Giving to a local charity may feel like the right thing to do, but doing a bit of research early on could help protect your wallet.
Under the Maryland Solicitations Act, charities that ask for money are required to file financial paperwork each year with the Office of the Secretary of State, however there's no annual inspection. Like animal control, the Office is mostly complaint driven and if they receive one, the investigations division looks into it. They also have a website where people can check if a charity is in compliance.
There are a number of charities currently not in compliance. Of the more than 10,000 charities in the online database, over 1,600 are delinquent.
“There should be some oversight, there should be some level of inspection to make sure the levels of cleanliness are met, the pets are kept in healthy environments,” said Christine Sandberg, president of Rescue Well and founder of coalitions of Rescue – East.. “What we do is we become very aware of one another. We share what we do and how we do it. And if there is a concern, and we've had a few groups with some concerns, we've followed up with them and met with them and asked the right questions and started pushing the envelope a little bit with their policies and procedures.”
To avoid losing money, it’s best to go through this background checklist:
- Get the charity’s exact name and information. Ask for their name, address, and written information on programs and finances.
- When in doubt, check it out. If you are unfamiliar with an organization soliciting donations, don’t give without getting details about the charity first.
- Resist pressure to give on the spot, whether from a telemarketer or door-to-door solicitor.
- Watch out for cases of mistaken identity. Some charity names sound alike. Be careful that the one soliciting you is the one you have in mind.
- Be wary of heart-wrenching appeals. What matters is what the charity is doing to help.
- Press for specifics. If the charity says it’s helping the homeless, for example, ask how and where it’s working.
- Know how much of your purchase goes to the charity. If something is being sold to benefit a charity, be wary of statements such as “all proceeds go to charity.” Look for a disclosure that states exactly how much will go to the charity’s programs.
- Watch out for charity fraud. Legitimate charities are transparent and willingly provide written information about their programs and finances.
- Give by check or credit card. Charitable contributions to tax-exempt organizations may be tax-deductible to you. When you give by check or credit card, you have proof of your donation when it’s time to do your taxes. Never give via wire transfer.
- Check websites for basics. A charity’s mission, program and finances should be available on its site. If not, check for a report at www.give.org.
- Check with state charity officials. In Maryland, non-profits must be registered with the Secretary of State to solicit money. You can also check an organization’s tax status at www.irs.gov/app/eos.
“The bottom line is doing your homework. The challenge is with that emotional appeal. If you’re an animal lover and you see this, the emotions take over," said Angie Barnett, president and CEO of the Better Business Bureau Serving Greater Maryland.
There are multiple resources donors can use to better track how a charity spends their funds. Donors can request copies of financial statements for charities registered with the IRS or Secretary of State.
There are also a number of websites that have more information on nonprofits, however smaller charities aren’t always listed on these sites. Below are links to the various websites.
It is also recommended that donors do a google search for any news reports involving the charity or check out Maryland Judiciary Case Search to view any legal action filed against the charity operator.
You can also report any suspicious activity or charity violations to the Secretary of State by clicking here.
Don't let your emotions stop you from doing research, and don't assume that an organization is legitimate just because it has a website.
The Better Business Bureau Wise Giving Alliance helps serve as a watchdog, evaluating the business practices and effectiveness of non-profits using a set of national standards, but if you observe issues within an organization, Barnett says it's best to alert the authorities.