Monday, December 6, 2010

BBB Reminds Consumer to Check out Charities this Holiday Season before Giving

From Margie Tann iSekurity
Source: - Powered by bbbconsumeralert - Dec. 03, 2010

Have you recently received one of those plastic envelopes from Cell Phones for Soldiers, with the tag line "Help Our Troops Call Home!"? I received one, too, and wondered how that organization would actually use the phones: Would they sell them and make money to pay for the overseas calls by soldiers, install service on the phones and give them to a platoon, or give the soldiers the phones when theirs break?

For that matter, can soldiers carry cell phones when they are active military?

When I looked up the charity using the BBB Wise Giving Alliance (WGA), I found a report that said Cell Phones for Soldiers did not provide the requested information, therefore the WGA couldn't evaluate the charity.

I'm always a little suspect when a charity or business doesn't give information to be evaluated. So, I dug a little deeper. I checked Guidestar, which has a lot of 990s (an IRS tax form for charities) on file. The address on the plastic envelope I received is Dexter, Michigan, but the address on Guidestar is in Massachusetts.

The mission statement says "Organization raises funds to provide funds to pursue its mission as stated in its bylaws of providing aid to service men and women this is achieved by donations from the public of money and cell phones which are sold in a recycling program." (sic)

In 2008 the organization brought in more than $2.7 million in contributions and grants, of which $1.7 million was from cell phones. They spent $1 million on pre-paid calling cards (which we would assume they gave to soldiers) and report administrative and fund-raising expenses of less than $200,000.

I also wanted to check to be sure that the IRS had this charity on their list of organizations eligible to receive tax-deductible charitable contributions. They are listed, which means if you choose to donate to them, you can deduct the amount the cell phone is worth (not what you paid).

With a cell phone, you will want to use a search engine and see if you can determine the fair market value for the phone you are donating. You will also need documentation from the organization that they received the donation, including their name, date of the contribution, and an indication of what was given. (In the case of gifts-in-kind, as opposed to cash, most charities won't list a dollar amount on the receipt.)

If you aren't sure what donations can be deducted on your taxes, the Internal Revenue Service may be able to help you.

The BBB hopes that as you are deciding what charities to give your hard-earned money to this holiday season, you will use due diligence and check out every offer prior to donating. The BBB has charity standards, one of which is that the charity should spend at least 65% of its total expenses on program activities.

Happy Donating!

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