New York City's Metropolitan Museum of Art, whose fundraising efforts once focused on major gifts for new exhibitions and additional space, now appeals to donors merely to support operations. As donations fall, the load on service charities is rising. Despite a 6 percent decline in contributions this year, the Salvation Army is juggling a fivefold increase in demand for services.

Out of all this trouble, one positive trend has emerged: Charities are focused as never before on efficiency, cutting costs while maintaining services and finding new ways to survive.

"Nonprofits are certainly adapting and getting creative," says Kim Klein, author of the book "Reliable Fundraising in Unreliable Times." "I really defy any for-profit corporation to be as efficient and creative as a nonprofit."

Nonprofits have no choice. Donations are down 9 percent this year at the nation's top charities, according to The Chronicle of Philanthropy, an industry publication. Some 77 percent of charities let fundraisers go or cut fundraising spending.

"There's an enormous amount of attention being placed on efficiencies and measurement," says Ken Berger, president of Charity Navigator. "Most nonprofits are focusing on that right now."

Next year will be worse, predicts Robert Ottenhoff, chief executive officer of GuideStar, a firm that provides financial data on nonprofits. "Foundations, who contribute significantly to nonprofit efforts, were willing to go deeper [into endowments to keep up giving] in 2008. But with endowments down, foundations aren't likely to repeat [that]." Add to that a dramatic decline in state government grants and corporate giving, and it becomes clear that nonprofits' streams of funding are drying up. Particularly worrisome for nonprofits and their clients are states like Florida and California, where unemployment is high and state budgets are especially tight.

To keep operating, many nonprofits are starting with the basics – better targeting of donors and cleaning up accounting programs to pinpoint savings, says Ms. Klein. She points to Amnesty International, which uses advanced technology to analyze giving patterns in order to maximize donations while reducing the overall frequency of fundraising campaigns throughout the year.

Some charities are aggressively deploying new technologies' social networking to extend their fundraising efforts. Doctors Without Borders, which typically relies on direct appeals, recently launched a tool modeled after a sports event where donors are asked to raise money from their friends and family. The hoped-for result: an army of donors.

"There's a lot experimenting going on right now with social media," says Stacy Palmer, editor of The Chronicle of Philanthropy. "But it's way too early to say whether it's working or not."

Another survival tactic: cooperating with rivals. "We're starting to see a number of nonprofits with similar missions sharing administrative functions," says Daniel Borochoff, president of the American Institute of Philanthropy, a charity watchdog. "That's something most thought would never have occurred."

The Center for Nonprofit Advancement, a Washington-based group that helps local nonprofits, created a program called "Back Office in a Box," which pools nonprofits, enabling them to share financial management and accounting resources. In San Francisco, meal providers Project Open Hand, St. Anthony's, Glide Memorial, and the San Francisco Food Bank have joined forces to share kitchen space. Some donors are pushing for those consolidations. The San Francisco Foundation recently recommended that the city reduce the nearly $500-million a year it spends on outside social-service organizations by helping some of the 7,000 local nonprofits cut costs, merge, or close.

To make up for the cuts in staff, some charities are also using more volunteers. "With unemployment high, many nonprofits are relying on volunteers to stay afloat," says Klein. According to the Corporation for National & Community Service, more than 61.8 million Americans volunteered this year – an increase of about 1 million from last year (see chart). Ironically, the increase has many potential volunteers struggling to get called back, or being placed in jobs that don't match their skills.

But the strategic use of volunteers remains a boon for many organizations. One San Francisco nonprofit, the Jewish Voice for Peace, enlisted 14 volunteers to help with fundraising. "The team … ended up raising $40,000 more than last year," says Klein, who advises the organization. "That's more than what the existing staff would have been able to do."

Even with the greater attention on efficiencies, many nonprofits won't survive, watchdogs say. There are simply too many, says Mr. Ottenhoff. "This is the time that we'll see a lot of consolidation."

But Klein hopes that nonprofits will remain optimistic. "With so much attention focused on deliverables and outcomes, I just hope that [nonprofits] will continue to experiment. It's crucial for everyone."

---

As months passed, Mrs. Maholic learned of a small, up-and-coming charity in Colorado called Knights of Heroes, which provides free, all-inclusive summer camps and long-term mentoring programs for sons of fallen soldiers.

A week of fishing, canoeing, and horseback riding with other children and adult male role models – especially ones who ostensibly knew what Andrew was going through – seemed perfect, but Maholic was apprehensive. The camp was located in Colorado Springs, Colo. She and Andrew were in Fort Bragg, N.C. No one in her immediate circle of friends and family had heard of the organization.

