Nonprofit organizations and charities do extensive work to help people and fulfill their missions.
When commercials, emails or direct mail pamphlets tug at the heartstrings, it's understandable to want to help as quickly as possible. But just as there are scores of legitimate organizations banking on the generosity of willing donors, so, too, are there scam artists hoping to exploit that generosity. These crooks not only prey on innocent donors, they indirectly steal from people affected by disasters poaching donations meant for relief organizations.
The American Grandparents Organization says Americans donate upwards of $300 billion to charities each year. These include well-known and well-established charitable groups and crowdfunding sites like GoFundMe. Statistics Canada says Canadians make roughly $11 billion in charitable donations each year.
While the majority of donations end up in the right hands, charity scammers still manage to victimize unsuspecting individuals. Follow these tips to make sure hard-earned money is going to reputable groups and not to criminals preying on your generosity.
• Start by doing research. Charity Watch and Charity Navigator, each of which is recommended by the Federal Trade Commission, have carefully researched many different charities. This can be the first stop in verifying the legitimacy of a particular charity. Check for a charity's registration number and see if it's registered on the Better Business Bureau website at www.bbb.org/us/charity.
• Don't give to cold calls or emails. It's best to take your time with charitable requests and confirm their authenticity. This may require visiting the website of a particular group or contacting them directly to see how you can help. You never know who is on the end of a phone call or who sent an email soliciting donations. What's more, according to Charity Navigator, cold calls are usually conducted by for-profit telemarketers that have contracted with charities. These contracts are not favorable to the charities — with up to 95 cents of every donated dollar going to the telemarketers.
• Don't give cash donations. Cash is difficult to trace, making it a preferred method of donation collection among scam artists. If a charity is insisting on cash or wants you to make a decision immediately, this should raise red flags.
• Protect your privacy. Only work with charities that respect your privacy and will not sell your name or information to other groups.
• Request information. Reputable charities will tell you how they will spend your money and if your gift is tax-deductible.
• Be aware of sound-alike groups. Some scam artists create sound-alike organizations to trick donors. In such instances, donors believe they are donating to legitimate charities but are really giving to another organization. In 2016, the Federal Trade Commission brought charges against four sound-alike cancer groups, highlighting just how prevalent such faulty organizations are.
Charity scams are prevalent. But by being diligent about researching and gaining information, donors can avoid parting with their money unnecessarily.