Charity Scams

Charity Scams: Get The Facts

As the Attorney General, I commend the many generous Arizonans who contribute their time, services and money to various charities. With reduced budgets and funds, charities are responding more than ever to those individuals and families in need. In such challenging times, charities depend more and more on our donations. As Attorney General, I urge you to make your charitable contributions wisely and cautiously to avoid charity scams and frauds.

There are a number of Arizona laws that regulate how charities may solicit donations. A.R.S. § 44-6554 requires many charities to register and file annual financial reports with the Secretary of State's Office. More information on charities registered with the State is available on the Secretary of State's Web site at www.azsos.gov.

A.R.S. §§ 44-6554 and 6555, Registration and Disclosure Requirements of Contracted Fundraisers.

Professional fundraisers are often used by charities to solicit contributions. These fundraising companies must register with the Secretary of State before they begin soliciting for any charity. To register, they must pay a bond and provide detailed information about their working agreement with the charity. Paid fundraisers are required to:

• inform you that they are being paid to solicit for the charity.
• send you certain written information about the fundraiser and the charity within 5 days.
• provide you with the toll-free number for the Arizona Secretary of State.

A.R.S. § 44-6561, Unlawful Practices.

A fundraiser cannot use the name, literature or symbol of a charity without the charity's written consent and cannot claim the organization he or she represents is a charity, unless it meets Arizona's legal definitions. The fundraiser may only claim the solicitation has the support or endorsement of a person or group with written consent.

Charities

1. Never give on impulse. Never give in to high-pressure requests for contributions or donations. Always obtain written information (including annual reports) about the charity before you donate. Always make sure you know how your donation is distributed. Always know how much of your donation will actually go to the charity itself (versus administrative costs). Legitimate charities will not pressure you for an immediate donation and are happy to provide information about their charity for you to review and share with neighbors, friends and family.
2. Never give cash. Always know the name, address and telephone number of the charity. Always make your check payable to the charity, never an individual, and be wary of names closely associated with the name of a well-known charity, using familiar words such as United, American or National.
3. Never give out personal information, such as your birth date, social security number, credit card number, checking account number or any financial information, to a solicitor either by telephone, mail or door-to-door.
4. Always ask for information to be sent to you and always send your donation directly to the organization.
5. Never give a donation to a charity that (a) offers to take your donation directly from your account, such as an automatic debit; (b) encourages you to send a donation by courier/overnight express; or (c) asks you to wire your donation. Always donate directly to the organization either in person (at an event sponsored by the charity) or through the United States Postal Service.

Fundraisers

1. Never give in to high-pressure or impulse giving. Be wary of appeals to your emotion or heart, especially those included in recent news stories of personal tragedy, property devastation or patriotism. You can also call news stations for details and verification. While many of us donate to charities for these very reasons, always know the organization or charity before making your donation. Ask for the identification of the fundraiser (name, address and telephone number). Always ask for proof of how your donation will be used. Always ask for written information. Always call the charity for verification and confirmation of the fundraiser’s representation of their charity.
2. Never give a donation to an organization (charity or fundraiser) that refuses to provide information in writing. Always review all written information before making a donation.
3. Always ask the fundraiser if they are a volunteer or a paid fundraiser. Always ask for information in writing of how much the fundraiser will keep of the donations collected and how much will actually go to the charity. Be wary of words like "majority, large, most of, large percent, administrative costs, processing fees, handling, etc."
4. Know the difference between "tax deductible" and "tax exempt." Tax deductible means you can deduct your donation on your federal income tax return. Tax exempt means the charity does not have to pay taxes. Even if a charity is tax exempt, your donation may not be tax deductible. If you would like a tax deduction, ask the charity for a receipt stating that your donation is tax deductible. For more information, see http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt027.shtm and www.give.org/tips/tax.asp or call 877.382.4357 for a brochure.

Thank you again for your generosity and making a difference. For more information about charities and fundraising, I strongly encourage you to contact the Federal Trade Commission at www.ftc.gov/charityfraud or 877.382.4357.

If you have questions or suspicions about a charity or a fundraiser before donating, please contact the following agencies:

Additional Resources

The following sites allow you to check on the financial health and standards of large charities and provides tips on giving efficiently and responsibly:

Charity Navigator
Evaluates the financial health of over 5,300 of America's largest charities

BBB For Charities and Donors

GuideStar
Gathers and publicizes information about nonprofit organizations.