5 Tips to Help You Steer Clear of Charity Scams
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Follow these tips to keep fake charities from scamming you out of your donations.
With tax season officially upon us, like many people, you may be looking for new opportunities to make tax deductible contributions that will offset your tax burden next year. Using your money to benefit others is a great idea! It also creates an opportunity for scammers soliciting donations for fake charities, so it’s important to make sure that your funds reach a legitimate organization.
How can you separate the scams from the reputable organizations that do so much good with the donations they receive? Follow these tips before deciding where you’ll donate and help ensure your hard-earned money will reach the intended recipient.
1. Do your homework.
Before writing a check or clicking an online donation button, take a few minutes to research the organization you plan on supporting. Does the charity have a solid track record and clear explanations of how it handles donations? How much of every dollar donated actually goes to address the organization’s mission? The organization’s website should offer plenty of transparency about its operations and what it does with donations. Finally, guidestar.org is a good resource where you can review a nonprofit’s IRS Form 990, which offers a wealth of information about its revenues and spending.
2. Trust, but verify.
Make sure the organization asking for donations is actually the charity you want to support. Scam organizations often choose names similar to the names of well-known charities. If you’re being solicited in person, ask the representative for proof they are affiliated with that organization. Also consider searching for the organization online to see whether there have been any complaints about its fundraising or operations. And double check that an organization’s name, seals and logos are legitimate; some charity scams will try to mimic a real nonprofit by using a similar name or logo.
3. Be wary of in-person solicitations.
High-pressure requests to donate are a red flag—a reputable organization won’t force you to make a quick decision about whether or not to support its mission. A scammer, however, may try to separate you from your money as quickly as possible. Be willing to ask questions! Check to see if the caller is a paid fundraiser, and be willing to ask for additional information to gauge how knowledgeable the representative is about the services or programs the organization supports. If the person can’t offer much detail, it may be an indication that the organization isn’t legitimate. In these instances, you can always say you’re happy to do some more research and make a decision at a later date.
4. Watch for odd collection methods.
Does the fundraiser ask you for cash or request a wire transfer? Or does he or she want you to send donations via a courier or overnight delivery? These are typically signs that a scammer is working to get into your wallet. Instead, make sure the organization can give you a receipt for any donation you make, and that any gift is tax deductible. If your donations aren’t tax deductible, the organization likely isn’t a nonprofit and may be simply trying to make money.
5. Consider checking out nonprofit trackers.
Services, such as Charity Navigator, offer ratings of nonprofit organizations based on metrics such as financials, accountability and transparency. It also discloses important data such as the percent of a charity’s total revenue spent on the programs and services it delivers.
It’s not uncommon to receive requests for donations, whether from national organizations or local charities. But for most people it’s impossible to support every legitimate organization. One solution is to have a strategy for your charitable giving. That may mean selecting a handful of issues or charities to support, and making your donations at certain times of year so you’re not feeling pressured to give in the moment. With your strategy in place, you’re likely to feel much more at ease about saying ‘no’ and avoid saying ‘yes’ to last minute requests—and potentially falling prey to scammers.