Give with Confidence: 5 Tips to Avoid Charity Scams
During the holiday season, many of us feel an extra sense of generosity. You may be looking to help make a difference in your community by supporting a nonprofit or charity. Whether you choose to provide your time, resources or cash – it’s important to make sure that the organization is legitimate and actually helps those in need.
The holidays are a prime time for donation drives, unfortunately, bad actors with fake charities are also especially active this time of year.
Here are a few charitable giving tips to keep in mind this season.
1. Pay Attention to How They Want You to Pay.
If a charity requests payment via cash, gift card, cryptocurrency or wire transfer, it’s most likely a scam. If you receive a call, it’s best not to provide your credit or debit card information to them over the phone either. The safest way to pay, once you’ve vetted the charity, is to send your donation via check or credit card.
2. Skip the Middleman. Donate Directly.
You may encounter fundraisers that act as a middleman between you and the charity. While some of these are legitimate, there is a real chance that not all of the money you donated ends up in the organization’s pocket. At best, those third-party fundraisers cost the charity a portion of the money you donated. At worst, your donation goes directly to a scammer who never intended to forward it to the charity at all. It’s better to go directly to the charity to donate. Doing this also reduces the number of actors who have access to your personal and payment information.
3. Keep Track of Your Donations.
While you should always keep receipts for your donations in case you need them for tax purposes, that’s not the only reason you should keep track of your donations. Shady organizations are known to overcharge or sign you up for recurring donations you didn’t ask for. So it’s important to keep an eye on your bank account and credit card statement for any unauthorized charges disguising themselves as charitable donations.
4. Take a Time Out.
Before you grab your pocketbook, take a moment to carefully consider your donation. It is perfectly acceptable to reject on-the-spot donation requests from door-to-door fundraisers or telemarketers. If they insist on an immediate donation and use high-pressure tactics to get you to hand it over, they are likely a scammer. Real charities will welcome your donation at any time and encourage you to inquire for more information before donating.
5. Do Your Research Before You Donate.
When you do your homework, you can ensure that the charity is reputable and aligns with your values and goals. Ask the charity the following questions or visit their website to see if the answers are available there.
- What services do they provide?
- Who do they help and where?
- How long has the organization been operating?
- Do they have an annual report I can review? If so, what does it say?
- Will my donation be tax deductible?
- Who runs this charity?
Reputable charities will be happy to answer your questions. If an organization is unwilling to provide this information before you donate, consider donating to a different charity with a similar mission that is more forthcoming. Lack of transparency can be a sign you are not dealing with a legitimate charity.
Next, verify the information elsewhere.
- Look up the organization using a charity rater like CharityWatch, BBB Wise Giving Alliance or Charity Navigator. These sites provide overview information that may help make your decision. Do note that small, local or new charities may not appear on these websites.
- Type the name of the charity with “scam” or “review” into a search engine to find out what others are saying.
- Confirm that your donation is indeed tax deductible by visiting the Internal Revenue Service’s Tax Exempt Organization Search.
- If the charity claims to work with local organizations, contact them to see if that’s true.