Settlement With United Children's Fund Permanently Bars Charity From Operating In New York
Attorney General Spitzer today announced an agreement with a Washington D.C.-based charity, the United Children's Fund (UCF), that permanently bars the charity from operating in New York. The charity raised funds for brochures and other information designed to raise public awareness about child safety.
Following complaints, Spitzer launched an investigation into UCF's practices in July of 1998 and found that the organization substantially misrepresented the percentage of its fundraising that actually supported its charitable purpose. UCF was also accused of using unregistered street solicitors to obtain donations from the public.
Investigators found that the United Children's Fund had raised about $4.79 million in New York between 1997 and 1999. Although the charity claimed that 50 percent of the monies raised went to program services, Sptizer found the real figure was only about four percent. Following the investigation, the charity ceased doing business in New York.
"My office's vital role in protecting the public trust requires that we closely examine how charities utilize the funds they raise and that we take the appropriate action when necessary," Spitzer said. "We will continue to monitor all fundraisers to ensure that public's good will is not abused."
By signing the agreement, UCF neither admitted nor denied any wrongdoing in the matter. The group will pay a fine of $85,000 to the Attorney General's office.
The case was handled by Assistant Attorney General Barbara Quint, under the supervision of Charities Bureau Chief William Josephson.
Spitzer's office provides the following tips to those considering making donations to charities:
- Find out what the charity will do with the money. Ask for information about its programs and ask for a copy of its financial report. Find out how much of your money will be used for charitable purposes.
- Be wary if the organization will not provide information about its program and finances upon request.
- Ask what portion of your gift actually goes to support the charity's program and what proportion goes to administrative costs.
- Consult the Attorney General's annual publication, "Pennies for Charities," which reports the amounts raised by charity telemarketers and the amounts actually received by the charities on whose behalf the telemarketers solicit contributions.
- Be careful of charities with names that sound impressive or resemble those of other organizations - some organizations use names similar to those of well known organizations in order to confuse donors.
- Be wary of emotional appeals that talk about problems but do not explain how money raised will be spent or what the programs of the organization are.
- Read mail solicitation literature carefully to make sure it identifies the charity and tells what will be done with your money. If it does not, call or write the fundraiser for financial information.
- Be careful of appeals asking you to return something such as a questionnaire or survey. Such devices may be used to divert your attention from the organization's program and how it will spend your money.
- Ask for identification if the solicitation is made in person.
- Make sure the donations are tax deductible. If you have any doubt, ask for that charity's IRS number.
- Don't fall for high pressure tactics of solicitations made over the phone. Ask for written materials containing information about the charity.
- If you decide to contribute, do not pay in cash, but instead pay by check.
- Make sure you get a receipt. If you donate more than $250 dollars, the charity must give you a receipt. Otherwise your contribution may be disallowed.
- If giving to a law enforcement group, keep in mind that some people take advantage of the public's concern and make fraudulent solicitations in the name of legitimate police groups. When asked to give to a police organization, contact your local police or other law enforcement agency to check on the identity and the legitimacy of the group asking for the contribution. Be wary of a solicitor who uses coercive or abusive tactics or who promises that your contribution will entitle you to better police protection or special privileges.
- Contact the Attorney General at (800) 771-7755 to report charities fraud or to check on the records of a charity or its fundraiser.