Donating to Public Safety Fund-Raisers
As a businessperson, you may want to contribute to law enforcement or
public safety groups in your community or buy advertising in
publications that seem to be sponsored by nonprofit organizations.
While you give back to the community that supports your business, be
sure to apply the same savvy you use to make your business decisions
when you consider your response to a fund-raising appeal.
Support Through Advertising
You may be solicited to buy advertising in publications that look like
they're sponsored by nonprofit groups, such as police or firefighter
associations or child abuse prevention programs. The publication might
be a journal, magazine, calendar, yearbook, or even a souvenir program
for distribution at a circus, variety show or dance. But while the
words "police" or "firefighter" may appear in the title, the
publication may not have an official connection with a genuine public
safety organization. It may not even be distributed locally.
Protect Yourself
If you're considering supporting a local charity by buying ad space
from a nonprofit group, ask:
- How many copies of the publication
will be printed?
- How often will it be published?
- Is there a charge for the
publication?
- Who is the intended audience: police
and fire departments, libraries, schools, paid subscribers?
- Where will the publication be
distributed: locally, regionally, nationally?
- Have arrangements been made for
dissemination?
- When will it be published?
- Can I see a copy of a previous
edition?
- How much money has the publisher
given to the charity in the past?
- What percentage of the proceeds goes
to the charity's programs, rather than administration?
If you decide to purchase ad space, ask
to review the draft before publication. In addition, ask to receive a
free copy when it's published. Don't expect a large portion of your
payment to support a charitable program; the costs associated with
soliciting ads and printing a publication often take most of your
payment.
Phony Invoices
Some fraudsters operate on the assumption that purchasing policies in
many businesses are informal, at best. As a result, they may send
invoices and expect you to pay them without a second thought. Be alert
for invoices claiming you've purchased ad space, or unsolicited C.O.D.
(Cash on Delivery) packages. It's illegal to mail a bill, invoice or
"statement of account due" that's actually a solicitation for a
donation. If the notice is a solicitation, a disclaimer, required by
the U.S. Postal Service, should be visible. It states:
THIS IS NOT A BILL. THIS IS A SOLICITATION. YOU ARE UNDER NO
OBLIGATION TO PAY THE AMOUNT STATED ABOVE UNLESS YOU ACCEPT THIS
OFFER.
If you receive a solicitation that looks like an invoice but lacks
this disclaimer, contact your Postmaster or local Postal Inspector.
Public Safety Solicitations
Most police and fire departments are funded by your tax dollars.
However, they may ask you to contribute to their professional
associations or labor unions at local, state or national levels. These
groups typically use paid fund-raisers to solicit donations. Be
cautious; simply having the words "police" or "firefighter" in an
organization's name doesn't necessarily mean that local police and
firefighters belong to the group. Call your local police or fire
department to verify any fund-raiser's claims.
There's no reason to be suspicious of all fund-raising by
police and firefighter groups. Asking questions is the best way to
make sure your contribution supports activities that are important to
you. If you're interested in making a donation, ask: how the group
will use your money and what percentage will go to the local
organization. Ask how your contribution will be allocated. Some
fund-raisers may be soliciting funds for organizations that
redistribute money to other organizations. If that's the case, a
smaller portion of your donation may go to the organization in need.
That's because your contribution may pay twice as much in solicitation
and administration costs when it goes through one group to get to
another.
One major tip-off to a rip-off is a suggestion that you'll receive
special treatment for donating - for example, that you won't be
stopped for speeding if you display a police organization's decal on
your car window.
And keep in mind that donations to some police or firefighter groups
may not be tax deductible. Many types of organizations are "tax
exempt," including fraternal organizations, labor unions and trade
associations, but that doesn't mean that donations to them are tax
deductible.
Special Events
Sometimes, police or firefighter groups hire professional fund-raisers
that produce traveling circuses or variety shows as special
fund-raising events. The fund-raiser usually sells tickets for the
show on the phone or in person. In many cases, the solicitor says that
if you're not interested in attending the show, your tickets can be
given to handicapped or underprivileged children. If that's the claim,
ask how many children will benefit and how they're selected; how many
tickets have to be sold and how they will be distributed; and whether
transportation for the children is included. In some communities, the
number of children "eligible" to receive free tickets is limited and
transportation may not be provided.
In addition, depending on the terms of the agreement between the
public safety group and the promoter, the group may receive only a
small portion of the total money raised once the promoter recoups the
costs associated with producing the event and its fees.
If you decide to purchase tickets, write a check payable to the
nonprofit organization, not the person collecting the money or the
company running the event. If you get unsolicited tickets in the mail,
you have no obligation to pay for them or return them to the promoter.
