Is Your Money Going to Charity or Terror
In addition, many faith-based organizations are not required to file a 990, she said - a reflection of the principle of separation of church and state.
Other organizations may portray themselves as charities, but may not be eligible for tax-exempt status, or may choose not to seek the status, and therefore not be required to file a 990, she said.
Many states also require charities to have their financial statements audited by an outside observer, said Bennett Weiner, chief operating officer of the Better Business Bureau's Wise Giving Alliance, a national charity watchdog.
In New York, charities with revenues above $250,000 are required to have the audit, he said. Texas is one state where there is no audit requirement.
"At least in some cases it's possible that some of these problems may be found out by an auditor," Weiner said.
The Longer the Track,
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Potential donors should also ask for an annual report, Weiner said. "It's not required by law but it is generally the literature that includes the most detailed narrative of what the charity has done in the past year."
From an annual report, you can find out what the charity has accomplished, and get an idea of who's on their board, he said.
A charity's language can also clue you into its intentions, Coffman said. They should be specific with their goals and provide quantifiable results, she said.
A group that says their goals are to "feed the hungry" or "help suffering people" should inspire more caution than one that says it wants to expand the capacity of their soup kitchen or increase the number of coats they want to donate in specific numbers.
"The more information you ask for, the more of a track record a charity has to establish," Weiner said. It's possible to have one item to cover your tracks, it's another to have all the items and have them jibe with each other.
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