It seemed promising. The camp even offered to arrange for mothers and sisters to be lodged nearby during the session. But she needed more. Like many parents in search of advice, she went online and discovered what she needed – and a new way to evaluate charities.

With the explosion of social networking and user-generated online content, a new crop of websites promises to use similar techniques to help donors, volunteers, and clients assess nonprofits. In some, reviewers are asked to provide commentary on their personal experiences; others poll constituents. It's not fail-safe. But the approach arms donors with information that goes beyond the financial information provided by traditional charity-rating services. It also exposes charities to far greater scrutiny, which some nonprofits have struggled to warm up to.

"It gives you a great feel for what [the experience] is really like," says Maholic, who used a service called GreatNonprofits to check out the charity. "I really got the sense that [Knights of Heroes] would treat them like their own [children]."

Her son, Andrew, has attended two camps with the charity and now receives weekly calls from his mentor. "Andrew's mentor can really relate to him," she adds. "He's been there and knows that sometimes you don't have to say anything."

Previously, donors have relied heavily on GuideStar and other firms that decipher financial data required by the Internal Revenue Service. "While financial data certainly has its place, donors and volunteers should use their heart and their head in making decisions," says Perla Ni, chief executive officer of GreatNonprofits, based in Palo Alto, Calif. "No one has a better perspective on a charity than those who experience it."

GreatNonprofits was conceived in the aftermath of hurricane Katrina. "We were looking for local nonprofits that were helping local residents of Biloxi, Miss., but found that information was hard to come by," recalls Ms. Ni, who was the publisher of Stanford Social Innovation Review at the time. "So we sent someone to walk the streets and ask residents which nonprofits were doing the best work." That basic idea of gathering opinions from those served became the basis of GreatNonprofits. Since then, the service has grown to rate some 2,000 charities. Some 50,000 visitors view the site each month, according to the group.

Some users are enthusiastic. "It's not just about ratio and numbers; it's whether a charity is vibrant and useful to the community," says Sean Stannard-Stockton, CEO of Tactical Philanthropy Advisors, which assists foundations and wealthy donors. He regularly consults websites like Yelp! and GreatNonprofits before making recommendations.

At least one established ratings group is jumping on the bandwagon. Charity Navigator, which has evaluated charities since 2001 based primarily on financial data, is planning to revamp its ratings system. Soon the service will incorporate the human perspective on a nonprofit's effectiveness by surveying its constituents and presenting those findings along with the financial performance.

"There's a new movement within nonprofits to focus on results," says Ken Berger, president of Charity Navigator. "How do we know that you're not doing more harm than good?"

The change is provoking criticism from some charities, Mr. Berger concedes. They ask: " 'Are you mad? We are just so unique,' " he recalls. But he argues that such sentiments are inexcusable and that measuring results might actually help nonprofits with foundations and donors. "Being able to demonstrate how you've helped will become increasingly important," Berger says. "Many foundations are requiring that nonprofits measure their results to qualify for grants." Some nonprofits are apprehensive, Ni agrees. "They're afraid of airing their dirty laundry in public. But if people are going to say something negative, you can always take that feedback and make changes."

But how reliable are those user reviews, especially when a charity is dealing with difficult clients? For example: Delancey Street Foundation in San Francisco provides job training for substance abusers, ex-convicts, and the homeless. When one Delancey Street client posted a negative review on GreatNonprofits, calling into question the group's long-term results, spokeswoman Carol Kizziah was incensed. "I personally found the reviews to be slanderous," she says. "I just don't know how they could give a voice to a drug addict."

Those are exactly the people who need to be heard, Ni counters. "We're giving a voice to the people that the charity serves. We always give nonprofits the opportunity to counter reviews."

"There's no question that donors want reliable information," says Berger of Charity Navigator. "Getting that information is certainly going to be complex and difficult, but it will happen."

In the end, these new ratings tools will prove to be a net positive for charities and those they serve, says Brian Hill, executive director of The Oral Cancer Foundation in Newport Beach, Calif. "Either you produce or you don't. It's easy to lose sight of the people you serve, but seeing people's comments really helps you stay focused and efficient."

Mr. Hill adds that being highly rated on GreatNonprofits has helped by significantly increasing his base of donors. "Money really does flow from the message boards. If it wasn't for the Internet, The Oral Cancer Foundation wouldn't be anywhere," he says.