Vending Machine and Donation Canisters
Businesses often are asked to donate retail space to owners of vending
machines or donation canisters, with a portion of the proceeds going
to charity. Iron out the terms of the agreement before you donate any
space. Three arrangements are common:
- Employees or volunteers of a
nonprofit or charitable organization own and service the collection
device. Net profits go to the organization.
- A private vending machine operator
owns and services the device. The operator contracts with a
nonprofit organization to use its name and remits a portion of the
funds collected to the organization. Review a copy of the contract
or letter of agreement between the machine operator and the
nonprofit before you allow a device to be placed at your business.
- A commercial operator has a contract
to use an organization's name, but doesn't remit any proceeds from
the device. Instead, the beneficiary organization receives a
one-time or periodic "royalty," and sometimes has the opportunity to
place a service message on the device. In this situation, the
operators may not be required to register as commercial fund-
raisers if the device displays a prominent statement like "all
proceeds go to the owner of this device," and the owner is
identified as someone other than the charity. It depends on state
law. Some states require commercial operators to register with the
state Attorney General or Secretary of State and prominently display
the percentage of monies collected that go to the nonprofit group on
the device.
Donation Do's
Take the following precautions to help ensure that your donation
dollars benefit the organizations and people you want to help.
- Request written information.
Ask for the name of the organization, its mission, plans for
achieving its objectives, and how much of every dollar collected is
used for charitable purposes.
- Call the beneficiary organization.
Find out whether they're aware of the solicitation and have
authorized the use of their name. If the answer is no, you may be
dealing with a scam artist.
- Find out how your donation will
be distributed. How much will go to the program you want to
support, and how much will cover the charity's administrative
fund-raising costs?
- Refuse high pressure appeals.
Legitimate fund-raisers don't push you to give on the spot. They
take the time to explain the purpose of their solicitation and the
goals of the beneficiaries.
- Research claims of local support.
If a charity tells you that your donation will support a local
organization, call the organization to verify the claim.
- Consider the costs. When you
buy merchandise or tickets for special events, or when you receive
"free" goods in exchange for a donation, remember that these items
have costs and that a portion of your contribution is being used to
pay for them. That leaves less for the beneficiary.
- Avoid cash gifts because they can
be lost or stolen. For security and record-keeping purposes,
it's best to pay by check. Make it payable to the beneficiary, not
the solicitor. Avoid solicitors who want to send a courier or use an
overnight delivery service to pick up your donation.
Charity Check-Up
Before you write your check, check out the organization with one of
these groups:
BBB Wise Giving Alliance
4200 Wilson Boulevard, Suite 800
Arlington, VA 22203-1838
(703) 276-0100
www.give.org
American Institute of Philanthropy
3450 Lake Shore Dr., Suite 2802 E
Chicago, IL 60657
(773) 529-2300
www.charitywatch.org
GuideStar
427 Scotland Street
Williamsburg, VA 23185
(757) 229-4631
www.guidestar.org
Your Local Charity Registration Office
Most states require charities to be registered or licensed by the
state. Contact your state Attorney General's office or Secretary of
State. Links to state charity regulators also can be found at the
National Association of State Charity Officials Web site -
www.nasconet.org.
Many smaller, newer or local charities may not be rated by these
organizations. Some fraternal organizations, such as police and fire
groups may not be rated at all.
Where to Complain
If you believe a particular organization may not be operating for
charitable purposes or is making misleading solicitations, contact
your state Attorney General or the Federal Trade Commission.
The FTC works for the consumer to
prevent fraudulent, deceptive and unfair business practices in the
marketplace and to provide information to help consumers spot, stop and
avoid them. To file a
complaint or to get free information
on consumer issues, visit
www.ftc.gov or
call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The
FTC enters Internet, telemarketing, identity theft and other fraud-related
complaints into
Consumer Sentinel, a
secure, online database available to hundreds of civil and criminal law
enforcement agencies in the U.S. and abroad.
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FEDERAL TRADE COMMISSION |
FOR THE CONSUMER |
1-877-FTC-HELP |
www.ftc.gov |
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Your Opportunity to Comment
The National Small Business Ombudsman and 10 Regional Fairness Boards
collect comments from small businesses about federal compliance and
enforcement activities. Each year, the Ombudsman evaluates the conduct
of these activities and rates each agency's responsiveness to small
businesses. Small businesses can comment to the Ombudsman without fear
of reprisal. To comment, call toll-free 1-888-REGFAIR (1-888-734-3247)
or go to www.sba.gov/ombudsman. May 2003 |