Legal Charities

Charities, non profits, trusts, foundations and other organizations are all generally formed to benefit a specific group, purpose or cause. However, with the number of charities in the world today, how do you know which charities are legal charities?
 
 
Philanthropists may become confused when deciding where to generously bestow donations. How can you tell if a charity is spending your money on the cause it claims it is? With scandals and fake charities in the news, many people become skeptical of charities in general.
 
This, however, doesn't have to be the case. Legal charities will make sure that you know who backs and monitors their cause, how your money will be spent and more. Charities that withhold information or can't answer questions like these may not be legal charities.

How Charities are Monitored

Charities are required to register with the government to receive tax exemptions to which they are entitled. This allows the government to monitor a charity's activity and ensure that its actions are legitimate.
 
Other organizations, such as the Better Business Bureau, also keep records of charities and monitor how they spend their money, their record keeping and more. Potential donors can request information on charities from the government and from organizations like the Better Business Bureau before deciding to donate money to an organization.

Definitions of a Charity

Before donating to a charity, it's also useful to understand some things about the charity to which you'd like to donate. Not all charities are non profit organizations: Some may exist in a for-profit format, so it's important to know how much of your donation will benefit the cause you are donating to.
 
Even legal non profit charities cannot give 100 percent of their donations to the causes that they benefit. Operating costs and wages of those who work for the charitable organization must also be covered by the generous donations of philanthropists.
 
Most charities will publish facts and figures on their Web sites and in brochures that show people exactly where their money is going.

Avoiding Non-Legal Charities and Charity Scams

As sad as it is that people would take advantage of the generosity of others, charity scams are prevalent, especially on the Internet. To avoid being the victim of a charity scam, make sure to follow these tips:
  • Check up on a charity through one of these organizations before making any donations:
    • American Institute of Philanthropy
    • Better Business Bureau Wise Giving Alliance
    • Charity Navigator
    • Development Ratings
    • GuideStar
    • Intelligent Giving.

  • Don't click on links in e-mails to charitable organization Web sites. These links may take you to fake sites that resemble legitimate charitable Web sites.

  • Don't respond directly to e-mails seeking charitable donations. They may not be from the organization that they claim to be from.

  • To visit a charity's Web site, go through a search engine and make sure the site you arrive at is the site registered to the charity. (This can be checked through any of the above-mentioned monitoring agencies.)
While these precautions may seem unnecessary, they will ensure that your money is not wasted on a charity scam and that your personal information stays safe.
 
Resources
 
Hoovers (2007). America's Charities. Retrieved December 11, 2007, from the Hoovers Web site: http://www.hoovers.com/america's-charities/--ID__130478--/
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