Trusting the charity was everything to Maholic, who pondered letting her only child travel more than 1,000 miles to the Knights of Heroes program – even though she'd be in the state while he was. "I had a gut feeling that they'd be good, but hearing from others made it a lot easier to be away from Andrew," she says.

--

SAN FRANCISCO –Panhandlers have a new tool: clipboards and binders filled with jarring photos, heart-wrenching statistics, and donation forms.

Federal health officials armed with new data showing gay men are behind a significant increase in syphilis are pleading with local communities to help stop the disease.

The report showed the first increase in syphilis transmissions since 1990 and while the increase was two percent amongst the whole population, experts were most concerned by a 15.4 percent increase among men.

“This increase coincided with outbreaks of syphilis among gay and bisexual men of all races in several American cities,” says Dr. Ronald Valdiserri, the deputy director of the CDC’s Program for HIV and STD prevention. Valdiserri noted that cities with significant gay populations had the greatest increase. On the list: Chicago, Los Angeles, New York City, San Francisco, Seattle and Miami.

What worries health officials the most is the troubling connection between syphilis and HIV transmission. Officials say syphilis increases the risk of HIV transmission by two to five times.

“Our challenge and the challenge for gay and bisexual communities across America is to underscore the connections between syphilis and HIV and to renew the kind of commitment that these communities brought to HIV prevention in the early years of the epidemic,” says Valdiserri. “Syphilis itself is a major concern but it also signals the potential for a resurgence of HIV.”

Why the increase? The CDC says gays are treating STD prevention less serious in light of improved STD treatments or are ignorant to HIV transmission. “There’s a sea change in the communities’ perception about sexual risk and sexual health and it’s a really difficult and challenging problem,” says Valdiserri. “The perception is that HIV is no longer an issue and that practicing safe sex is no longer an issue because the disease has been licked. Unfortunately, that’s wrong.”

Prevention officials plan to intensify their efforts by working with local health departments. In their arsenal are a number of creative campaigns including mobile testing for syphilis, educational outreach at bars and clubs and Internet campaigns to stem transmission.

Prevention volunteers at the Stop AIDS Project in San Francisco knew syphilis was on the rise and are planning special campaigns to reach the community. “We’re planning a number of upcoming intervention events designed to inform people about and stop the transmission of syphilis,” says Shana Krochmal spokesperson for the group.

Valdiserri says it will be these programs that will stop syphilis. “Ultimately it will depend on the community to carefully target prevention resources to gay and bisexual men most at risk.”

For Ron Davis, a 33-year-old San Francisco gay man, sex is a thrilling game of Russian Roulette. Davis plays this game of life and death every time he has sex, skipping the condom, and not because he's in the heat of the moment.

That scares officials at the Centers for Disease Control and Prevention in Atlanta who studied the phenomenon, but reaction in San Francisco remains conspicuously silent - not just with gays, but with prevention authorities as well. For a city that prides itself on its commitment to HIV prevention, strikingly little has been done to keep barebacking in check.

According to a CDC study released in April, 14 percent of San Francisco gay men 'bareback' or intentionally practice unsafe anal sex with someone other than a primary partner. It's the intentional practicing of barebacking that scares the CDC the most. Gays are hungering for something racy or taboo and have found an outlet with dire consequences.

Experts say barebackers may have self-esteem issues that draw them towards unsafe sex practices. Doing something unconventional or recalcitrant seems to empower barebackers. For Davis, it's a way to feel better about himself and gain emotional connections that he feels is lacking. But how barebacking fills the void still puzzles researchers.

At 33, Davis is a generation behind the devastation and public awareness campaigns of the late 80's and early 90's when San Francisco was marred by a real fear of HIV infection. Which leads some activist to wonder if today's generation is filled with apathy, ignorance or denial when no longer confronted with frequent funerals.

Meanwhile, most prevention programs continue to emphasize the merits of using a condom - a message that has lost much of its effectiveness. With improved HIV treatments and a sense that the worst is behind them, more and more gays are turning a blind eye towards the mainstream prevention message.

But San Francisco's multitude of HIV prevention authorities and nonprofits has been reluctant to address the growing rate of barebacking. To be fair, experts say the phenomenon is new and some prevention programs are in the works. But still, the trend has the CDC rousing local communities to target individuals like Davis with a broader prevention message.

According to experts, prevention programs for barebackers require a more holistic approach to prevention -- incorporating emotional wellness and spirituality as well as the health aspects. And the most powerful weapon claim experts is to help barebackers build and foster intimate relations outside of sex.

