Avoiding Charity Scams: Five Steps to Take Before Donating
Every year, there are more and more stories about different scams and fraudulent practices taking advantage of the generosity of Americans, especially in times of emergency or around holidays like Memorial Day and Veterans Day.
When donors decide to support a cause they care about, they want their donation to count. By doing some research and planning, you can help ensure your donations get to an organization who will be good stewards of your resources. Here are tips to help you plan your donation – and avoid scams.
1. Are they a registered public 501(c)(3) organization?
Ask the charity what their EIN is. If they don’t have one -- don’t donate. Once they give you their EIN, you can find them on Charity Navigator, Charity Watch site or GuideStar . If you can’t -- don’t donate. (Of course, there are organizations who are brand new who haven't yet filed their first Form 990, so ask if they're a newly opened organization, which would explain why they're not on the charity sites).
2. Be careful how you pay.
If someone wants donations in cash, by gift card, or by wiring money, don’t do it. That’s how scammers ask you to pay. To be safer, pay by credit card or check. It’s a good practice to keep a record of all donations. And review your statements closely to make sure you’re only charged the amount you agreed to donate – and that you’re not signed up to make a recurring donation. Bogus organizations may claim that your donation is tax-deductible when it is not.
3. Find out the organization’s mission, goals, and history of success.
If a charity struggles to answer these questions, consider giving elsewhere. You want your donation to support a cause you care about. Scammers make lots of vague and sentimental claims but give no specifics about how your donation will be used. Charities should take the time to answer your questions – your donation should be valuable to them, just like the time they’re spending building a relationship with you. If the fundraiser who contacts you refuses to answer these questions, leads you around in a circle, or tries to pass off these questions as not important, your donation will be better served elsewhere.
4. Google it!
Seek out the charity’s website to validate their work. After storms and disasters of all kinds and capacities, individuals are likely to set up fake websites claiming to be a charity. Make sure you can find the nonprofit’s EIN somewhere on their website or donation page to know that the money is going to the right place. Most nonprofits also have .org website rather than .com’s. When you consider giving to a specific charity, search its name plus “complaint,” “review,” “rating,” or “scam.”
5. Keep scammers’ tricks in mind.
Don’t let anyone rush you into making a donation. That’s something scammers do – they try to trick you into paying them by thanking you for a donation that you never made. Scammers can change caller ID to make a call look like it’s from a local area code. Some scammers use names that sound a lot like the names of real charities. This is one reason it pays to do some research before giving. Guaranteeing sweepstakes winnings in exchange for a donation is not only a scam, it’s illegal.
If you see any red flags, or if you’re not sure about how a charity will use your donation, consider giving to a different charity. There are plenty of highly rated organizations out there who are worthy of your hard-earned donation.