Don’t get taken in season of giving: Experts urge care in choice of charity

For-profit donation bins are required to have labeling that states the purpose of the bin and that donations could be sold for a profit. (photo by Jesse A. Millard)

For-profit donation bins are required to have labeling that states the purpose of the bin and that donations could be sold for a profit. (photo by Jesse A. Millard)

With the holidays here, people may want to spread the season’s cheer by donating to local charities and donation bins.

But donors should be wary of bins run by for-profit outfits where it may be unclear what portion of the proceeds from donated items go to charity, said Kristen Merrifield, CEO at the Alliance of Arizona Nonprofits.

Charities see many donations at this time of year, with a Guidestar survey of nonprofits finding half of surveyed organizations reported getting a majority of their contributions from October to December.

Arizona Attorney General Mark Brnovich issued tips on how to spot fake charity donation bins. His office said donors should know most items given to for-profit donation bins do not go to charitable organizations.

“We want consumers to be educated and I encourage every person to do a little bit of homework before donating to make sure their donation is getting into the hands of the people who truly need it most,” Mr. Brnovich said.

One problem with for-profit donation bins is that it can be difficult to tell how much the company is giving to charity, Ms. Merrifield said. It could be pennies per pound of clothing, or just a small check.

“That again causes confusion with the public thinking that I’m giving this, and it’s going to help a homeless person that doesn’t have any clothes,” Ms. Merrifield said. “Again, it’s making sure (donors) understand where their donation is going.”

Donors are encouraged to research the organization they’re giving to, read the fine print, check charity-tracking websites such as Charity Watch and Charity Navigator and make donations in person, Ms. Merrifield said.

Charity-tracking sites tell the viewer how much a certain charity gives to the cause it works for, she said.

Also, check for contact information on the donation bin, and ask questions to learn about the organization, she said.

Items given to for-profit donation bins may be sold for a profit to local thrift stores, or sent overseas to get processed, said Ryan Anderson, spokesman at the Attorney General’s Office.

“There isn’t an official registry, but it’s safe to assume there are hundreds, if not thousands, of these (for-profit) donation bins in Maricopa County,” Mr. Anderson said.

For-profit bins pop up in parking lots, usually around bins from more well known charities that do donate their proceeds, he said. Some of the for-profit donation bins “pull heart-strings” stating the goods or proceeds will go to veterans or children, he said.

“A lot of folks don’t either, A: do their research ahead of time, or B: don’t see that it’s for-profit,” Mr. Anderson said.

He said for-profit companies are allowed to set up donation bins, as long as they have clear and conspicuous labeling stating the name of the company, and that donated items are sold by that company with a portion of proceeds benefiting a charity.

The language isn’t always put in an obvious spot on the bin, said Mr. Anderson, who encouraged people to report any donation bins that do not state the information clearly, or bin with misleading information on their sides.

Arizona law defines a charitable organization as a person or organization exempt as a 501(c)(3), or an establishment that uses a charitable appeal as the basis of solicitation.

Jim Kaiser, CEO and co-founder of Charity Recycling Solutions, a company that has for-profit bins around the Valley, said for-profit bins always get a “black eye” whenever they’re discussed in the media.

Not all for-profit bins are bad, he said, but there definitely are some that aren’t as charitable as they say. Mr. Kaiser said his company donates about 10 percent of its gross income to its charities, such as Huruma Village, an amount he claimed is equal to some non-profits.

He stresses that people who are looking to donate this holiday season do their research on sites like GuideStar to see how much the nonprofit gives to its intended cause. Mr. Kaiser welcomes transparency and oversight at his company and at nonprofits.

“Everyone should look into the nonprofit as well,” he said. “Everybody needs to be looked at.”

His donation bins advertise that they help Huruma Village, and he says he donates an average of $1,500 a month to that charity alone.

Mr. Kaiser said ordinances in cities such as Phoenix, Surprise and Goodyear forced him to remove a lot of his bins in the Valley, because of the new high cost of having to have a permit for his bins.

He also spends as much as $300 to have his bins take up a parking space at businesses.

Ms. Merrifield agrees with ordinances that make sure the for-profit donation bins clearly state what they’re doing.

“I’m not sure there necessarily has to be a law, but I think it needs to maybe be policed a little more closely, and create some additional avenues to inform the public,” she said.

The holiday season is a busy time for charities such as St. Vincent De Paul. Families struggle to pay for presents and large holiday dinners, said Mary Chou-Thompson, director of marketing at St. Vincent De Paul.

“Over the holiday season we get a lot more calls from people needing food on the table,” Ms. Chou-Thompson said.

St. Vincent De Paul hasn’t had any instances with for-profit bins, she said, but she stresses the importance of calling and connecting with a charity before giving.

Because St. Vincent De Paul has been around for so long, it’s well trusted because of its transparency, she said.

“People should feel free to contact the organization that they want to donate to, to find out more about what they do and where the dollars go,” she said.

For-profit donation bins aren’t the only things that may be guiding well-intended donations away from those who are in need.

During the holidays, the Arizona chapter of the Better Business Bureau sees an uptick of fake charity scams, usually targeting the elderly, said Myriam Cruz, director of community relations at BBB.

Elderly receive many solicitations from telemarketers asking for donations to a particular charity, she said. Donors usually don’t find out they were scammed until they see extra charges on their credit cards, Ms. Cruz said.

There are many ways to find out if the charity on the other end of the phone is a scam, she said. If the telemarketer asking for donations gives you a hard time, Ms. Cruz said, saying they need the money now, or only take cash, those are red flags.

“Real charities need the money today, and tomorrow, they’re always in need,” she said.

And if the caller gives vague answers to any of your questions, or can’t tell you about the charity’s mission, it could be a scammer too, she said.

The Better Business Bureau has a scam tracker on its site anyone can use to see scams that are happening in real time, both locally and nationally, Ms. Cruz said.

So, far only two fake charity scams have been reported in Arizona this year, according to its scam tracker.

Recently the BBB released a statement warning holiday shoppers about a gift card scam circulating on the Internet. It warns that shoppers searching on sites for expensive electronics at cheaper rates are prompted to buy an Amazon gift card and use that to pay for the item as they’re checking out.

BBB warns from purchasing an item this way, because it’s untraceable and the item will never show up.

Tips for giving to charity:

  • Research the name of the charity organization you intend to give to; make sure donated goods aren’t sold for profit, and pay close attention to the name.
  • Find out how much of the donation goes to its cause at sites like Better Business Bureau, Charity Watch, Guidestar and Charity Navigator.
  • Check the charity’s tax forms on its web to see if it’s an organization you want to give to. The forms show how much a charity donates from what it received for the year.
  • Ask for a tax receipt when donating.
  • Before donating, contact the organization, and make sure it is legitimate. And make sure contact information is easily available on the charity website, or donation bins.

Shopping Tips:

  • Be wary of items that have “too good to be true” prices.
  • Watch out from dealers and sellers who don’t accept credit card.
  • Make sure the website is secure.
  • Don’t get pressured by the salesperson. Make sure to take your time thinking about the purchase.
  • Check for authentic contact information.

Jesse A. Millard is a student reporter with the Cronkite News.

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