Barebackers not only risk HIV, but many other STDs. Studies show syphilis and gonorrhea on the rise. This dangerous trend caused the CDC to go one step further in May: urging doctors to push gay men to test for STDs every six months.

San Francisco's STOP AIDS Project acknowledges that prevention groups are concerned by the increase in unsafe sex, but aren't yet armed with tools to counter barebacking. "It's happening everywhere and it's very concerning. The first step is getting people to talk about it and then to understand that preventing AIDS is a lifelong commitment," says a STOP AIDS spokeswoman.

In the meantime barebacking promises to undermine the drop off in HIV transmission if the phenomenon isn't dealt with quickly. It's an issue that will require the support of government, non-profits and individuals. The CDC took the first step in describing barebackers, but its now up to San Francisco to emerge again as the leading city in HIV prevention.

So how many pledge drives are there exactly?  Winter, Spring, Summer, Fall.  The occasional Earth Day drive. They do seem to sprout up all over the place. 

You add that to Joe McConnell’s traffic sponsorships, Lieff Cabraser sponsoring segments and the seemingly countless foundations, corporations and individuals sponsoring just about everything on KQED, I’m led to wonder:  so really, if you add up all the sponsorship plugs, pledge drives and otherwise is KQED any different than a for profit radio station?  Sure, I enjoy my Morning Edition, but now really how is much of what I hear any different than advertisement?

Toyota commercials – I mean sponsorships – all but tell me to run out to buy a new Prius.  Just about every law firm is at my immediate disposal and countless firms are ready to hire me; yet I’m still subjected to a seemingly never-ending barrage of day-after-day pledge drives.

And really, does all of this amount to one percent of airtime as this station proclaims?  Have we really calculated all the pledge drives, sponsorship plugs and “made possible bys?”  Can’t we find a better way?  It seems that countless other nonprofits survive without such an – can I say – obnoxious assault. 

While I certainly don’t have the answers, isn’t there a technology that might let me – as a member – stream an uninterrupted and pledge-free version on my computer?  Has KQED ever thought about alternatives?  Have they ever tried finding a fundraising mechanism that was only modestly less obnoxious?

We live in an era where technology and other advances have cleared the way for many so many advances.  Isn’t time for KQED to look inward and rethink the pledge?

Charity watchdogs have a new warning for donors: Your favorite philanthropy may be loaning your money to its own executives.

It happens at thousands of charities, big and small. And it poses a dilemma for the philanthropic community. Do these perks, used to attract top leaders, ultimately make the charity stronger, better-run, and thus more effective? Or do they drain away money that would be better used on the charity's core mission?

The debate over nonprofit benefits is heating up, as some donors and even members of Congress express outrage that charitable funds are being siphoned off.

"It's appalling that nonprofits are using tax incentives and donor dollars as a personal piggy bank." says Rick Cowen, executive director of the National Committee for Responsive Philanthropy in Washington. In recent years, more than 10,700 nonprofits have given zero- or low-interest loans to their executives, according to a recent report, commissioned by the Chronicle of Philanthropy, a trade publication.

The loans are perfectly legal in most states and the federal government only outlaws foundations - not charities - from making them. According to the Chronicle, 19 states and the District of Columbia prohibit loans to executives at nonprofits, yet the publication found 221 charities within those jurisdictions loaned $10,000 or more to officials.

State attorneys general are generally responsible for overseeing nonprofits but often say they lack the resources to investigate. Some charity watchdogs are now calling for greater disclosure or an outright ban on the practice.

Charities of all sizes are making such loans. In 2001, Catholic Healthcare West (CHW), a California nonprofit that operates 43 hospitals in three states, paid its chief executive $1.2 million and gave him a $2 million no-interest home loan. If he stays five years, all but $250,000 of that loan will be forgiven.

The much smaller Jewish Community Center of San Francisco (JCCSF) , which pays its executive director Nate Levine $215,000 a year, financed his $670,000 home in August 2000.

Some nonprofits say loans are beneficial. CHW, with annual revenues of $4.9 billion, says it was losing $300 million a year and needed to attract the best CEO to turn the situation around. So far the gamble has paid off. The nonprofit is now turning a surplus that has helped fund charitable programs that would otherwise not have been possible, says Mark Klein, a CHW spokesman in San Francisco. "It's important to note that no donor dollar was used to finance the loan - it all came from operating revenues," he adds.

Other nonprofits won't discuss executive compensation. The JCCSF wouldn't answer questions related to the loan and calls to several of the group's board members responsible for authorizing the loan weren't returned.

