ho says Americans don't have big hearts? According to the American Institute of Philanthropy in Bethesda, Md., we give roughly $150 billion a year to charities. Of that total, 88% comes from individuals rather than from corporate donors.

More than heart, however, should enter into charitable giving. The head has a role to play, too. Givers need to seek information and "use common sense," points out American Institute of Philanthropy President Daniel Borochoff. "It's gotten better, but it used to be if you asked a question of a charity, the response was 'How dare you?' " The implication was that no one should doubt anyone devoted to good works.

But that kind of complacency has been shaken by a few charity-related scandals in recent years. Take, for instance, the former United Way executive who ended up in prison for using more than $1 million of the charity's money to pad his own pockets. Such episodes brought charitable organizations under scrutiny like never before.

As well they should be. They are, after all, spending your money. Still, it's important to remember that the vast majority of charities are indeed doing "good works," not scamming the public. Those in the latter category are "a very small number," emphasizes Daniel Langan of the National Charities Information Bureau in New York City. "But when they hit the headlines, they have a bigger impact, and they cast a shadow over the very good ones."

So how do you sift out the good charities? How do you make sure your money is being used the way you want it to be? Here are a few guidelines to follow when deciding where to give your donations.
      The vast majority
      of charities are
      doing "good works,"
      not scamming
      the public.

1. Find out who's asking.
"If it's a professional solicitor," Borochoff says, "there's a high likelihood that only about a third of the money will make its way to the cause" by the time the charity pays the solicitor's hefty fees. So ask who's on the other end of the line. If it's a paid solicitor, you could skip the pledge now and send a check later directly to the charity.

2. Check the organization's finances.
How much of the charity's resources goes into actual programs, and how much gets eaten up by fund-raising campaigns? "Sixty cents out of every dollar they spend should go to programs," Langan advises. "That's a bare minimum, unless it's a group that's three years old or less," which means it still may be incurring start-up costs. Several watchdog organizations keep tabs on financial and other information related to hundreds of charities (see sidebar).

3. Get it in print.
If an organization you've never heard of contacts you by phone, and it sounds good, ask the caller to send more information before you give. If the caller refuses, end the conversation.

But couldn't the organization just turn around and mail you bogus printed information? "That's unlikely," Langan says. "If you specifically ask what percent of the money goes to programs, not to overhead, you're going to get a straight answer." Groups avoid printing false figures, Langan explains, because doing so sets them up for lawsuits. State attorneys general "thrive on that kind of misinformation," he notes.

4. Pin down what the charity does.
How specific are the charity's program descriptions? "For example, if the charity says it's raising money to help the homeless, how is it doing so?" points out Bennett Weiner of the Philanthropic Advisory Service of the Council of Better Business Bureaus, Arlington, Va. "Do they provide a shelter? Vocational training? Food? What are they doing for those individuals?"

Also, avoid relying on image alone when judging a charity. A group that's long been revered could be "living on its illustrious history," Borochoff warns. "They'll say, 'Since we've existed, we've done this and this.' Well, that's great. But what are they doing now?"
      A charity
      should spend at least
      60% of its dollars
      on programs,
      not overhead.

5. Watch for cases of mistaken identity.
Certain words--such as children, animals, cancer--have a way of cropping up frequently in charity group names. Be sure the organization you're giving to is the one you think it is. "In some cases, the name similarity is just a matter of coincidence," Weiner points out, "because they're raising money for the same goal. In other cases, it may be done with the intention to confuse."

6. Walk away from pressure tactics.
Any charity that implores you to send money immediately, without giving you a chance to get more information, is definitely suspicious. Even more suspect is any group that says it will send someone right over to pick up a check. A legitimate charity will be happy to receive your money any time, whether it's today or next month.

7. Beware the sob stories.
"Watch out for appeals that make you cry, instead of think," Weiner cautions. Overly emotional appeals may be aiming to elicit an impulsive donation from you, rather than one you've carefully thought through.

8. Don't assume tax deductibility.
If it's important to you that your donations be tax-deductible, check closely. Not all organizations soliciting donations are charities. To be sure your contribution will be tax-deductible, find out if the group has a 501(c)(3) designation from the Internal Revenue Service.

9. Pay by check.
Don't let your guard down about giving out credit card information to strangers just because it's "for a good cause." Generally, it's best to donate by check. "It's different if you're initiating the call to the charity," Weiner notes. "Then you might make a credit card donation."

Here's More Help

Want an objective opinion about a particular charity? Here are some groups to contact:

  • National Charities Information Bureau--Publishes quarterly Wise Giving Guide (single copy free). Request by mail, phone, or e-mail: 19 Union Square West, New York, NY 10003; 212-929-6300.
  • Council of Better Business Bureaus/Philanthropic Advisory Service--Publishes quarterly Give, But Give Wisely. Single copy available free during the peak giving season, October through December ($3 at other times). For a free copy, send stamped, self-addressed, business-size envelope to Holiday Giving, Council of Better Business Bureaus, 4200 Wilson Blvd., Suite 800, Arlington, VA 22203.
  • American Institute of Philanthropy--Publishes quarterly Charity Rating Guide and Watchdog Report. For a single copy, send $3 to cover postage and handling to 4905 Del Ray Ave., Suite 300, Bethesda, MD 20814.
  • Your state attorney general's office or similar agency--Many states require charities soliciting within their borders to register. The appropriate state agency can tell you if the group is registered and may provide additional information.
  • Your local Better Business Bureau--Ask if it evaluates local charities. Even if it conducts no formal evaluation, it may be able to tell you whether it has received any consumer complaints on a specific organization.

©1998 Credit Union National Association, Inc.