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Investigate before you donate: What you don’t know about charities

Photo Credit: Cliffview Pilot

CLIFFVIEW PILOT HAS IT FIRST: Before you give to any charity: Check with the New Jersey Division of Community Affairs, which has done the legwork on how these organizations spend money.

Did you know that the AARP Foundation plows 90% of its expense account directly into free programs for those 50 and older, while other supposedly charitable organizations use a much larger chunk for their own salaries and other management-related expenses?

The Veterans Support Foundation , of Silver Spring, MD, dedicated a sizable 81.2% of its $551,000 expense budget last fiscal year to charitable programs, coming in second behind AARP .

The Wounded Warrior Project also has distinguished itself by putting nearly 65% of the $35 million it spent last fiscal year to charitable programs. Fundraising expenses: 28.3%. Salaries and other costs: A measly 7.7%.

The project’s practices are literally right on the money, according to the Better Business Bureau’s “ Standards for Charity Accountability .” The BBB says a charity should dedicate at least 65% of its expenses toward program activities, and no more than 35% toward fundraising, salaries and benefits.

“Potential donors are often completely unaware that certain charities spend 80% of their donations on nothing but fundraising, while others spend nearly every cent on actual charitable programs,” DCA Director Thomas R. Calcagni said.

“Before consumers donate their hard-earned dollars to a cause, they should know exactly how the charity in question will use their money,” Calcagni said.

So his staff has produced a list of the 10 charities most asked about by consumers who call the division’s hotline. You can find them and other information here: DCA Charity List

The Paralyzed Veterans of America , based in Washington, DC, dedicated 60% of its $111 million in expenses last fiscal year toward charitable causes. Its management and other costs: 8.2%. Only 15% of $10 million spent for the National September 11 Memorial Museum at the World Trade Center went to salaries and general costs last year, the DCA found. $5.4 million went directly to the project.

Ranking even higher was the USO ( United Service Organization ), of Arlington, VA.  Total expenses for the fiscal year were $175 million, of which $138.7 million went directly to charitable programs. Management and general expenses? $12.6 million (7.2%).

Others who cracked “New Jersey’s Top 10 Most Inquired-About Charities” include the American Parkinson Disease Association , of Staten Island: Of its $10 million in expenses, charitable programs got nearly $7 million.

The Humane Society was equally impressive, spending only $4.5 million of its $123 million in expenses on salaries and related costs. Minus fundraising costs, the society put $94.7 million toward helping others.

Some of the DCA’s donating tips:

  • Find out whether the charity is registered in New Jersey, or is exempt from having to register (Certain religious and educational organizations, and charities whose annual income includes less than $10,000 in public contributions and fundraising, are exempt from having to register with the state).
  • Find out how much the charity spent during recent fiscal years on program costs, management costs, and fundraising.
  • Learn about the charity’s stated mission.
  • Don’t hesitate to ask the charity for all of that information. If you’re rejected, check the DCA’s charity page.

Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file a complaint with the State Division of Consumer Affairs by visiting its website: NJDCA , or by calling 1-800-242-5846 (toll free within New Jersey) or 973-504-6200.

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