Such loans should only be made in extreme cases argues Peter Manzo, executive director of the Center for Nonprofit Management in Los Angeles. "It's the rare exception that a nonprofit should make a loan to an executive and [it] should feel comfortable explaining or justifying its decision to anyone," he says.

Still certain nonprofits, especially universities, have given low interest home loans to executives for decades. "Loans are very common at universities because they help attract top talent to the campus," says Mr. Manzo.

Executive loans are also most likely to occur at healthcare and some arts organizations, experts say. Social-service charities rarely have the assets to loan or offer large compensation packages.

The idea of using loans to lure executives was imported from the business world as a way to stay competitive without high salaries, says Arthur Brooks, professor of public administration at Syracuse University. But now is not the time for nonprofits to be doling out costly executive compensation packages, he warns. Giving loans "is the kiss of death for nonprofits. Nobody gets away with it forever."

Nonprofits should be subject to a higher degree of accountability, especially those that enjoy huge public support, professor Brooks adds. "The public has a right to be uneasy when nonprofits are largely unregulated and they sense that nonprofits are compensating [executives] too highly or are giving hidden perks like these loans."

Charities are required to make their tax returns public, but filings are notoriously late and often difficult to read. Of the 10,700 loans examined by the Chronicle, nearly half failed to accurately report the information on their tax returns. That's where regulators and Congress should step in, says Brooks. "Regulators need to focus on making the information transparent and easily available to donors." he says. "Transparency will have a chilling effect on how frequently loans are given."

IRS officials say the agency lacks the staff to keep up with the estimated 850,000 charities nationwide. Each week, 59 staff members review an average of 6,000 nonprofit tax returns, making oversight difficult. Charles Grassley, (R) of Iowa and chair of the Senate Finance Committee, which has been investigating nonprofit finances, wants to ban nonprofit loans altogether. Congress is also debating whether the recently enacted Sarbanes-Oxley Act, which added new disclosure requirements for corporations, should be expanded to cover nonprofits.

Experts say the industry is trying to regulate itself and Brooks expresses concern about possible overregulation. "If nonprofits are burdened with excessive reporting some charities might never get started and that has significant implications for society," he says.

In the meantime, experts warn donors to pay close attention to federal filings about loans to officers and directors. But finding loans within tax documents isn't easy. Online databases such as Guidestar (www.guidestar.org) help, but require skillful examination, they say.

The city’s top resorts have lots to be proud of and have helped make the region attract a more diverse crowd than yesteryear when retirees largely dominated.  But today, families and weekend travelers are enjoying a growing array of activities from high end shopping to top rated golfing. 

The Phoenecian has one of the largest spa and golf facilities in the region and seems to spare nothing to impress its guests.  It also has the region’s only Mobil Five-Diamond Restaurant, Mary Elaine, with its remarkable food, service and décor. 

Click for more.

When it comes to charity, are more nonprofits necessarily better?

America has always been known for its entrepreneurial spirit. Mixed with an increasing desire to help the disadvantaged, that spirit has created a dramatic increase in the number of nonprofits. In fact nearly 500,000 have been created in the past 10 years, bringing the total to 1.5 million organizations. But some nonprofit experts are beginning to wonder if that number does more harm than good.

"The real question is how long will this growth be sustainable? At some point, we'll simply have too many and the funding won't be able to support the numbers," says Paul Light, professor of nonprofit studies at New York University.

For donors, the growth certainly gives them options, but also dilemmas when faced with the decision of who to support. For example, people looking to support education in Des Moines, Iowa, have 330 nonprofits to choose from, according to a search of nonprofit databases. San Francisco givers who want to help the city's homeless have more than 125 possibilities. Portland, Maine, has more than 450 charities that help children.

"It's the No. 1 complaint I hear from donors and there is general consensus within the industry that there are too many nonprofits," says Professor Light. "It has already caused enormous competition for funding and has tightened the workforce so significantly that it's nearly a crisis at most human-services organizations."

Many nonprofits have administrative operations that need support and with so many focused on similar activities, experts are beginning to call for changes. "It just doesn't make sense to have so many organizations doing the same thing within the same community. What needs to happen is for nonprofits to start thinking about merging or consolidating their operations, but no one is willing to say which one's should do it," says Light.

While overall giving has increased, it's primarily going to the major organizations like the United Way, American Red Cross, and church groups. In fact, donors gave $248.5 billion last year, a 5 percent jump from 2003, according to the Giving USA Foundation. When accounting for inflation, it's the first increase since 2000. But giving in some key charitable areas like human services and international affairs actually decreased in inflation-adjusted dollars.

