You want to help those who are less fortunate. That's good. And you're not alone. According to the American Association of Fund-Raising Counsel, giving in the U.S. by individuals rose to $135 billion in 1998.

But at the same time you want to make sure that your gift actually helps those in need. It's no surprise that there are scam artists imitating charities in an effort to get your money. So how can you make sure that your contribution goes to a worthy cause?

It takes a little effort. You'll need to check out the charitable organization. One source of information is the National Charities Information Bureau. It's a non-profit organization that collects and reports on charities. They offer a free sample of the "Wise Giving Guide". Just call 1-212-929-6300 or write them at:

NCIB
19 Union Square West
New York, NY 10003

Or you can visit their website at http://www.give.org

You may also choose to contact the charity yourself. In that case ask for a copy of IRS Form 990, their annual report, a statement of functional expenses and a budget for the coming year. When you contact them ask some questions. For instance, do they hope to find a cure for cancer or are they providing care for those who suffer from cancer. Will they have scientists on their staff doing the research or will they be providing funding for a separate organization that's doing the scientific work? Basically find out what they hope to accomplish and how they plan on doing it.

Make sure that the organization is really who you think they are. Some states allow names that can cause confusion. And some scam artists don't mind breaking laws that prohibit sound-alike names. This is particularly important when you're giving to a charity that's trying to respond quickly to a natural disaster like a tornado, hurricane or earthquake. You won't be able to count on seeing logos that you've known since childhood.

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Begin with IRS Form 990. It's not that hard to pull useful info from the form. Any charity that collects over $25,000 and is not controlled by a church or religious organization is required to submit a Form 990 to the IRS. Charities are required by law to make the form available to you. If they won't give you a copy, you'll probably want to give your time and money to some other organization. If you're checking out a religious charity use the annual report for financial info.

Find out where the organization spends the money that's entrusted to it. On lines 13 to 16 of Form 990 you'll find out how much goes where. Look at the 'program activities' section. As a general rule, you'll want at least 60% of the expenses to be used for 'program service expenses'. That's the money that actually goes to help people. Many charities make an effort to get this figure to 80% or more.

'Fund raising' shouldn't consume more than 30% of the money raised. Some
organizations have great names, but are little more than a way to earn large salaries or commissions for raising funds. They'll claim that they're raising money for handicapped children or disaster relief. Who wouldn't want to help? But if highly paid fund raisers get most of the money you're not really helping hurricane victims.

'Management and general' expenses cover the cost of accounting and legal services, insurance and maintaining an office. In most cases this should be less than 20% of the total expenses.

One warning about using Form 990 to evaluate expenses. Some charities receive donated materials and services. The IRS doesn't allow the value of such donations to be included in Form 990. Suppose a bakery donated $1000 in bread to a homeless shelter. Obviously $1000 in cash is saved by the shelter. But both the amount of money raised and the money spend on programs would be understated by $1000. That makes the percentage spent on fundraising and management go up.

To find a more detailed explanation of expenses go to Part II of Form 990. It'll give you an idea of how much money goes to salaries, travel, phone, etc.

Who's running the show is also important. Part V of Form 990 will list the officers, board members and key employees. You'll want to check out the salaries. Don't be automatically alarmed if some of the top employees make $100,000 or more. Remember that it takes a lot of skill to run a national organization. It's similar to running a business. And in a time when CEO's are making $1 million plus, it might mean that an organization has to offer more to attract qualified employees. Of course, some people who run charitable organizations choose to do it for little or no pay. You'll need to decide for yourself if the salaries seem excessive.

There are other clues that a charity might be less than honest. Some danger signs include emotional, high pressure phone solicitations; a refusal to send written info on the organization, or telling you that you've won a prize from the charity. Common sense applies. Organizations that are ethical are willing to wait and won't push you to make a decision. They're willing to have you look at their records because they have nothing to hide.

Don't give cash to charities. A check made out to the organization is much more likely to reach it's goal. Only give your credit card number to charities that you've worked with in the past and that have earned your trust.

A charity may call or write and say that you've made a pledge and they haven't received it. If you don't remember making the pledge don't feel obligated to honor it. There's a good chance that you never promised them anything.

The urge to help others is one of the noblest human desires. But falling victim to a scam cheats not only you, but the people you're trying to help.