Where do your charitable gifts go? State has lowdown on nonprofits

ashain@thestate.comNovember 25, 2013 


  • Know before giving your dough

    • Ask a charity where it is located. Get a street address. (A post office box is a red flag.) Ask for a phone number so you can call.

    • Ask if a charity is registered with the S.C. Secretary of State’s office, as required by law. Then check for yourself online at scsos.com or call (888) 242-7484.

    • Ask what percentage of contributions go to the charitable purpose. The minimum for an effective nonprofit is 65 percent.

    • Never give your credit card or bank information over the phone or web before you have taken time to check the charity. Ask them to send a letter so you can mail a donation – and give you some time for research.

    SOURCES: S.C. Secretary of State; staff research

Tis the season to be giving to charities – carefully.

South Carolina regulators say tight economic times lead to an increase in less-than-giving nonprofits aiming to scoop a few bucks from holiday do-gooders.

“They know more people are in need,” said S.C. Secretary of State Mark Hammond, whose office oversees more than 8,000 registered charities. “And we get so many solicitations in South Carolina because we’re so generous.”

South Carolina ranks fifth in the country in the percentage of discretionary income donated to charity, according to an analysis of IRS data by The Chronicle of Philanthropy.

Many charities do the right things.

Three out of the four of the 6,350 charities that must file contribution data with the state spend 65 percent or more of their donations – considered the standard for well-performing nonprofits – on their program goals, the Secretary of State’s office said.

But that means more than 1,650 charities registered with the state fail to follow the guidelines for how much of the cash should go to pay salaries and other fundraising expenses.

“Donors need to do some research,” Hammond said.

The Secretary of the State’s website lists the percentage of a charity’s contributions goes to its programming. But folks getting the calls, emails and letters can help find charities that fail to follow state law by not registering.

“The donors are our eyes and ears out there,” Hammond said.

The state settled recently with the Veterans Support Organization for not registering its solicitors and misrepresenting how much money went to programming. The nonprofit agreed to a 15-year ban on soliciting in South Carolina and a $5,000 fine.

The Secretary of State’s office helps donors spot a few of the good charities from the bad ones with its annual Angels and Scrooges list, the latest of which was released last week.

The Angels included Big Brothers Big Sisters of Greater Columbia, which gives more than 85 percent of the money it raises to programming. Others noted included Camp Pee Dee Pride in Florence (96.6 percent to programming), Healthy Smiles of Spartanburg (83.1 percent) and Navy-Marine Corps Relief Society in Parris Island (88.3 percent).

The Scrooges included some groups with names that could win over sympathetic donors: Breast Cancer Survivors Foundation of Aventura, Fla. (19.3 percent); Firefighters Charitable Foundation of Farmingdale, N.Y. (7 percent); and Law Enforcement Officers Relief Fund of Sarasota, Fla. (0.9 percent).

A pair of S.C. nonprofits made the Scrooge list because their related bingo operations are so costly – Gaffney Elks Lodge #1305 (11.9 percent) and American Legion Post 215 in Columbia (3.2 percent).

Bingo operators must partner with a nonprofit to operate in the state, the S.C. Department of Revenue said. The charities get 26 percent of the taxes on bingo cards and make deals to receive a portion of money made from operations.

The bingo operation in Sumter associated with American Legion Post 215 generated $1.3 million in revenue from Oct. 1, 2012 to Sept. 30, 2013, according to documents filed with the Secretary of State’s office.

But the Post got just $11,738 from its arrangement with the company, Aiken Bingo, in the past year after the promoter gave $892,000 in prize payouts and paid $415,500 in business expenses.

Aiken Bingo president Donivon Glassburn said the Sumter bingo hall is one of the poorest performing among the company’s 19 operations in the state: “It’s a high cost business.”

American Legion Post 215 reported that $2,832 went to programming after spending $89,410 on expenses – more than half of which was spent on management, according to the tax documents.

Post finance officer Johnny Gaines said he plans to talk to the bingo promoter about getting a better deal. He said the American Legion Post is earning just enough money to keep operations afloat

As for making the state’s Scrooge list, Gaines said, “It’s kind of embarrassing.”

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