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Your generosity is commendable, but before you donate to a charity, take a moment to ensure your good intentions aren't exploited. Unfortunately, scammers exist who prey on people's compassion. This guide will equip you with the knowledge to make informed decisions about your charitable contributions and avoid falling victim to fraud.
Red Flags of a Charity Scam
The Federal Trade Commission (FTC) warns that legitimate charities and deceptive fundraisers alike utilize various methods to solicit donations, including phone calls, face-to-face interactions, emails, social media, and mobile devices. Here are some red flags to watch out for:
Lack of Transparency
A genuine charity will readily provide detailed information about their mission, operating costs, and how your donation will be used. This includes disclosing the percentage of your contribution that directly benefits the cause rather than lining the pockets of telemarketers or fundraising companies.
Uncertain Tax Deductibility
Be wary of any organization that cannot confirm whether or not your donation qualifies for a tax deduction.
Imitation is the Sincerest Form of Fraud
Scammers often use names that closely resemble established, reputable charities.
Phony Gratitude
A "thank you" for a donation you never made is a clear sign of a scam.
High-Pressure Tactics
Legitimate charities understand that informed decisions take time. Be wary of anyone pressuring you to donate immediately, without allowing you to research the organization.
Unsuitable Payment Methods
Cash, wire transfers, and overnight courier services for immediate collection are all tactics used by scammers. Remember, legitimate charities will accept secure methods like checks made payable to their organization or credit card transactions.
Promises Tied to Donations
Sweepstakes entries should never require a donation.
Your Charity Checklist:
Donating Wisely
By following these steps, you can make informed choices that ensure your donations reach the causes you care about:
- Gather Information: Obtain the charity's complete name, address, and phone number.
- Research Online: Search the organization's name along with terms like "complaints" or "scam" to uncover any negative experiences or reports.
- Direct Contact: Verify the solicitation's legitimacy by contacting the charity directly. Speak with their development department to confirm awareness of the fundraising activity.
- State Registration: Certain states require charities and fundraisers to register. Check with the National Association of State Charity Officials (NASCO) at nasconet.org to determine if registration is necessary in your state.
- Trusted Resources: Consult the Better Business Bureau's (BBB) Wise Giving Alliance (give.org) or Guidestar (guidestar.org) for further evaluation of the charity.
- Paid Fundraisers: If contacted by a paid fundraiser, inquire about:
- The charity they represent.
- The percentage of your donation allocated directly to the cause you support.
- The fundraiser's commission.
- Record Keeping: Maintain a record of your donations for tax and security purposes.
Donating Smart:
Taking Control
Strategic Planning
Develop an annual donation strategy, specifying the causes and charities you wish to support.
Tax-Deductible Verification
Use the IRS Exempt Organizations Select Check (apps.irs.gov/app/eos) to confirm a charity's eligibility to receive tax-deductible contributions.
Tax Implications
Understand the difference between "tax-exempt" and "tax-deductible." The first implies the organization doesn't pay taxes, while the latter allows you to deduct your contribution on your income tax return.
Secure Payment Methods
For security and tax documentation, utilize checks made payable to the charity or credit card transactions.
Never Wire Money
Wire transfers are akin to sending cash, offering no recourse after the transaction is complete.
Thorough Research
Never donate before conducting a comprehensive investigation into the charity.
Be Wary of Sudden Appeals
Scams often emerge swiftly after a natural disaster or crisis. If supporting local organizations, verify their legitimacy directly with the local agency they claim to assist.
Text to Donate
Donating via text message will result in a charge on your mobile phone bill. If you have blocked premium SMS charges, text-to-donate options won't be available.
By following these guidelines, you can confidently contribute to worthy causes and ensure your charitable efforts truly make a difference. Your donations will have a lasting impact, providing crucial support to those in need and helping to create positive change in the world. With a thoughtful and strategic approach to giving, you can make a meaningful difference in the lives of others.
