Not all non-profit organizations are charities

Just because an organization is "non-profit" does not imply that they are a charity. While all charities are non-profit, not all non-profits are charities.

To be sure, ask any charity for their letter of determination from the IRS. If the organization is legitimate, they will gladly show you a copy.

Here is some good advice taken from the California Attorney General's website:

Giving Wisely

Additional Resources:

Here are additional resources for wise charitable giving. Learn more about specific charities using the Attorney General’s Charities Search on their website. Click here to go to the Attorney General's Charity Search page.

The key to wise giving is being informed about a charitable organization before you write your check or donate your time. Here are some tips for giving wisely and additional resources to help guide you in making charitable donations.

•Be an informed giver. Ask questions before you give. Give only when you feel comfortable that your donation will support an organization and activities in which you believe. If a solicitor calls, find out how much of your donation will actually go to the charity.

•Refuse high-pressure appeals. Legitimate charities won't rush you to donate.

•Ask for written information. A legitimate charity will be willing to send you information before you donate. Ask for information on the organization's mission, how your donation will be used and proof that your contribution is tax deductible.

•Call the charity. To avoid falling victim to sham solicitors, contact the charity directly before giving a donation by mail or to the person knocking at your front door. This will allow you to make sure the solicitation you received is authorized and legitimate.

•Watch out for similar sounding names. Scam artists often try to take advantage of names that sound or look like those of respected, legitimate charities.

•Don't send cash. For your security and tax records, make your donation by check. Jot down the official name of the charity on your check for record keeping purposes.

•Be wary of a group that offers to pick up your monetary donation. A legitimate charity will have an official address where you can mail your donation. Be wary if an organization thanks you for a pledge you don't remember making and offers to send someone to pick up your donation. If ever in doubt, check your records for any pledge or donation.

•Fundraising appeals for police, firefighters and veterans. Solicitations on behalf of these types of causes often draw favorable responses from donors. If you would like to know more about such appeals, please consult the Attorney General’s brochure on Fundraising Appeals for Police, Firefighters and Veterans.

•Keep the right records. Make sure your donation is tax deductible from federal and state income taxes. Donating to some tax-exempt organizations may not necessarily result in a tax-deductible donation and some organizations may even try to use terms like "tax I.D. number" or "keep this receipt for your records" to suggest they are tax-exempt charities when they aren't. For record keeping, a canceled check or credit card statement generally is sufficient for IRS purposes when you donate less than $250. For larger donations, you will want to get properly worded receipt from the charity confirming your donation. And, remember, your tax deduction is reduced by the fair market value of any gift, meal or other incentive received from the charity.

•Consider alternative forms of giving. Consult with your tax advisor about the many ways to support a charity. These alternative forms of giving include charitable gift annuities, gifts in-kind, and endowments.

•Volunteer. Giving of your time and personal skills can be as valuable as financial donations to nonprofit organizations. You can also benefit by meeting people who have shared interests.

Many charities are legitimate, but some are not. Be sure you look beyond the compelling cause, find out if the "horror stories" or "success stories" that make you want to donate right away are just that, stories. Noticably absent in a sham charity are the credentials and qualifications for being a charity, or even a simple thing like a phone number or street address.

Pay close attention to the wording within a website that is vague or does not make sense. If there are phrases like "we operate with private funding" and references like "we work with a 501(c)3", they only imply legitimacy. Look out for an overemphasis that all money goes for the cause, but then a quick word like "except for" is added somewhere.

While it may be impossible to tell if claims and accomplishments are fabricated on a suspicious site, the best thing for anyone considering donating is to ask questions and be informed. Seems easy enough, but if you look and cannot even find a telephone number or mailing address, you should be cautious.

If you are still not sure, contact your local District Attorney, or the Attorney General.

Most charities work hard and are driven to further their cause, and most charities also depend on donations from generous donors to keep going. All it takes is an isolated incident to taint a donor with the fear of being duped by a scammer.

What exactly does 501(c)3 really mean?

When an organization is classified as a non profit charitable organization, they are a 501(c)3 charity. This is the best that can be done to assure you that your donations are being used for the stated purposes that you believe you are giving money for. Any other non profit status can mean that the use of the money you give is not restricted, and may end up being used for something you never intended.

In order for an organization to be classified as a charity, they must meet some qualifications set up by the IRS and have strict reporting procedures. In a nutshell, the organization makes promises to only do work for the cause stated, and that there is no distribution of profits to any members. That does not mean that a) the organization must lose money, or b) that everyone must be volunteer. The organziation is set up like any business, with goals, marketing, fund raising, and expenses.

Once the IRS is satisified that the organization is set up properly, with the proper mission statement, they will be sent a letter of determination. This is the document that every 501(c)3 will show you to confirm they are a chairty. The term 501(c)3 actually refers to the IRC (Internal Revenue Code)secton that defines a charity.

Additionally, in California all charities must register with the Attorney General. The purpose for this is to be sure the public is protected from operations that do not follow the rules for charities. Everyone that asks for a donation must be registered. The Attorney General also regulates things like raffles, which are limited to charities and a few specific types of groups.