Charity or scam? 

Stuart Sobel has been called “the guru of giving.” Sobel is the outspoken host of a weekly radio program on 88.7 WICR called Wise Choices: Taxes and Charity that airs Saturday mornings at 10:30 a.m. A 30-year veteran of the IRS, Sobel has taught at the University of Illinois, the University of Ohio and IUPUI. He serves on a variety of boards and advises international organizations on developing strategies and reaching goals.  

NUVO: How can we distinguish between legitimate charities and scams?

Sobel: Here is where America is way behind the rest of the world. In a country like Great Britain, you have what they call the Charity Commission, an organization that provides oversight for the charitable sector. In the United States … no one provides oversight. So the problem is that because of this lack of oversight what we’ve seen is a proliferation of people and organizations that really don’t exist for the benefit of society, but for their own personal enrichment under the guise of charity.

Recent natural disasters like the tsunami in Southeast Asia and Hurricane Katrina seem to have intensified the climate for charitable giving.

Sobel: People are becoming more sophisticated in appealing to your emotions and people are giving unwisely. They don’t check out a charity. They spend more time checking out rides at Disney World than they do the charities they cut checks to. I try to teach people to slow down a little bit. Check out a charity before you give them a check. There’s a wealth of information but you have to find out about it.

NUVO: Do crises invite abuses?

Sobel: One interesting abuse concerns the Sept. 11 memorial. Here was a horrific experience in New York. People felt we have to recognize, we have to recognize. So what have they done? They plan on raising $1 billion for the memorial — $330,000 per person that died. The problem is we have a world where children are dying. We set up tax benefits for Hurricane Katrina, but in New England they just had flooding. We had flooding in Indiana. Our emotions are played on and we give, but there is not an endless amount of money.

NUVO: Where can people go to learn more about charities that solicit them?

Sobel: You can check out the Internal Revenue Service at and check out or see if an organization’s a charity. If you go to, the Better Business Bureau, you will see if a group meets the charitable standards of that organization. Or call the charity. Ask them what their missions are. Don’t be afraid to ask for their financial statements. Don’t feel guilty in making an intelligent decision to give.

NUVO: Are there red flags you look for when you are being solicited?

Sobel: I refuse to give over the telephone. I refuse to donate to a charity that mails me something that isn’t mailed directly back to the offices of the charity because I want to see the charity get my money instead of a fund-raiser who gets a commission of 70 to 80 percent.

I don’t give to the United Way. Why? I don’t need someone deciding for me where I want my money to go. I’m intelligent enough to decide. I know where to give. You have to manage your giving portfolio better than you manage your investment portfolio. Don’t just donate to Goodwill because they advertise they have a little black dress. There’s a thrift store for AIDS, or the Salvation Army and Saint Vincent DePaul, there’s Hoosier Veterans. Don’t give to organizations just because they do national advertising.

NUVO: Does our society rely too much on philanthropy?

Sobel: I think we have to rely on philanthropy because government has a budget of $2 trillion but has a deficit that’s growing. We don’t have enough for a lot of programs so the only way a lot of organizations are going to survive in today’s society is through the kind of community charitable giving represents.

NUVO: You’ve railed about the high salaries paid to some nonprofit executives. Why?

Sobel: When money is given to a charity there are three categories of expenses: program services, administration and fund-raising. When money is given, I don’t want to see people getting rich. We’re not asking charity leaders to take a vow of poverty. What I want them to do is be reasonable.

If you look at when a million dollar salary is being paid to an executive, how many people with AIDS would be able to get the drugs they need for that? How many veterans coming home from Iraq will have the money they need to find a job? The point is there’s only so much money there. We have to be more candid and more credible in what we’re doing.

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