CHAMPAIGN Santa's workshop isn't the only place buzzing with activity during this time of year.
From alma mater to United Way, nonprofit organizations are busy soliciting donations. In the University of Illinois' Harker Hall, student workers are dialing up alumni. United Way staffers are making the rounds at area businesses and drumming up financial support. Volunteers and staff at the Champaign County Humane Society are gearing up for Santa Paws, the annual pet portraits fund-raising event.
'Tis the season to give.
"We're a generous people," said Art Taylor, president and chief executive officer of the Better Business Bureau's Wise Giving Alliance in Arlington, Va.
Last year, Americans donated $188.73 billion to religious, education, human services and other nonprofit organizations, according to the American Association of Fundraising Counsel in Indianapolis.
"We want people to give money. Through these nonprofit organizations, we are able to express our hopes for better communities," Taylor said. "But we have an obligation to check these people out."
Every year, people are defrauded by for-profit companies that solicit financial donations over the phone or by going door-to-door and convincing people they will hand over the money to charities when, in fact, they don't hand over any money, or they keep a majority of the funds for themselves. The Federal Trade Commission and the State of Illinois Attorney General's Office have filed suits against those who violated laws by not filing reports properly, not accounting for the money they raised or by misleading consumers. The attorney general's office also has a case pending against a professional fund-raiser who em-ployed convicted felons who directly solicited the public.
To avoid becoming a victim of charity fraud, consumer watchdog groups and governmental agencies urge you to take the time to find out who you are giving to and how much of your money will reach the needy.
"The No. 1 reason people write a check to a charity is that they believe in the mission," said Stephen Notaro, exe-cutive director of the Cham- paign County Humane Society. As a result, his staff feels they have "a huge responsibility to maximize that gift," he said.
To make sure your money is being funneled to the right recipients, whether your donation is $50 or $5,000, ask questions, experts said.
"A lot of people don't feel comfortable asking questions ... but the more you ask, the more you can find out if they are legitimate," Taylor said.
What do you know about charity?
Chances are, more and more people are calling you or stopping by your home or your workplace soliciting donations. Some charities you may have heard of, others you may not.
The number of 501(c)(3) or-ganizations (the Internal Revenue Service's term for non- profit, charitable organizations) in the United States has climbed steadily since the 1990s. In 1993, there were 575,690, and in 2002, there were 909,574, said the American Association of Fund-raising Counsel.
Illinois is home to about 25,000 charitable groups, according to the attorney general's office. In East Central Illinois, there are more than 1,300 nonprofit organizations, from the multimillion-dollar University of Illinois Foundation and Carle Foundation Hospital to local parent and teacher associations.
One of the first things you should ask someone seeking a donation is if the charity is registered with the attorney general's office, which regulates them, the office advises. You can find out by calling the attorney general's Charitable Trusts Bureau at (312) 814-2595. The bureau maintains annual re-ports submitted by the charities, which can be requested by calling the bureau. The office hopes to have information available online, at www.ag.state.il.us, in early 2004, said spokeswoman Melissa Merz.
Also, the charities themselves can provide you with their reports, if you ask.
Reports about a charity's mission and finances also are available online at www.guidestar.com. GuideStar contains financial and program in-formation on hundreds of thousands of charitable organizations. It recently received a $1.3 million federal grant to create a central repository for charity registration, reporting and enforcement information.
Another Internet resource is the Web site of the Better Business Bureau's Wise Giving Alliance, www.give.org, which contains information about national charities, including financial reports, amount the charity spends on fund raising and how its leaders are financially compensated.
To learn about a charity, you can read about its activities in its annual report or brochure, or better yet, go and visit its offices, Notaro suggested.
"One of the benefits of giving locally is that you can visit the charity. You can talk to the managers and see what they're doing," he said.
If someone calls you soliciting a donation on the phone, ask the solicitor if he or she is a member of the charity or a professional fund-raiser, paid by the charity to solicit donations, the attorney general's office said. By law, telemarketers have to state whom they are working for, if you ask. They are also not allowed to block caller ID.
If a police or firefighter organization calls you asking for money, be sure to find out the exact name of the organization he or she is working for. In some cases, for-profit companies have tried to solicit money by sounding like a well-known nonprofit organization, the Wise Giving Alliance said.
If the telemarketer says he or she is a professional fund-raiser, ask what percentage of the donation goes to the charity and what percentage goes to the fund-raising firm. If the caller becomes frustrated, it may be a signal he or she is working for a phony charity, Taylor said.
"A good organization will be patient with you. They're not trying to solicit you this one time," he said.
Legitimate charities also are happy to take your check next week or next month, not necessarily at the moment a volunteer or staff person calls you or stops by your house, he said.
Further, if the caller claims your donation will help a local charity, call the organization to make sure, the Federal Trade Commission recommends.
Is your money well spent?
In order to spread the word about themselves and solicit do-nations, nonprofit organizations spend thousands or millions of dollars on fund raising, from printing and mailing brochures to paying professional fund-raisers to call you at home.
