Use Caution In Donating To Charities That Don’t Disclose

It’s not your imagination; there have been more charity scams in the news recently. Better Business Bureau’s Wise Giving Alliance (WGA) and Better Business Bureau of Minnesota and North Dakota ® (BBB) urge consumers and businesses to use caution in any decisions to support charities that do not disclose requested information to the Wise Giving Alliance, calling lack of disclosure a possible “red flag” for potential donors. This advisory becomes particularly important as we approach Giving Tuesday, which takes place Tuesday, December 1, and has been designated as a global day dedicated to giving back.

“We know there are some worthy charities that don’t disclose requested information for whatever reason,” said Dana Badgerow, president and CEO of BBB of Minnesota and North Dakota. “However, it certainly makes sense for potential donors to ask even more questions of such charities, and to be quite leery if those questions aren’t answered to their satisfaction.”

BBB’s Wise Giving Alliance regularly sends nationally-soliciting charities requests to disclose details of their operations that address charity governance, results reporting, finances, fundraising, appeal accuracy and other issues. This is done in an effort to help donors make informed giving decisions. When a charity does not provide the requested information they are classified as nondisclosure. A BBB WGA nondisclosure report is a warning sign for donors to be cautious about donating their hard-earned dollars to charities that might be engaged in bad practices.

In May, the Federal Trade Commission and all 50 State Attorneys General filed charges against four cancer charities, one of the largest charity fraud cases in the nation’s history. In July, the New York State Attorney General announced a court action to shutter a children’s leukemia charity for “touting non-existent and defunct programs.” One common element for four of the charities in these cases is that they did not disclose any of the information requested by BBB WGA and the fifth disclosed but did not meet several BBB Standards for Charity Accountability.

Some points for donors to consider when evaluating a charity are:
• Ask for information about the charity, what it does, who it helps, and how.
• If called by a professional fundraiser, call the charity itself for information.
• Ask for specific information about the charity, such as name, address, and phone numbers.
• Contact the Minnesota Attorney General’s office, which regulates charitable organizations. In North Dakota, check with the Secretary of State’s office.
• Watch out for similar sounding names. Some phony charities use names that closely resemble those of respected, legitimate organizations.
• Do not send or give cash donations. Cash can be lost or stolen. For security and tax record purposes, it’s best to pay by credit card.

Charities that choose not to participate in BBB’s charity review process may miss out on donations charitable givers steer towards organizations that do provide requested information. Give.org has reports on national charities, based on not only finances, but also how well the charity is run, its fundraising ethics and whether it assesses the effectiveness of its programs.

The mission of Better Business Bureau is to be the leader in building marketplace trust by promoting, through self-regulation, the highest standards of business ethics and conduct, and to instill confidence in responsible businesses through programs of education and action that inform, assist and protect the general public. We are open 8 a.m. to 5 p.m. Monday through Friday. Contact BBB at bbb.org or 651-699-1111, toll-free at 1-800-646-6222.