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Attorney General Lockyer Urges Donors and Charities to Make Informed Fund-Raising Decisions

Public Education Effort Part of National 'Operation Phoney Philanthropy'
Tuesday, May 20, 2003
Contact: (415) 703-5837

(SACRAMENTO) – Attorney General Bill Lockyer, as part of the nationwide "Operation Phoney Philanthropy," today urged donors to take steps to avoid becoming victims of fraudulent charitable solicitations, and called on charities to wield increased care and knowledge in hiring commercial fund-raisers.

"Californians are among the most generous people in the nation when it comes to charitable donations," said Lockyer. "Unfortunately, con artists too often take advantage of that kindness to defraud donors and deprive charitable causes of needed support. By participating in this federal-state partnership, my office aims to benefit worthy programs by helping donors and charities make wiser decisions."

Operation Phoney Philanthropy is a joint effort launched today by the Federal Trade Commission (FTC) and charitable trust regulators in 33 states. The main objective is to fight fraud, and unnecessary drains on charities' resources, through law enforcement and public education.

Lockyer offered the following tips to help donors avoid and prevent fraud:

Get as many facts as possible about the solicitor and charity. Commercial fund-raisers and charities are required to register and file financial statements with the Attorney General's Office. Registration and financial reports can be found at the Attorney General's web site, http://www.ag.ca.gov/charities .

Don't be fooled by names that sound impressive, or closely resemble names of familiar organizations or public agencies.

Never give cash, and never give solicitors a credit card number. Make checks out to the charity, not the solicitor.

Ask how much of the donation will go to the charity. If asked, solicitors are required by law to provide that information. The law also requires solicitors to inform prospective donors if they are getting paid to ask for contributions.

If a solicitor says the charity supports local groups, call the organizations to verify the claim.

Lockyer also stressed the importance of charities using proper care and research before hiring a commercial fund-raiser. Just yesterday, Lockyer released a report for the year ending 2001 that showed the average charitable donation campaign run by commercial fund-raisers provided just 38 percent of the contributions to the charity. Additionally, 110 of 420 campaigns netted 15 percent or less of the donations to the charity.

Annual commercial fund-raising reports are among the educational tools available to charities on the Attorney General's web site. Another useful guide is a model contract that highlights key issues charities should address when hiring commercial fund-raisers. These and other materials can be found at http://www.ag.ca.gov/charities/publications.htm .

Charities also should follow these rules before and after hiring a commercial fund-raiser:

Check out the Attorney General's web site to find out if a fund-raiser is registered and bonded, as required by law.

Obtain bids and interview candidates.

Ask for references, then contact the references and ask them about their experience with the fund-raiser.

Closely monitor the campaign's financial operations and get copies of original invoices as received, receipts as paid, bank statements, checks and deposit slips.

These hints, as well as other educational material for donors and charities, are contained in FTC publications available at the Commission's web site,http://www.ftc.gov/charityfraud. The Attorney General's web site, at http://www.ag.ca.gov/charities , also has useful information for donors, including frequently asked questions (and answers) about charitable organizations and solicitations, and applicable laws and regulations.

Lockyer urged donors and charities who suspect fraud or other unlawful activity to write the Registry of Charitable Trusts, P.O. Box 903447, Sacramento, CA 94203-4470, or file a complaint online by going to http://www.ag.ca.gov/charities then clicking on Contact the Registrar.

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