Businesswoman using smart phone

Tips to avoid charity scams

Fraudsters often rely on current news – including the ongoing COVID-19 pandemic and the Russia-Ukraine war – to advance their schemes. They know disasters tug at the heartstrings of well-intentioned donors, and they use empathy for their benefit. Last year alone, Americans lost more than $5.8 billion to fraud, marking a 70% jump since 2020, according to the Federal Trade Commission.

If you’re passionate about giving back but wary of potential scams, the most important thing you can do is research. Here are a few tips to get you started:

  1. Mitigate fundraiser kickbacks by always sending your contributions directly to the charitable organization – even if it was a professional fundraiser that initially contacted you. This will help ensure that 100% of your gift actually goes to the charity.

  2.  Some charities call potential donors and begin the conversation by discussing the donor’s past contributions to the organization. Or so they say. If you don’t recognize a charity, ask the caller to provide specific details regarding when and how much you gave in the past. Verify this information by researching previous transactions in your bank account, past credit card bills or grant activity history in your charitable accounts. Before giving, confirm for yourself that you’ve supported this particular charity before. If the caller can’t offer any evidence supporting their claim, consider whether you want to support an organization that does not retain accurate donor records – or may resort to deceit for solicitations.

  3.  Another common scam tactic is for an organization to have a similar name as a well-known charity, but no affiliation at all. That way it can request a donation and you’re simply volunteering to hand over money to a fraudster. For example, the National Humane Society is not the same as the Humane Society of the United States. Just because two organizations sound similar doesn’t mean they are both charities; it’s up to individual donors to verify legitimacy. Be sure it is a 501(c)(3) charity and that your donation qualifies for a tax deduction.

No matter the circumstances, it’s important to vet any charity you want to support. Researching each charity you support may seem like an awful lot of work, but there are ways to make the vetting process easier. For example, you can use a website such as GuideStar.org or CharityNavigator.org to research potential charities and even make an online donation.

Of course, if you have a donor advised fund (DAF) with Raymond James Charitable, you can always direct a grant to a charity through your DAF account and be sure that the charity is a qualified organization under the IRS. We research the status of every charity we support. With a DAF account, you can also ask that your donation be anonymous and/or that your address be withheld to prevent future solicitations. When making charitable donations directly, outside of a DAF, it is wise to safeguard your personal information by contacting the charity or making a note on your check instructing the organization not to share your information. 

Keep in mind that personal data is a valuable commodity – both to charities and scammers – so don’t hesitate to keep personal details private. That includes not responding directly to email solicitations or giving out information to phone solicitors. Here’s another pointer: Never let a charity’s representative, legitimate or not, pressure or guilt you into making a donation. If a charitable organization is well-run and has an established reputation, it should not rely on questionable tactics to advance its mission.

We hope you find these tips valuable as you seek the best nonprofits to support. In the end, it’s all about asking the right questions and ensuring a nonprofit’s mission aligns with your values, including when connecting with donors.

 

Tag Cloud