The overall increase is robust, says Hank Goldstein, Giving USA's chief executive, but he warns donors that the proliferation of nonprofits has created inefficiencies and duplication. "This really is a cottage industry and not all nonprofits are well-run. For every one nonprofit [that is], you have 10 that aren't."

Mr. Goldstein advises donors to look for nonprofits that follow their mission, operate efficiently, and have a board of directors that you can trust. "Donors should spend some time to get to know their nonprofit and make sure you trust that the organization is going to do what it says," he says.

Contrarian view Not everyone agrees that there are too many charities, however. "Who's to say when we have too many?" asks Robert Ottenhoff, chief executive of GuideStar, an organization that tracks nonprofits. "The number is a sign of vitality and creativity and that people want to do something about a problem."

But Mr. Ottenhoff warns that for charities, "the era of assumed virtue is over. Donors have many choices and they're conducting greater due diligence on nonprofits."

To reduce the number of nonprofits, some communities including Pittsburgh, have offered financial incentives encourage charities to merge.

"Unfortunately, nonprofits don't like to be told what to do and usually it's only the wrong organizations that take advantage of these efforts," Light says.

Even Light suggests that there is room for more charities in certain sectors, especially in areas that care for the poor. "Human-service nonprofits are still needed in some areas, but the new ones really need to shake up the norm or challenge the industry."

Currently, barriers to enter the nonprofit industry are relatively easy to overcome, experts say. "The IRS rarely does more than rubber stamp a nonprofit application," says Ottenhoff.

That lack of oversight by the Internal Revenue Service has alarmed some federal lawmakers, who fear that some groups are gaining nonprofit status to manipulate the tax code or misuse donor dollars. With few regulating this growing group, some wonder if new laws should make earning nonprofit status more difficult. The Senate Finance Committee is now considering whether to make nonprofits re-register every five years. Reaction is decidedly mixed, but supporters say the process would help weed out charities that haven't been effective.

Restoring trust "Donors need to be able to trust that a nonprofit is going to do good with their money. That just isn't the case right now," says a senior staff member with the Senate Finance Committee, who spoke on condition of anonymity.

For now, the principal driver for change is likely to be donors, Light says.

But ultimately, the economy may decide a nonprofit's fate, according to Goldstein. "The country is living on credit and that's not sustainable. There may come a time that giving actually decreases and that would have a significant impact on the nonprofit sector."

Dinners free from telemarketers might seem nostalgic this holiday season. Although more than 58 million households have joined the federal "Do Not Call Registry," watchdog groups predict that the volume of telemarketer solicitations will increase during the next six weeks, the traditional giving season.

That's partly because the registry allows some groups, including charities, to keep dialing to ask for donations. It's also partly because some nonprofits have surreptitiously hired for-profit telemarketers to raise funds on their behalf. That practice is controversial because telemarketers often keep the lion's share of the money they raise in the name of the charity.

To keep from falling for such telephone appeals, don't make decisions on the spot, consumer advocates say.

"The [charity's] need will still exist after you've done your homework," says consumer writer Elisabeth Leamy in her book, "The Savvy Consumer."

Charities have long supplemented their coffers by selling donor lists to other nonprofits. But what is surprising experts is the growing movement of selling donor lists to for-profit telemarketing firms.

Lure of 'free money'

Some charities consider it "free money" and say that receiving 15 percent of these contributions is better than nothing.

"It's money we wouldn't get otherwise," says one fundraising executive, who spoke on condition of anonymity. "Sure, we'd like donors to give us the money directly, but many won't unless they're harassed."

The practice is perfectly legal, says Daniel Borochoff, president of the American Institute of Philanthropy based in Chicago.

"According to a recent Supreme Court case [Madigan v. Telemarketing Associates], it is OK if fundraisers keep nearly all the money raised as long as they don't falsely claim that a larger portion of contributions is going to the charity," he says. "So fundraisers can avoid getting into trouble with the law by not stating what portion of a donor's money goes to the charity."

No one knows how many nonprofits use for-profit telemarketers. But the trend has many watchdogs calling for legislation to curb telemarketers or to demand that they disclose how much is actually going to the charity.

Government officials have been trying to crack down.

Minnesota's attorney general recently challenged Minnesota Public Radio, saying it misrepresented how donor lists were being used. They eventually settled out of court, but the squabble put other charities on notice.

