offset in the New Year when charitable giving declines.

So Nixon wants to remind donors that needs exist year-round.

“Our bellies are full when we know many are going hungry,” she said. “We snooze in recliners in preparation for all-night shopping while we know many lack a decent roof over their heads. We hit the malls for bargains, blissfully unaware that a staggering 2 out of 3 Hall County schoolchildren live in financial insecurity.”

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