Seniors Legal Rights
Know Where Your Money Goes
Most of us have received phone calls and mailings asking for money to support a charitable organization. These charities usually sound worthy, with names and goals promising to find cures for cancer, help veterans, end hunger, provide needed services, and other worthwhile causes.
While most charities are honest and put their charitable dollars to good use, many do not. Americans lose millions of dollars each year to fraudulent charitable appeals. Therefore, it is important to obtain information about a charitable organization’s operations and how contributions are used before you donate.
Many charities use professional fundraisers, who may be paid a significant portion of your donation. Minnesota law does not require a charitable organization or its professional fundraiser to disclose to you how much of your donation goes to the cause. The burden, therefore, rests with you to find out how much of your donation will be applied to the organization’s mission and how much is going to the professional fundraiser.
Further, soliciting charities should be willing to tell you how they carry out their charitable mission, how much of the money they collect is used for program services, whether contributions are tax-deductible, and how much goes to fundraising and administration. You should not hesitate to ask these questions to help you decide whether to contribute. A charity that refuses to answer your questions or takes offense to them should give you pause.
Some additional guidelines for smart giving include:
- Check with the Minnesota Attorney General’s Office to determine if the organization is registered. Registration documents will also contain financial information about the organization, shedding light on how much money it raises and how it spends its funds on employee salaries, fundraising, overhead, and program services.
- Don’t judge a charity solely on its impressive sounding name.
- Ask how the charitable purpose will be accomplished.
- Ask how much of the contribution will pay fundraising and overhead costs.
- Ask if the person calling is a professional fundraiser and, if so, what amount or percentage of your donation will go to pay the fundraiser.
- Ask whether your contribution is tax-deductible.
- Don’t be unduly swayed by emotional appeals or because the organization has sent you unrequested address labels, postcards, or other trinkets. If you pledged a donation and you later change your mind, you do not have to send in your donation. You have no obligation to donate to a charity.
- Don’t be pressured. Ask for written information. If convinced, send payment later.
- Contribute by check or credit card. Cash donations are impossible to trace and difficult for the charity to protect.
- Never provide your credit card number unless you know the charity and you call the charity yourself. Giving out a credit card number, account number, or other personal information in response to an unsolicited phone call is the equivalent of giving this information to a complete stranger, and can lead to identity theft.
For more information on charities and wise giving, contact the Attorney General’s Office Charities Division:
Minnesota Attorney General’s Office
445 Minnesota Street, Suite 1200
St. Paul, Minnesota 55101
(651) 757-1496 or (800) 657-3787
(800) 627-3529 (Minnesota Relay)
To look at summary information from registration materials filed by charities, use the Charities Search page of the Attorney General’s Office’s website.