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Giving Wisely

Some Tips to Avoid Charity Scam

by Sue Hardie

With the recent devastating earthquake in Nepal we are confronted with emotionally compelling images and pleas for help from dozens, if not hundreds, of charities and aid organizations. The solicitations for donations reach us in every possible way – via telemarketing, mail, texts, emails, Facebook, radio, television, Twitter, and more. We typically view charities as morally correct and upstanding. We don’t hesitate at the idea of donating money to one and often feel guilty when we don’t. As a matter of fact, the vast majority of Americans make significant charitable donations every year. But, who can we trust and when should we open our wallet?

How much of my donation will get to those in need? Of course, every charity has salary, overhead and fundraising costs. But several watchdog organizations say charities should spend no more than 35 percent of the money they raise on fundraising expenses. Some of the worst charities in this country funnel as much as 83% of their cash into the pockets of solicitors. Many of these use names that mimic the names of reputable organizations. The biggest difference between good charities and the nation’s worst is the bottom line. However, don’t be seduced by claims that 100% of donations will go to relief efforts. That is highly unlikely and should be a red flag to the potential donor.

give wiseWhat are some easy ways to identify a legitimate charity? Well-run charities rely on their own staff to raise money from a variety of sources. They spend most of their donations on easy-to-verify activities, whether it’s running soup kitchens, supporting cancer research, building homes or providing medical care.

How can I determine if a website is valid? Most non-profit web addresses end with .org and not .com. Avoid web addresses that end in a series of numbers. Also, bogus sites often ask for detailed personal information such as your social security number, date of birth, or your bank account and pin information. Be extremely skeptical of these sites as providing this information makes it easy for them to steal your identity.

Should I be skeptical of email solicitations? As a general rule, legitimate organizations do not solicit funds through email. Many scams use the names of actual organizations and include a link to a website where you can make a donation. Do not follow any links within the message; these tend to be fake websites that are made to look like the organization’s official site. An organization requesting that you send funds to a foreign bank is always bogus.

Social networking makes it easy and convenient to donate. So, whats the risk? Social networking tools deliver heart-wrenching pleas to donate to charitable causes to our computers and phones. While these tools can inspire your desire to help, you should not blindly give via these vehicles. In fact, you should never give your credit card, password or other personal information via these requests for support. Instead, take the time to investigate the groups behind such pleas for help to ensure that it comes from a legitimate nonprofit and then go to that charity’s website to make your donation to them directly.

Give to a charity you know and trust. Don’t let an unscrupulous charity take advantage of your goodwill. Find a charity with a proven track record of success with dealing with the type of disaster and in the region in which the disaster occurred. Avoid fly-by-night charities created specifically to deal with the new crisis. Even well-meaning new organizations will not have the infrastructure and knowledge of the region to efficiently maximize your gift. If you do feel compelled to give to a new charity, be sure to get proof that the group is in fact a registered public charity with 501 (c) (3) status.

For more information about giving wisely visit:

Charity Navigator (http://charitynavigator.org/)

Guidestar (http://www.guidestar.org/)

Better Business Bureau’s Wise Giving Alliance (http://www.give.org/)

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