The settlement requires that the organization clearly disclose its fundraising practices and allow donors to opt out of solicitations. Many Minnesota charities are following that guidance.

State efforts blocked Several states that operate similar "Do Not Call" lists have tried to expand the ban to include nonprofits, but telemarketers and nonprofits have largely succeeded in blocking the expansion. Congress is considering changing the Federal Registry to include nonprofits, but insiders doubt it will happen soon.

The nonprofit world is taking such action seriously. In hopes of slowing the trend, watchdog groups are publicly censuring charities that sell donor names.

Beginning Dec. 1, Charity Navigator (www.charitynavigator.com), an online charity monitoring group in Mahwah, N.J., will include a charity's privacy policy in its ratings. To get a favorable score, the charity must not sell or trade a donor's information without written permission.

How to skip the calls Donors can avoid becoming victims of telemarketing appeals by making substantial gifts to a few organizations rather than sending smaller gifts to many nonprofits, says Trent Stamp, executive director of Charity Navigator. Such concentrated giving, he says, helps nonprofits cut fundraising expenses while minimizing the number of charities with a donor's information.

"A charity's privacy policy is a critical piece in the giving equation," says Mr. Stamp. "Charities implementing and promoting a privacy policy are not merely looking to use their donor list for short-term gain, they're trying to build long-term, mutually beneficial relationships with their donors of all levels."

So while regulators and nonprofits sort through the issue, donors need to be cautious with aggressive phone appeals, says Ms. Leamy, the consumer writer. If the telemarketer can't answer basic questions about the organization, including what share of the donation will fund the charity's programs, be wary.

When it comes to sending money, watchdog groups add, you're probably better off mailing a check directly to the nonprofit, especially to a well-run charity that can put 90 percent of a donation toward its mission.

How to avoid those unwanted phone pitches The American Institute of Philanthropy offers the following tips to slow the number of phone calls from nonprofits:

• Be selective in your giving. Give more to fewer organizations.

• Tell your charity not to sell your information. Consider including a note with your donation with this instruction.

• Write individual charities and instruct them not to call.

• Write to Mail Preference Service, Direct Marketing Association, PO Box 9008, Farmingdale, NY 11735-9008. Say that you wish to have your name removed from both commercial and nonprofit organizations' lists.

• When a charity calls, ask them to put your name on their "Do Not Call" list.

• Check with the consumer-protection agencies in your state and county concerning laws or regulations affecting solicitations.

SAN FRANCISCO - Every December, Ross Gillfillan gets dozens of offers from charities that woo him with free greeting cards, address labels, T-shirts, tote bags, and magazine subscriptions. But Mr. Gillfillan, a marketing director in San Francisco, is unmoved.

These days, he turns to several charitable rating services to figure out where he'll donate.

"I can't spend hours being a detective," he says. "I need to know and I need to trust that [they] are using my money to fulfill [their] promise to me and to society."

Such charity rating and ranking services are mushrooming as a number of recent scandals plague the philanthropic sector. These have hurt donor confidence and are one reason the number of rating services is on the rise. Less than a handful existed a decade ago, experts say. Today, there are more than 50.

"Donors can't tell what's good and bad, and need an intermediary to help guide their giving," says Art Taylor, president and chief executive officer of the Better Business Bureau's Wise Giving Alliance in Arlington, Va. The group has examined 450 of the nation's largest charities; 70 percent measure up.

If Wise Giving's website is any indication, donors are flocking to the service. More than 1.6 million visitors have viewed its charity reports this year.

Rating services differ widely. Some, such as the Wise Giving Alliance, conduct full audits of a charity's fundraising, expenses, and governance, and even investigate donor complaints. Others, such as Charity Navigator, rely on raw financial data and compare performance against industry norms.

"No one sees us as the be all and end all of giving," says Trent Stamp, executive director of Charity Navigator. But "before you buy a car, you check Consumer Reports. Now, donors have that same type of service available on charities."

Rating services aren't the only ones trying to revamp the nonprofit world. Congress has held hearings, amended tax laws, and beefed up enforcement by the Internal Revenue Service. So far, the IRS hasn't had the staff or the tools to rein in charities, experts say. What most concerns legislators and regulators are poor record-keeping, mismanaged finances, illegal dealings among board members, and excessive executive compensation.

For example, two congressmen have called for the resignation of the head of the Statue of Liberty-Ellis Island Foundation after an investigation turned up questionable spending (including $45,000 a year for a border collie to chase geese off the island). Catholic Healthcare West, one of the largest nonprofit hospital systems, has come under fire for loaning its chief executive $1.7 million in mortgage money that he might not have to pay back.

