Many people are excited by the prospects of supporting causes they care about. Charitable donations are how millions of people across the globe express such support, and many charities would not be able to function without donors.
Taking advantage of an opportunity to help others is fulfilling and exciting. It can be easy to get caught up in the emotion of giving let your guard down. Doing so opens prospective donors up to charitable fraud, which makes victims of both donors and the people and organizations they want to help. The Federal Trade Commission notes the following are some potential indicators of giving scams.
- Poor reports and ratings: Various organizations report on charities, sharing information about how they use donations and how successful their programs are. Give.org, GuideStar.org, CharityWatch.org, and CharityNavigator.org are some examples of organizations that vet and/or rate charities. Reports are accessible online, and donors should utilize these before giving to ensure their dollars do the most good.
- Unusual payment requests: It’s a big red flag if charities ask for donations via gift card or wire transfer, or if they insist donations be made over the phone. When making donations, the FTC strongly advises donors only submit payment via credit card or personal check. In addition, donors should simply hang up the phone if organizations insist on immediate payments.
- Look-alikes: Some perpetrators of charitable fraud are successful because they set up charities with names that are only slightly different from reputable, widely recognized charities. Before making any donations, donors should make sure the charity they’re giving to is the one they intend to help, and not a look-alike, fraudulent organization.
- Evasiveness about where donation dollars are going: Transparency is a good sign when it comes to gauging the reputation of charitable organizations. Reputable organizations should be willing to indicate exactly where you’re donation dollars go. In fact, many take a proactive approach and include such information on their websites. Reconsider donating to any organization that appears hesitant to share how donation dollars are spent.
- Online donations: While most organizations allow donors to submit donations via their websites, before donating online, check the fine print to determine how much of your donation is going toward fees or other charges. Excessive fees is not necessarily indicative of fraud, but they can divert money from the cause you’re hoping to help. Donating via personal check or over the phone using a credit card may ensure more of your money goes to the cause and not the cost of maintaining a website and processing online donations.
Recognizing signs of charitable fraud can help donors donate wisely. More information about charitable fraud is available at www.consumer.ftc.gov.