Donors should avoid irresponsible nonprofits
Now that the gift-giving season is upon us, Attorney General John Kroger is releasing a list of Oregon’s 20 Worst Charities, offering tips to consumers on donating wisely and unveiling a landmark legislative proposal to combat unscrupulous non-profits.
“It is important that generous Oregonians make charitable contributions to legitimate organizations,” Kroger said. “Many charities do great work, but some are little more than scams that do little to help the people they claim to support.”
In addition to increasing consumer awareness, Attorney General Kroger will ask the 2011 Legislature to pass a law making Oregon the first state in the country to use the tax code to fight charities that spend most of the money they raise on telemarketers and administration. The proposal will eliminate the Oregon tax deduction for donations to charities that spend less than 30 percent of the money they raise on the people they claim to support.
“This proposal will help kick sham charities out of Oregon,” said Kroger. “If the rest of the country follows Oregon’s lead, we could end the rampant abuse of nonprofit laws.”
State law requires charities to file periodic financial reports with the Oregon Department of Justice disclosing how much money the organization raised and how the funds were spent. The Department’s Charitable Activities Section has identified 20 organizations that spent more than 75 percent of the donations they collected on administrative costs and professional fundraising.
While guidelines issued by the Better Business Bureau (BBB) suggest that charitable organizations should spend at least 65 percent of their funds on charitable programs, every charity on the Department of Justice’s list devoted less than 25 percent of their expenditures on charitable program activities.
At the top of the list is Shiloh International Ministries, which claims to solicit money to provide medical necessities and moral support to needy children and to provide assistance to the homeless. According to the most recent financial filings, the California-based nonprofit spent an average of $937,315 per year, 96.37 percent of which went to management and fundraising.
No. 2 on the list is Law Enforcement Education Program, which supposedly raises money to educate teenagers on the effects of alcohol. The Michigan-based nonprofit spent just 6.26 percent of the annual average $1,893,929 it raised on charitable purposes.
The Korean War Veterans National Museum and Library was one of many groups on the list that says it raises money to help veterans. The Illinois-based group spent 96.97 percent of the annual average $2,265,809 it raised on telemarketing and administration.
Kroger cannot dictate how charities spend your money, but he is providing Oregonians some basic advice to ensure your gifts go to a worthy cause.
Before donating, it is important to make sure the organization is registered with the Attorney General’s Office by searching the Department’s online database or by calling 971-673-1880. You can also visit www.guidestar.org, a national clearinghouse of information on charities and their performance.
Attorney General Kroger also cautions Oregonians to watch out for solicitations that thank you for your previous support and charities that send invoices claiming you made a recent pledge when you didn’t. These methods are intentionally confusing and dishonest ways to gain donations.
Consumers are advised against giving out their personal information over the phone. Legitimate charities will accept contributions by check, which should always be made payable to the organization not the individual collecting the donation.