Season to scam

Published 8:00 pm Saturday, December 19, 2009

The Virginia Department of Agriculture and Consumer Services recently cautioned Virginia residents against donating to the Wishing Well Foundation USA, Inc.

The Louisiana-based charity had solicited contributions from Virginians for allegedly charitable purposes, but had not filed with the consumer services department as required by law, said Elaine Lidholm, director of communication for the department.

The charity, whose mission purportedly is to grant the wishes of terminally ill children, has a rating of zero stars on a scale of zero to four from CharityNavigator.org, a charity watchdog site. Only about 13 percent of the charity’s income actually helps children — about 8 percent is spent on administrative expenses, and a whopping 78 percent is paid to professional fundraisers, according to the Web site.

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The supposed charity displays many of the hallmarks of bogus or disreputable charities, Lidholm said — cold calls, a “sound-alike” name to a legitimate charity and an extremely high percentage of income going to professional fundraisers.

The holiday season is a particularly bad time for consumers trying to navigate the waters of charitable giving, Lidholm said.

“It gives them an automatic hook,” Lidholm said. “They say, ‘The children aren’t going to have a good Christmas if you don’t give.’”

The exploitation of the holiday is especially unfortunate this year, as so many legitimate charities are seeing donations drop and demand for their services rise.

“That makes it even more important for people to make sure their money is going for the purpose they intend it to,” Lidholm said.

Lidholm offered a variety of tips for ensuring donations go to legitimate charities that will use them for the intended purpose.

“When people get a cold call asking to donate to charity, it may be perfectly legitimate,” Lidholm said. “That’s one to be particularly careful about — generally, if you pick up and call a charity, you at least know you’re getting the group you think you’re getting.”

Lidholm said many bogus charities will use names that mimic those of reputable, well-established charities, believing that people will not pay attention.

“Listen to the name,” Lidholm said. “The American Heart Association is a legitimate organization, but you might get the American Heart Organization or the American Heart something else that sounds like it.”

Two things happen when giving to a bogus charity, Lidholm said — a person’s money is wasted, and personal information is in the hands of less than reputable organizations.

“You never want to give out personal information to anyone who contacts you, whether they’re saying they’re your bank, a charity or whatever.”

While some charities are completely bogus, others do some actual charity work but spend far more of their donations lining executives’ and fundraisers’ pockets.

“It pays to do some research,” Lidholm said. “Request some information. Check and see if an organization is registered to do charitable solicitation in Virginia.”

Many legitimate and illegitimate charities use professional fundraisers. However, fundraisers often keep a majority of the money, forwarding only a small portion to the actual charity. In addition, Lidholm said, donors should pay attention to the percentage of administrative overhead.

“Obviously, they’re going to have overhead costs,” Lidholm said. She recommended a benchmark of 15 percent — any higher amount going to administration and overhead costs should be viewed with caution.

“Know how much of your gift will go to people who actually need it,” Lidholm said.

People who want to do more research on charities can visit www.vdacs.virginia.gov/consumers, or a number of watchdog sites such as www.Guidestar.org.