5 Tips for Charity Donations That Count, Not Con

Older woman on computerWith Americans donating at least $358 billion to charities last year, we certainly give with our hearts, but unfortunately, not so much with our heads, according to the latest AARP research.

A survey of 800 adults by our Fraud Watch Network reveals that despite having the best intentions, the majority of wallet-opening donors continue to make key mistakes that add to their risk of being taken in a charity scam, along with other holiday hoaxes. Among the findings:

  • 70 percent who donated to a charity or fundraiser in the past 12 months did so without asking any questions about how the money would be spent.
  • 60 percent donated without verifying that the recipient charity was legally authorized to raise money in their state.
  • 52 percent said they weren’t aware that professional fundraisers are allowed to keep most of the money they raise on behalf of their cited cause or organization, as long as they don’t lie about their cut.

 

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These alarming findings are especially noteworthy in December, when charities historically have received about 40 percent of their donations — and when scammers ramp up efforts to profit from the season’s mantra of giving and from Americans’ search for tax deductions before the Dec. 31 deadline.

This year charity scammers reached new highs and lows, what with the continuation of disaster relief schemes and the four sham cancer charities that were charged with bilking consumers out of $187 million before being busted by the Federal Trade Commission and officials of all 50 states.

Here’s what you need to know in this season of giving and throughout the year:

Do your homework. Before donating, check with Charity Navigator, CharityWatch and the Wise Giving Alliance, operated by the Better Business Bureau. These three major charity watchdogs rate charities on factors such as how they spend money and protect donor privacy. (Each uses somewhat different criteria, so check short-listed charities with at least two, if not all three.) You can also contact the state agency that regulates charities where you live. In general, better-rated charities spend at least 75 percent of donations on program activities; fundraising efforts and administrative costs shouldn’t exceed 35 percent.

Beware the name game. No matter the stated cause, con artists often seek a quick buck with an even quicker mention of their “organization.” Some steal names of well-known and respected charities, but more opt for a sound-alike name such as the National Diabetes Association (as opposed to the legitimate American Diabetes Association), hoping you’ll be tricked by their fast talking. Others use reputable-sounding names, such as the bogus Cancer Fund of America, Breast Cancer Society and Cancer Support Services — all of which were involved in that $187 million ruse. Be sure to get names straight when you check with charity watchdogs — and before you donate.

Consider how you are contacted. Unless you previously gave to that particular group — and already provided it with your email address — delete any incoming emails seeking a donation. Not only are these messages usually scams, but they also could contain links (often promising photos, information or other evidence of need for your money) that could harbor computer malware. Although legitimate charities often call for donations, especially this time of year, scammers do this, too. That’s why you shouldn’t trust caller ID, since fraudsters can disguise their true identities with spoofing software. Don’t provide your credit card number unless you make the call. And when solicitors visit your home, if they are legit, they should provide informational materials you can authenticate (versus focusing on immediately getting cash or an in-hand check). Mailings are least likely to be scams, but again, do some due diligence to ensure they are not from a scammer with a printer and postage machine.

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Avoid the middleman. Fundraisers who claim to be collecting “on behalf of” usually work on commission, getting 40 to 80 percent of your donation. In some cases charities get nothing or wind up paying more to third-party fundraisers than they take in. So it’s best to donate directly to the charity of your choice.

Verify tax-exempt status. If you’re concerned about getting a bona fide tax deduction, confirm a group’s tax-exempt status by visiting the IRS website or requesting that the charity send you its tax return or Form 990.

For information about other scams, sign up for the Fraud Watch Network. You’ll receive free email alerts with tips and resources to help you spot and avoid identity theft and fraud, and gain access to a network of experts, law enforcement and people in your community who will keep you up to date on the latest scams in your area.

Photo: AlexRaths/iStock

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