Giving That Counts

Source: AARP.org | September 1, 2005

Whether it is a hurricane, flood, or wild fire, Americans are very generous in donating money to help the victims of natural disasters. But unbelievably, scam artists use these news headlines to try to take advantage of our generosity. Attorneys General report they hear about scams cropping up almost immediately after any disaster with telephone and email solicitations asking people to send money for recovery efforts. These can be scams designed to steal your money or credit card numbers.

Before you make a donation, be certain that your money is going where you want it to go. Just because someone claims the money will be used on behalf of a charity does not mean your money will really go to that cause or charity.

If you don't know who is asking, don't give.
When a stranger asks for a donation, do not assume that the person is honestly raising money for victims. Con artists say they are raising money on behalf of a legitimate organization, but actually they have no connection with true organizations. Web-based scams may say they are raising money for the Red Cross but then direct people to send their money to a fraudulent account.

Take the time to get more information.
Solicitors may come door-to-door, stand on street corners or in shopping malls, advertise in newspapers or on the radio, send letters or emails, or call on the phone. You may be pressured to give money on the spot, before you have a chance to think. You'll want to know how much of your donation will actually get to the victims, so ask for written financial information before you give.

Avoid "Instant" Charity Web Sites
New web sites can spring up that look on the surface like they are seeking donations. Checking the URL registration might give you a clue as to who is behind the site, but even then there is no guarantee that one cent of your donation would go anywhere other than the pocket of the creator. Watch out for phishing emails pretending to be from a legitimate organization. Inevitably they will direct you to spurious web sites. They only want your bank or credit card numbers to invade your accounts; not to forward your money to disaster victims. Do not click on any link to any site from an email even if the email or the site look legitimate. If you want to give online, type in the charity's web address yourself.

Warning Signs of a Scam

• Appealing to your emotions without saying how the money will help
• Offering to send someone to pick up your contribution
• Requesting your credit card number or bank account
• Failing to explain the operation's administrative costs and programs
• Using a similar sounding name that suggests a well known charity
• Expecting payments for gifts, such as greeting cards, address labels, or religious tokens

Protect your charitable dollars
It is good to be generous, but take precautions to make sure that your dollars get where you want them to go. The California Attorney General reported that in 2007 commerical fundraisers collected $370.33 million from Californians, but just $161.6 million of 43.6% of that money actually made it to the charities. Likewise, just 39 cents of every charitable dollar New Yorkers give actually goes to charity.

• Ask for and review written financial information before making a donation.
• Call your state Attorney General or Secretary of State to see if the charity is registered. In some states, charities must file financial disclosures.
• Pay with a check — not cash — made out to the charity, not the fundraiser.
• Contribute directly to the charity, not the fundraiser.
• Keep written records of your donations and pledges. Check your records if someone says you made a pledge you don't recall.
• Know the difference between " tax deductible " and " tax exempt. " Donations to tax-exempt organizations are not necessarily tax deductible for you. If your donation is tax deductible, get a receipt.
• Don't give your credit card number or any personal information over the phone or in response to an email.

Take Action

• Report charity fraud online with the Federal Trade Commission or with your state Attorney General.
• Check out charities, how much money goes to fund raising, and contact information with the Better Business Bureaus Wise Giving Alliance.
• The Charity Navigator evaluates the financial health of over 5,000 charities.