Thursday, July 30, 2009

Cracking Down on Bogus Charities

By Jerry Brown

As part of a nationwide crackdown on fraudulent charities, my office recently filed eight lawsuits against 53 individuals, 17 telemarketers and 12 charities that "shamelessly exploited" people's generosity and squandered millions of dollars of donations intended to help police, firefighters and veterans.

These suits are intended to permanently stop the charities' deceptive practices and require the repayment of all funds raised under false pretenses. My office is seeking involuntary dissolution of eight of the charities.

These individuals shamelessly exploited the goodwill of decent citizens trying to help police, firefighters and veterans. In point of fact, a shockingly small portion of donations went to those in need, while millions went to pay for aggressive telemarketing and bloated overhead - and in one case, to purchase a 30-foot sailboat.

These suits were filed in conjunction with the Federal Trade Commission and 48 other states as part of a nationwide sweep called "Operation False Charity."

In California, just as in the other participating states, the so-called charities raised millions of dollars based on false claims that donors' contributions would benefit police, firefighters and veterans organizations. But in reality, these charities rarely benefit public safety personnel. And, in most cases, 85 percent to 90 percent of donations are used to pay the fees of for-profit telemarketing firms.

Last year, I launched an investigation into 12 of the worst offenders, resulting in the eight cases filed today in Los Angeles, Orange, San Bernardino, and San Mateo counties. It is estimated that since 2005, hundreds of thousands of Californians have been deceived by the solicitation campaigns these charities and their fundraisers have conducted.

Here are tips to avoid being the victims of charity fraud:

- If you receive an unsolicited call asking for a donation, it is most likely from a paid telemarketer who may keep a substantial part of your donation as payment of fundraising fees.

- Recognize that the words 'veterans' or 'military families' in an organization's name don't necessarily mean that veterans or the families of active-duty personnel will benefit from your donation.

- Donate to charities with a track record and a history. Charities that spring up overnight may disappear just as quickly.

- If you have any doubt about whether you have made a pledge or a contribution, check your records. If you don=t remember making the donation or pledge, resist the pressure to give.

- Check out an organization before donating. Some phony charities use names, seals and logos that look or sound like those of respected, well-established organizations.

- Ask the soliciting charity or the paid fundraiser what percentage of your donation will go towards fundraising expenses and what percentage will go towards the charity's charitable purpose.

- Do not send or give cash donations. For security and tax record purposes, it is best to pay by check made payable to the charity.

- Ask for a receipt showing the amount of your contribution.

- Be wary of promises of guaranteed sweepstakes winnings in exchange for a contribution. You never have to give a donation to be eligible to win a sweepstakes.

There are a number of resources to obtain information about a charity. My website is a good place to start.

Use the search feature to find out if a charity and its fundraiser are registered. Review the Attorney General's Guide to Charitable Giving for Donors for additional tips. Other sites that have valuable information include:

American Institute of Philanthropy
Better Business Bureau Wise Giving Alliance
CharityNavigator
Federal Trade Commission

Jerry Brown is Attorney General of California.

5 comments:

  1. AG Brown, thank you for poking at 12 questionable non-profits. It's a curious tactic as you are busily gathering donations from gambling, chemical, utility and other special interest groups for your own pet charities.

    http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/07/29/MNS018VRJO.DTL

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  2. I have no problem with office holders raising money for charities, as long as they are legitimate ones.

    There's a big difference between what AG Brown is doing to help the Oakland Military Institute and Oakland School of the Arts and the bogus charities that exist to line the pockets of the people who run them by tricking donors.

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  3. Jerry Brown has been around politics a long time and he's Mr. Clean. He may be the most honest and free from corruption guy we have in Sacramento.

    I hope he runs for governor because its been a long time since we had a governor with intelligence and integrity.

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  4. I agree with both Dan and the last commenter.

    Mr. Brown helps charities that provide a positive public service and goes after the ones that prey on our generosity for personal gain. You'd have to be pretty cynical to attack him for that.

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  5. Anonymous @ 10:42 AM,

    Looks like somebody's getting their talking points from Watch Dog. Have anything original to add?

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