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Avoid charity giving scams
Trust your instincts, say fraud experts, because otherwise you’re likely walking into a scam. Email solicitations are a favorite route of con artists who prey on people’s propensity to give more to charities during the holiday season.
“They might lead you to a website that is not legitimate and asks you for your personal information, your credit card number, and that money will never reach the actual intended charitable organization,” says Felicia N. Thompson, spokesperson for the Better Business Bureau (BBB). “Or, you could wind up downloading a virus onto your computer.”
Phone solicitations are a common holiday-time scam, Thompson says. The caller might say he is from the “American Cancer Group,” and you think he means the reputable “American Cancer Society.” But he’s not, and the only person you’re helping with your donation is the person who is essentially robbing you.
“If it’s a true charity and they want your donation, they’ll be more than happy to supply you with written information or allow you to hang up the phone and ask for time to go directly to the source online,” says Thompson. “So researching the charity is key.”
“You want to look at a charity’s financial health, their commitment to being accountable and transparent and their reporting on their results.”
Also, odds are that if the solicitation is being done by phone, the telemarketing firm is taking a portion of your donation, says Sandra Miniutti, vice president of Charity Navigator, which evaluates the credibility of the country’s largest charities. Because of this cost sharing, you’re much better off donating directly through the charity’s website or directly by check. “There’s no legal restriction on how much of your contribution they can keep,” she says. “It could be as high as 95 cents of every dollar.”
Texting scams are another popular holiday-season tactic. Scammers often use social media, such as Twitter and Facebook, to encourage donors to make a quick donation by texting a five- or six-digit number. But the number could be a fake, so Thompson recommends you verify first by checking with the texting directory at The Mobile Giving Foundation (bit.ly/M-Giving).
To ensure that your donation is secure and going toward the right cause, never click through on a link in an email. Instead, type the charity’s URL directly into your browser. And if it’s a charity you haven’t heard of, research them first on a website such as CharityNavigator.com or the Better Business Bureau Wise Giving Alliance (bbb.org/us/charity/). Charity Navigator uses a four-star ranking system to rank the 7,000 largest of the nation’s 1 million public charities. For charities it doesn’t rank, the site provides a link to the organization’s 990 form, which is the tax form charities must file with the Internal Revenue Service.
“You want to look at a charity’s financial health, their commitment to being accountable and transparent, and their reporting on their results,” Miniutti says. “You want to make sure that they’ve posted their financial documents on their website and that, if you call them, they’re willing to answer your questions.”
Many charities are very small, hyper-local and might only have an immediate purpose, such as to help out the neighborhood family whose child has cancer or raise money for a new football field. In these cases, it’s often best to get your money as close to the source as possible.
“If it’s for a neighborhood family in need, contact them directly and donate to them rather than to one of their representatives,” says David Bakke, philanthropy expert at MoneyCrashers.com. “If you’re still in doubt about whether your funds are actually going to someone truly in need, see if the charity is registered at the Attorney General’s office of your state or at the website of your local BBB.”
If you’ve already fallen for a fake charity scam, report it to the BBB. “If we find out something is going on, we can alert the media and do what we can so that more folks won’t fall for the scam,” says Thompson. “Because unfortunately, these sites pop up overnight and can disappear just as quickly.”
If you donated by credit or debit card, call your bank and ask two questions: 1) Can they stop the payment or issue a refund? 2) Have there been any fraudulent charges on your account? Unfortunately, scammers might be looking to steal more than just the amount you donated.
Don’t be discouraged from giving. While there are charitable pitfalls out there, there are many more honest-to-goodness organizations and people out there who adhere to their humanitarian missions and play by the rules. If you take the time to research a charity and make sure that your money is going exactly where you want it to go, you’re not only making the best use of your resources, you’re ensuring that those in need get the help you intend to help provide. And you’re ensuring that your gift will give you peace of mind.