If charities don't become accountable on their own, nonprofits and donors can expect more legislation next year aimed at bolstering their accountability, say Senate Finance Committee staffers.

Although many charities acknowledge donors' rising use of rating services, not all are thrilled.

"The system [Wise Giving] uses to rate charities is flawed and arbitrary," says Robert Freeman, spokesman for Children's Network International.

The Wise Giving Alliance admonished the Los Angeles group for not accurately reporting expenses and four other disclosure-related criteria. Yet Charity Navigator gave the charity its highest rating, Mr. Freeman points out. "We've made several attempts to clarify and explain, but nothing [in the report] has changed."

Freeman also fears that the negative marks will have a profound impact on his ability to raise funds. "The potential donor really does use rating services and this could impact our ability to help children if donors are scared off," he says.

Messrs. Stamp and Taylor both agree that many charities have been reluctant to embrace rating services, grumbling that no one size fits all. But Taylor insists that without some form of independent performance evaluation, "nonprofits will flounder from scandal to scandal. You have to be accountable and if you're not, you ought to be able to explain why."

Some experts say it's an alarming trend that promises to undermine fundraising by presenting donors with misleading information that doesn't take into account a charity's mission and uniqueness.

"The vast majority of nonprofits are doing a fine job and charities that are transparent and accountable are rewarded by donors," says Bob Ottenhoff, president and CEO of Guidestar, a Williamsburg, Va., nonprofit website that lists tax returns of more than 1 million nonprofits. Rankings "can sometimes be useful, but the core data is too limited to make significant decisions based on one line on one [tax return]," he says.

Although regulators need to improve tax returns to strengthen transparency, he adds, the nonprofit industry should take it upon itself to be accountable to donors.

Proponents of charity ranking and rating services say they give donors objective information and comparisons against industry norms.

"Nonprofits have always been the keepers of the information the donor gets and [rating services] scare them because they want to control the information flow," says Stamp. "This is certainly one of the last industries to embrace accountability, but it [will] only strengthen the entire industry by making donors more comfortable with giving."

A dime here and there makes a big difference to charities.

Employers have long offered charitable donation programs that funneled money from an employee’s paycheck to a nonprofit. Along the way, middlemen who helped facilitate the transaction pocketed a small – but significant – portion. Those dimes add up to big money and big business. Some of the largest charities are, in essence, middlemen. Take the United Way. It funds countless nonprofits through these employer programs. Charities have long grumbled, but felt middlemen were a necessary part of fundraising. But that’s changing.

High profile scandals are causing many employers to rethink how the distribute donations. Some are demanding greater accountability while others are funding nonprofits directly. Union Bank and MGM Mirage are two firms that hope to shield themselves from problems by distributing donations directly to thousands of nonprofits. Technology has made the program management possible and many other firms are taking note.

Some experts say cutting out the middlemen is good news for donors who hope their dollar has the most impact. But others say nonprofit intermediaries offer reassurance and oversight that’s not possible with a self funded program. Click for more

America Online has a message for gays being harassed online: ignore it. If the harassment includes threats of violence: how about three months free.

At least that’s the message the giant repeatedly tells lesbian members of its “golden gals” chat room. For more than two years extremists have harassed and, at times, threatened to gay bash chatters. At least a dozen women have complained loudly to AOL, but their hundreds of emails and numerous calls for assistance have largely been ignored.

AOL acknowledges receiving the complaints, but asserts that it’s investigating. AOL wouldn’t say how long the investigation might take. It also continues to encourage the women to use its ignore feature and has offered many chatters free service. Meanwhile, one longtime harasser continues to brazenly threaten the women and has found personal information on several members. “It’s absolutely appalling to think they can’t remove these guys, especially considering the personal nature of some of the attacks,” says Jamie Gates, of Knoxville, TN. “We’ve complained and the best answer they can tell us to wait a year for their legal department to do something.”

Industry watchers say the women have been victimized. “I’m surprised AOL hasn’t done something about this,” says spokeswoman Cathy Renna of GLAAD. “Many times it comes down to interpretation, but this seems pretty apparent to me.” GLAAD has offered to assist the women bring the harassment to an end.

Ironically, AOL’s sister company HBO will air an October 23rd special called “Hate.com” that investigates hate organizations that continue to flourish online. “It’s appalling that [AOL Time Warner] can air a special documentary on the topic and not even keep their sites safe,” says Laurie M., another Golden Gal member.