With the holiday season coming up fast, you are probably thinking about donating to a charity. Unfortunately, some scam artists are right there to defraud you through the use of fake charities.
When you read stories about people using fake charities to enrich themselves, it can make you cynical about charitable giving. After all, you work hard for your money and only want to part with it to benefit a proven good cause. Here are 6 steps you can take to avoid being taken in by charity scams.
- Do Some Research – Get the exact name, address, and phone number of the organization. Do some online research. There are several tools to help you determine if the charity is reputable. They include:
- Exempt Organizations Select Check which is on the IRS website
- Charity Navigator
- Charity Watch
- Better Business Bureau’s Wise Giving Alliance
- Never Give Personal Information- Fake charities tend to ask for overly personal information. Never give your Social Security number or bank information to anyone that claims s/he is from a charity. Only give your credit card number to a charity you know well.
- They Should Give You Information- Reputable charities answer important questions about their organization. Do not give to an organization that fails to:
- Describe its mission
- Detail how it uses contributions
- Provide evidence that a donation is tax deductible
- Be Wary of These Tactics- According to the Federal Trade Commission (FTC), here are some common tactics that scam artists use to defraud people.
- Promise a sweepstakes winning in exchange for a donation (that is illegal)
- Pressure you, during a phone call, to donate before hanging up
- Thanks you for your past donation (when you have no memory of giving to this organization)
- Has a name similar to a well-known charity (i.e. The Breast Cancer Society instead of the American Cancer Society)
A representative of a well-known children’s hospital or service organization is likely to be enthusiastic; however, a reputable person avoids making potential donors uncomfortable.
- No Cash, Ever! – Scams ask for cash or wire transfers (which cannot be returned). It is easy to steal cash or wire transfers. Cancelled checks and credit card statements are also better for tax purposes.
- Call the Police (If They are Collecting for It) – Some charities claim to collect for local public safety officials such as the police. Safeguard your donation by getting the exact name and phone number of the organization. Then, call your local police and ask if this charity collects money to help local police officers. If it is a scam, you have the police on the phone and can easily report it.
Be Careful with Your Money
If you are a big-hearted person, you want to assist a wide range of people. However, you help yourself by doing some homework before donating to any organization. If a relative tells you s/he received a solicitation that has any of the warning signs mentioned above, show him or her this article. Contact the police immediately if you suspect fraud.
If you want to give locally, consider a hospital or faith-based organization as opposed to a national charity. You might feel comfortable if you can see the benefits of your contributions. Once you find a charity that you respect, develop a plan to track your giving and stick with it.