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Deceptive Solicitation Prevention

By Richard M. Weintraub, Esq.

National Sheriffs' Association General Council

The following are recommendations by the National Fraud Center (a tax-free consumer organization) and the National Association of Attorneys General to communicate to the public on stopping deceptive solicitation practices.

I. Preventing Deceptive Charitable Solicitations

Charitable organizations in over 38 states that solicit donations from the public are required to be registered with the attorney general or office of the secretary of state of each state (i.e. State Charitable Organization Division) if:

• They collect $25,000 or more in direct public support,
• Engage the services of anyone (3rd party) to raise funds for that organization, or
• Pay salaries or benefits to a member or officer of that organization.

In addition, in many states, those charities NOT required to complete a full registration statement ARE required to file a simple fund-raising notice. This registration requirement, however, does not imply endorsement of these organizations/charities by a state.

II. "Know Who" You Are Giving Contributions To And "Why" You Are Being Solicited

Most state charitable organization divisions maintain a master list of their state-registered charities/organizations. Each state office can provide information about the specific purpose of the charity, the amount of money the charity is raising, the percentage of the money collected which is used for charitable program services, and the percentage which is used for the organization's administrative costs and fund-raising.

III. Questions To Ask When Solicited By Phone

Unless citizens are already familiar with and support a specific organization, the public should not promise to contribute to an organization's cause when solicited over the phone. Those on the receiving end of the phone solicitation should specifically ask:

• What is the full name, address and phone number of the charity? Is this a tax-deductible, non-profit, public charity exempt from taxation by the Internal Revenue Service and under §501(c)(3) as a public charity?
• Do you work for the charity or are you a paid fund-raiser?
• For what specific purpose will my contribution be used?
• Is my contribution "tax deductible?"
• Is the charity (and paid fund-raiser, if one is used) registered with my state's charitable/solicitation authority?
• What percentage of its total income does the organization spend on its charitable purpose?

IV. Questions to Ask When Examining Any Written Solicitations

• Is the full name, address, and phone number of the organization disclosed in the material?
• What will my contribution be used for?
• Does (or will) the organization offer to send me a copy of its financial statement (s)?
• Does the solicitation disclose that documents and information are available from my state's charitable organization division for the cost of copies and postage?
• Is the organization's appeal for contributions written in a way that appeals only to my emotions rather than to my intellect as well?
• Does the organization's appeal sound feasible or plausible (what is it for and for whom)?

V. Disclosure of Organization's Financial Statement

All donors are entitled by law to receive a copy of a financial statement from charities which are registered with each state's charitable organization division and/or from the IRS. Written solicitations must include a disclosure that a financial statement is available upon request and must provide the full name, address, and telephone number of the tax-exempt charity.
Registered charities in each state are required by law to provide a copy of its financial statement to any person who requests one. This request must be answered within 30 days and no charge can be made by requesting this public information.

VI. Deceptive Practices

Some charitable solicitations send urgent messages or "red flags," which might lead a person to question whether this is an organization worthy of support or even whether it's really an exempt charity:

• Did the organization refuse to send you written material or financial information you requested?
• Did the person soliciting offer to send a courier to collect your pledge/contribution?
• Did the charity send you a written invoice or statement which indicates a payment due for a contribution you never pledged?
• Does the organization's name and logo closely resemble or sound like another "legitimate" charity with a similar charitable purpose?

VII. Donors Have Rights/Remedies

A donor has the right to ask as many questions as necessary to make an informed decision. Additionally, donors have the right to change their mind after having agreed to make a donation. A pledge to make a contribution is not a legally enforceable agreement.

VIII. To Have Your Name Removed From a Solicitation List

Donors who would like their name removed from approximately 80 percent of all national solicitation lists should write to: Mail Preference Service, Direct Marketing Association, Inc., P.O. Box 9014, Farmingdale, NY 11735-9014. Include your name, address, and telephone number.

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National Sheriffs' Association
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Alexandria, Virginia 22314-3490
703-836-7827

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