Warning About Christmas Charities

News Release

The Holiday Season brings out the giving spirit in many of us, and consumers wanting to help those less fortunate have no shortage of charities to choose from. Faced with ever-rising costs, the loss of government funding, and an increasing demand for their services, charities are asking for larger contributions from more donors – and they’re asking for donations more often than ever before. Requests for charitable donations are made by various methods, such as telephone, by mail, door-to-door, email, fundraising events, etc.

But the Better Business Bureau cautions: for every legitimate organization raising funds for a valid cause, there are scam artists who impersonate charities in an effort to take advantage of your generosity and make a tidy profit for themselves.

Then there are charities that may give a portion of your donation to the actual cause, but not necessarily an amount you would consider acceptable. Ask how the funds raised are distributed. In some cases, a high percentage of the funds are used for administration, marketing or fundraising, leaving a small amount that actually goes to the cause.

Before you choose to contribute, do some research to ensure you are donating your money wisely. Here are some tips from the Better Business Bureau:

• Confirm the charity is registered with Canada Customs and Revenue Agency and look into how it distributes its income. Call Canada Customs at 1-800-267-2384 or go to their website www.ccra-adrc.gc.ca/charities and select the search function. Enter the name of the organization requesting a donation. If you find a match, click on the “Registered Charity Information Return” to look at the organization’s financial information returns. Compare the expenditures on the charity itself to the revenue delegated to other expenses. Determine how much of your contribution is likely to directly help the cause you are giving to.
• If solicited by a charity by telephone or at your door, do not provide cash or credit card information. Look up the organization’s number in your telephone directory and call them to find out if the organization is aware of the solicitation and has authorized the use of its name. If not, you could be dealing with a fraudulent solicitor.
• Ask for details about the organization such as their address, telephone number, and ask that they send you an annual report or financial statement indicating how the charity distributes the funds. A legitimate fundraiser would be happy if you offered to mail a cheque and should not pressure you to give right then and there.
• Do not succumb to pressure to give money on the spot or allow someone to pick it up. The charity that needs your money today will welcome it just as much tomorrow.
• Beware of fake charities using names that resemble well-established organizations. When in doubt, contact the organization you trust to find out if there is any affiliation. Fraud artists often take advantage of legitimate names to masquerade their intentions.
• Know the difference between “tax exempt” and “tax deductible”. Tax exempt means the organization doesn’t have to pay taxes. Tax deductible means you can deduct your contribution on your federal income tax return. Even though an organization is tax exempt, your contribution may not be tax deductible. Always ask if your contribution is tax deductible and request a receipt showing the amount of your contribution.
• Be skeptical if someone thanks you for a pledge you don’t remember making. When in doubt check your records. Be on the alert for invoices claiming you’ve made a pledge when you know you haven’t. Some unscrupulous people use this approach to get your money.
• Appeals that include sweepstakes promotions should disclose that you do not have to contribute to be eligible for the prizes offered. To require a donation would make the sweepstakes a lottery, which requires a lottery license.
• Familiarize yourself with the terminology fundraisers and charities use. Statements like “all proceeds go to the charity” can be misleading. The proceeds are what is left over after expenses, and at times can result in little contribution if the organization’s expenses are high.
• If in doubt, check with the Better Business Bureau at www.bbbvan.org or telephone 604-682-2711.

Remember, every time you give to a bogus charity, an organization that really needs your help loses out.