Tennessee State Seal
Ensure Your Charitable Contribution Goes to Charity
(Published: December 21, 2009)

(This column was originally published in the Johnson City Press Dec. 13, 2009.)

The three wise men are among the Christmas season’s best-known icons. However, when it comes to charitable contributions, some of us don’t always make wise decisions.

The period between Thanksgiving and Christmas is traditionally one of the busiest fundraising periods of the year for many charities. Some collect as much as half of their total contributions during the holidays. That isn’t too surprising since many of us, filled with the holiday spirit, give some of our money to worthy causes at this time of year.

The problem, though, is some charities aren’t quite as charitable as they lead people to believe. In some cases, only a small portion (or none) of the money they receive is actually spent on their charitable missions.

And so, just as people are trying to make the most of their purchases during these economic hard times, it is important to make sure the dollars you donate to charity are good investments as well.

Consumers who are buying a car, an appliance or other expensive merchandise tend to ask a lot of questions. People who are thinking about giving money to a charity should do the same.

If you are approached by someone raising money for a charity, don’t feel pressured into making a contribution on the spot. And remember that it’s usually not a good idea to give out credit card numbers or other personal information.

Ask questions about the organization’s purpose and exactly how your money would be spent.

Is the person asking you for money actually affiliated with that organization or is the person a third-party professional fundraiser? And if the person is a professional fundraiser, what portion of your donation will actually go to the intended charity?

If all this sounds time consuming and you would rather not ask your questions right when you are solicited on the street or over the telephone, remember that representatives from reputable charities shouldn’t mind sharing the addresses and phone numbers for their organizations so you can follow up with them later.

One key point to consider: As a rule of thumb, a substantial majority of a charity’s budget should be dedicated to programs and services, not administrative costs or other expenses.

In Tennessee, charitable organizations, except those specifically exempted by law, are required to register and file annual financial reports with the Department of State’s Division of Charitable Solicitations and Gaming. Those financial reports, which provide some detail about how donations are being spent, can be viewed on the Department of State web site at: http://www.state.tn.us/sos/charity. Information is also available by calling the Division at (615) 741-2555.

The types of groups exempted from filing are also listed on the web site – and they include organizations such as religious and educational institutions, volunteer fire departments and rescue squads, political groups, hospitals and nursing homes.

Just because an organization has registered with the state doesn’t mean it is “legitimate.” But potential donors can learn a lot about a charity by accessing the information that is available in our records. And if an organization should be registered with the state but isn’t, then that should raise a pretty big red flag.

Also, the Division has authority to investigate and impose civil penalties against charities and individuals that engage in unfair, false, misleading or deceptive fundraising acts and practices. The Division can also refer cases to the district attorney general’s office for criminal prosecution.

There are also a number of private watchdog organizations that monitor and issue reports about how charitable groups spend their money.

There are many fine organizations out there that are badly in need of as many donations as they can get and with a little homework, your chances are greater that your hard-earned money will go to a group that will spend it wisely.

Tre Hargett is Tennessee’s Secretary of State.