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It's that time of year when it seems like everyone and their brother has their hand out for charitable donations. Now I've got nothing against supporting charities - I support several of them myself. But I am against supporting professional fund raisers instead of charities.

TMF recoginzes this as well in it's annual Foolanthropy campaign. You can read more about it here: http://www.fool.com/foolanthropy/2002/Foolanthropy021126.htm

So what's to know about the leeches (oops, I mean organizations) that raise money for charities and then keep a cut for themselves? Here's what the California Attorney General has to say: http://caag.state.ca.us/cfr/index.htm
Historically, use of a commercial fund-raiser has meant higher costs for a charity. According to reports filed with the Attorney General, only about one-third of the total dollars collected by the commercial fund-raisers in California actually go to charities.

Yet what they do remains legal.

You can look at some actual reports to see for yourself. On that link to the California AG above, click on "search CFR database" - its on the left side. You'll get a screen to enter the name of either the charity or the fund raiser. Pick out your favorite charity, or just enter a random letter of the alphabet to peruse a few reports. Just beware - you might be surprised at what you find.

If you really want to get into this, you might try looking at your own state's information. I happen to live in the Golden State, so that's why there are California links above.

Personally, I think some of the worst offenders are auto donation programs. The vehicles you donate probably go to a fund-raiser who sells them at wholesale. And a surprising number of cars just go straight to a junkyard for $50 or $100. The charity gets just a fraction of the retail value of the car.

At some point I expect the IRS to start intervening in this situation. Some - perhaps too many - taxpayers are pushing the envelope by claiming a FMV for their donation that they could never get selling the car.

I've rattled on enough. I guess my point is this: Check out the fund-raiser before donating through them. Consider selling your old car and donating the proceeds. And don't inflate the value of a car you donate. You're hurting all of us that way. (That's three points, isn't it - oh well.)

Give smart.

--Peter
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