Tips to Avoid a Charity Scam
Each year, many people make a point to give more to charity. Sometimes, though, donating to charity is more complex than simply writing a check. Considerations include what you want your donation to mean, and how it will get to the charity you choose. Here are some tips to help make sure your dollars do not become subjected to a charity scam.
Get to Know a Charity Before You Give
When considering what organization to support, you can likely think of many different candidates. So, it may be a good idea to do a little research to understand which causes or organizations best align with your interests and goals. USA.gov warns that donors should be wary of fraudsters who have set up organizations under names that are similar to more well-known and real charities. Also, consider checking with the attorney general’s office in your state or the Better Business Bureau (BBB) to see records on the charity and if any complaints have been made against them, adds USA.gov.
Learn How Your Money Will Be Spent
Charities have a variety of needs, from covering employee costs to funding the programs that actually comprise their charity work, so the BBB advises that potential donors should check to make sure that they understand and are comfortable with how the charity of their choice will spend their donated dollars. The BBB’s Give.Org, CharityNavigator and GuideStar all publish information on the financial management and legal history of many charities adds, the Federal Trade Commission (FTC). The BBB also reminds donors that sometimes lower spending by a charity on its employee and management costs does not always mean that a charity is more effective. The BBB states that a 30 to 35 percent administration cost isn’t out of the ordinary, as long as you align with the charity’s mission.
Consider Other Ways to Give
Sometimes the best support that a person can provide comes from a donor’s professional skills or time instead of cash. Imagine a Saturday afternoon spent teaching basic business skills to children or helping your favorite local charity with its bookkeeping. Services like VolunteerMatch and LiteracyWorks can help you to consider how your interests, strengths and abilities might best support a charity.
Review the Tax Rules
Charities may also be in need of non-monetary items like clothing or household items. However, the IRS cautions that donors interested in donation-related tax deductions should be aware of the IRS rules. Clothing and household items are required to be in good condition when donated, and the charity should provide the donor with documentation of all items donated, the IRS says. The BBB asks that donors check to confirm their charities’ needs before donating these items, because charities spend millions of dollars annually sorting through and disposing of donated but unneeded or unacceptable items.
Watch Out For Solicitors
Take care that swindlers don’t spoil your sense of charity. Be careful with callers who ask you to donate to their charity, says the FTC, which advises you to ask callers to put their request and information about their charity in writing. Never give your personal, credit card or bank information to a telephone solicitor, adds the FTC, and be wary of couriers that offer to stop by your home to pick up your donation. The FTC adds that you should also be careful around door-to-door solicitors or anyone else that tries to make a “high-pressure, emotional pitch” for your donation.
In addition, watch out for organizations that say they are representing an organization like the police or fire department that you know is already publicly supported. A simple phone call to that department can confirm to you whether a charity you’re considering is actually affiliated with that department through a legitimate social organization like a union for government employees, says the FTC.
If you suspect an organization is acting inappropriately, the FTC asks that you please file a complaint here.
Originally published on January 30, 2014.