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Investigate before you donate: Scammers just waiting to take advantage of hurried, end-of-year contributions

By Linda A. Moore/The Commercial Appeal

December 31, 2009

The odds are good that in your e-mail inbox sits a solicitation from some unknown charity reminding you that there’s still time to make a tax-deductible donation this year.

Or perhaps you want to begin the New Year with a giving heart and an open checkbook.

Experts say you shouldn’t be so eager to give that you give unwisely. Scam artists abound, so it’s wise to research nonprofit agencies before donating.

“I would urge people to make sure they understand to whom they are giving before writing that check,” said Todd Kelley, director of the division of charitable solicitations and gaming with the Tennessee Department of State.

His division is currently investigating an organization that claims to be soliciting to benefit veterans. And a few years ago, he said, another organization claimed to be a group of police officers raising money to buy bulletproof vests.

“I think it was Ronald Reagan who said, ‘Trust, but verify,’” Kelley said, adding that you should ask questions and don’t feel pressured to give on the spot.

Get the organization to provide a percentage breakdown of how much money goes to administration and fundraising, and how much goes toward the programs and services, he advised.

Charities must be registered with the state to solicit and must include financial information, which is available online in Tennessee, Arkansas and Mississippi.

“A summary of their most recent information is on our Web site, so you as a donor, before you donate, can look and see how the organization is spending the money,” Kelley said.

Donors should know the difference between tax-exempt and tax-deductible, said Nancy Crawford, director of marketing and communications with the Better Business Bureau of the Mid-South. Not all nonprofit groups accept donations, and contributions to some may not be allowable income tax deductions.

“For example,” Crawford said, “the Better Business Bureau is a 501©(6) nonprofit organization. We don’t pay income taxes, but you can’t donate to us.”

Many faux charities use names similar to well-established nonprofit groups, so you should pay attention, the experts said.

The scammers also follow natural disasters and headlines in the news, Crawford said.

Recently, someone in the Memphis area began soliciting for the Regional Medical Center at Memphis, which was reporting funding problems.

“So when they called people it sounded legitimate,” Crawford said.

Area charities have reported that the sluggish economy and unemployment in the double-digits have left them unable to help the growing number of people in need.

“I think that makes it even more important for those people who are giving to give to charities who are spending their money wisely,” Kelley said.

Charity Donor Homework

Check charity registrations with your state at:

Tennessee Division of Charitable Solicitations and Gaming at (615) 741-2555 or

Mississippi Secretary of State, (601) 359-1633 or

Arkansas Attorney General’s Office at (501) 682-2007 or

For the tax-exempt status of a non-profit, go to

Learn more on giving wisely at

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