"Donors today are more educated," said Tammy Lemke, president and CEO of the Champaign County United Way. "They won't just give to you because of your name."
During its 2001 fiscal year, which ended June 2002, the Champaign County United Way brought in $2.73 million in direct public support. About 16 percent of the money was spent on fund raising and managing its programs, according to 2001 tax forms. It spent $316,747 on fund raising, plus $135,370 in management and general expenses.
"In order to raise money, you have to spend money," Lemke said. The United Way staffs two full-time employees who raise money for the organization.
"We can't do it with less staff. If we print less brochures or spent less on advertising, people wouldn't know about what we're doing," Lemke said.
The Better Business Bureau's Wise Giving Alliance recommends that fund-raising costs should not amount to more than 35 percent of the total contributions.
Some organizations operate below this level. Others do not.
Of the $66,628 the Champaign Police Charities Association received in public support in 2001, 67 percent of it $44,656 went to pay for professional fees, according to the association's 2001 tax forms. A little over $12,000 funded the organization's charitable programs.
The United Way does not solicit donations by telemarketing or direct mail campaigns. But the UI Foundation does, as does the Champaign County Humane Society.
The humane society received $455,603 in direct public support in 2001 and spent $120,834 on fund raising. Just over $61,000 was paid to a telemarketing firm for conducting a telephone fund-raising campaign, according to the society's tax forms. Of the approximately $100,000 the telemarketing firm raised, it kept $61,145, and the society received $40,818.
Notaro said the society hires professional fund-raisers be-cause it does not have a development director or develop- ment staff, and it would cost the society a significant sum to hire people and rent space for them to call potential donors. The $61,145 it paid to the telemarketing firm also included costs for the firm to mail thank-you notes to donors, he said.
"It's not like we're selling a product you don't really want," Notaro said. "When we call someone on the phone, we're extremely polite and honor their requests if they don't want to be called."
People who placed their phone numbers on the national Do Not Call Registry can still expect charities to call asking for donations. Nonprofit groups are exempt.
Telemarketing has been "very helpful. It's been a boon to all fund-raisers," said Jim Gobberdeil, communications director for the UI Foundation. "It's more personal than direct mail," he said.
In the last 20 years, the foundation has seen "solid growth" in the amount of money raised by telemarketing, he said.
The foundation spent about $6.3 million on fund raising, or 4 percent of the approximately $166 million it raised during fiscal year 2001, which ended June 30, 2002. Plus, it spent about $7 million in administration.
"People are most expensive," Gobberdeil said.
Compared to other charitable organizations, "our overhead is pretty low," said Cindi Parr, de-velopment director of the Eastern Illinois Foodbank, where most of the staff is volunteer. The food bank spent $63,111 on fund raising and $74,370 in management in 2002. Public support totaled $7.76 million.
Charity watchers also advise people to ask what percentage of the donations will go toward running the organization, in-cluding how much it pays its top staff or board members and professional contractors. This information is included in the organization's tax form, the IRS Form 990 under Schedule A Parts I and II.
How to avoid fund-raising fraud
Questions to ask a solicitor:
What is the charity's name?
Where is it headquartered?
What is its mission? How long has it been in existence?
Is the charity registered with the Illinois Attorney General's Office?
How much of the donation will fund charitable programs?
How much money will be spent on fund raising? on administration?
Are you a volunteer with the charity or a paid fund-raiser?
Can you send me a copy of a recent financial report?
If you donate money to a charity, write a check to the organization. Do not give cash.
Don't give your bank account or credit card numbers to an organization you don't know.
Legitimate charities will accept your money any time of year. Take your time. Request a financial report, review it, then mail your check.
You can find out if a charity is registered by calling the Illinois Attorney General's Charitable Trusts Bureau at (312) 814-2595. You can also re-quest annual reports by calling the bureau. The attorney general's Web site, www.ag.state.il.us, also lists tips on how to donate wisely.
You can search the Internal Revenue Service database at http://www.irs.gov/charities/ or call the IRS at (877) 829-5500 to find out if an organization is registered as a charitable orgnization for federal tax purposes.
The Better Business Bureau's Wise Giving Alliance offers advice online at www.give.org.
GuideStar, www.guidestar.com. maintains financial and program reports on hundreds of thousands of charities.
Viewing IRS forms
A charity is required to allow you to view its IRS Form 990 and the schedules and supporting documents that accompany it. Part 1 on the 990 details money spent on fund raising, administration and program services. Schedule A Parts I and II detail compensation paid to top employees and professional contractors.
You can view the IRS documents at the charity's office at no charge and take notes. While there, you can ask the charity to photocopy the documents for you. It can charge you a fee for any photocopies. If you don't want to visit the charity, the charity can mail you photocopies of the forms for a fee.
If a charity refuses to let you view the documents, you can report it to the IRS by writing to the IRS Examination Division, 1100 Commerce St., Attn: T:EO:E, Dallas, Texas 75242. Be sure to include the name and address of the charity.
Sources: Better Business Bureau, Federal Trade Commission, IRS, Illinois attorney general's office.