Have you been a victim of a charity scam? Do you know where the money you’re spending in a thrift store is going? How do you know where your donations really go? It sure doesn’t feel good when you’re trying to be a “good guy”, and someone takes advantage of you.
There are many reasons to patronize both for-profit and not-for-profit resale stores in our communities. Unfortunately, many of us have become skittish because some for-profit stores misrepresent themselves, or are out-and-out scams, and legitimate charities are the real victims when people lose trust.
When in doubt, check it out…
Charities must be listed as exempt from federal income taxes under Section 501(c). Registered charities need to be certified, an organization needs to submit all financial information, mission statements, and more. They’re also required to be transparent, including having their annual financial statements available and providing tax receipts to donors.
If you suspect a business is a charity scam, ask to see their tax exempt letter, their published financial statement, or request a tax receipt. You might also ask what percentage of their revenue actually goes to support their mission.
Three good online references:
- IRS listing of tax-exempt charities.
- The Better Business Bureau offers this service where you can search for charities and check on their credentials.
Sometimes I think donation boxes in parking lots multiple when we sleep, as they’ve become as plentiful as stop signs. Have you noticed that some are clearly marked with the intended destination, and others only say “Donation Box”?
When putting boxes on public or private property other than their own, a business needs permission. Check with your community ordinance department or the property owner to follow the trail to the true source.
Whether they’ve called you to schedule a pick-up, or you’ve called them, before your bags, boxes, or furniture gets tossed in the truck, verify that you’ll be getting a legitimate tax receipt.
Some unscrupulous for-profit companies pay charities to use their names and logos on trucks. Because they pay for the privilege, they call them “donations to charity”, and mislead you into thinking all the profits go directly to the not-for-profits.
Just because you see a familiar color or logo, don’t make assumptions. Look for any small print on the truck. You may have to squint.
INTO THE POCKETS OF THE SUITS
Sometimes there is a fine line between being illegal and being deceptive. There are companies, both independent and national chains, that aren’t technically guilty of fraud because they never state they are charities or non-profit organizations, but they certainly don’t do everything they can to discourage this impression.
Most often a small portion of their proceeds will be given to popular charities, but the rest of the profits go right into the pockets of the business owners.
Some companies buy the unwanted donations from legitimate non-profits to sell in their own stores, which is okay, but they call this a “donation” to the charity while they build their own inventory and sell it to you.
We may just be looking for a bargain, or simply want someone to recycle our unwanted things. It may not matter at times if a business exists to make money or support a cause. But when it does matter, you have a right to know. When in doubt, check it out!