As holiday season draws closer, charities prepare for the end-of-the year push to fatten their coffers with tax deductible donations. Animal charities join the rush; they send packets offering greeting cards and other merchandise accompanied by letters and photos highlighting unspeakable cruelties that can be corrected only by donating to their organization. The pictures sway the hearts and minds, but dog owners need more than images to help determine where their charity dollars are best spent.
Animal charities run the gamut from animal welfare to animal rights and include organizations that place service dogs with handicapped owners and groups that use the human/animal bond to bring love and trust to people in nursing homes, prisons, and juvenile detention centers. And they all want a share of the dog owner's holiday budget.
The Council of Better Business Bureaus Philanthropic Advisory Service and the National Charities Information Bureau can help. These charity watchdogs have established guidelines that help determine where the money goes. Although all animal charities are not rated by these services, the guidelines can help dog owners make an informed choice of where to donate.
The Philanthropic Advisory Service has 22 guidelines divided into five areas: public accountability for use of donated funds; disbursement of the funds; integrity of the solicitation materials; fund-raising practices; and the governing structure of the organization. Organizations must provide detailed financial records of fund-raising costs and disbursements so that donors can clearly see where the money is spent. In particular, they must provide information that shows allocation of funds to programs and activities claimed in annual reports, fund-raising literature, and other materials.
PAS requires that at least 50 percent of all income be spent on programs and activities directly related to the organization's purpose; at least 50 percent of public contributions be spent on programs and activities described in fund-raising solicitations; fund-raising costs do not exceed 35 percent; and total fund-raising and administrative costs do not exceed 50 percent of total income.
PAS also requires that solicitations contain a clear description of the programs and activities for which the funds will be used. According to the guidelines: “Solicitations which describe an issue, problem, need, or event, but which do not clearly describe the programs or activities for which funds are requested will not meet this standard.” For example, solicitation of donations to reduce the number of dogs in shelters must contain information about the programs that will be conducted to reach the goal, i.e., funding low-cost spay and neuter clinics; providing animal welfare education to the community; establishing a foster care program or an obedience program to make dogs more adoptable; buying a van to serve as a mobile adoption center, etc.
Finally, PAS requires that the organization have an active board that oversees its policies. In addition, an organization must not pay more than 20 percent of the members of its board or executive committee either by salary or gifts or with benefits unrelated to their duties.
NCIB has a similar list of guidelines divided into nine standards: Board governance, organization purpose, programs, information, financial support and related activities, use of funds, annual reporting, accountability, and budget. It requires that at least 60 percent of annual expenses are for programs and looks at the long-term solvency of the organization.
Potential donors can receive reports on the organizations examined by these watchdog groups and contact the charities directly for copies of income tax filings for a particular year or years. Solicitations must include the names of states where the charity is registered; a call to the charities division in the attorney general's office in each of those states may also yield information that will help in decision-making.
The standards promulgated and applied by NCIB and PAS cover national charities, not local ones. However, dog owners have opportunities to visit local animal welfare organizations to see how shelters are operated, talk about funding needs, and even to volunteer to make sure the organization's practices carry out the stated policies. In addition, like the national animal charities, local charities that have tax-exempt status with the federal government are required to provide copies of their income tax forms on request. These forms give a general picture of the financial health of the organization, the salaries paid to upper-level employees, the investments and other assets owned, the results of fund-raising efforts, and other sources of income.
Potential donors can also contact their local Better Business Bureau and the charities division of their state attorney general's office when investigating an organization to receive donations.
Many charities depend on emotional appeals to loosen a donor's grip on his checkbook. PAS advises donors to “Beware of appeals that bring tears to your eyes but tell you nothing of the charity or what it's doing about the problem it describes so well.” Charities also present their cases in a manner most likely to get donations; donors should be aware that some appeals may not be based on the latest facts available. For example, some animal charities decry pet overpopulation, claiming that 12 or even 18 or 20 million dogs and cats die in shelters each year and urging people to send money to change this deplorable situation. However, the latest figures indicate that the number of pet deaths in shelters is closer to five or six million and that many of those animals are euthanized at owner request or because they are too old, aggressive, or sick to be adopted.
PAS reminds donors that tax exempt doesn't always mean tax deductible. Each solicitation should give the tax status of the organization. Those approved by the IRS as tax exempt under Section 501 (c) (3) of the Internal Revenue Code qualify for tax deductible donations. Organizations to prevent cruelty to animals are eligible for this designation if they file the appropriate paperwork with IRS.
Donations to organizations approved under IRC Section 501 (c) (4) and Section 501 (c) (6) are not tax deductible (except possibly as a business expense) even though the organizations are tax exempt.
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