Avoid Charity Scams: Red Flags, Research Tips, and More

September 22, 2023 2 mins

Charity scams come in all forms, and it may be hard to spot one. Scammers will go to great lengths to look like a legitimate organization, and some charity scams may even be registered nonprofits (501(c)(3)s) using the bulk of their fundraising dollars to pay an executive team – not the communities they are meant to serve.

If you’re not sure if a charitable organization is legitimate, check for red flags, do your research, and always keep your personal information private. Here’s what to look for and how to make sure the organization is legitimate.

Watch for these red flags

  1. The representative (or website) can’t provide details about the charity. If the person you’re talking to (or the charity’s website) can’t tell you specifics on how the money will be used, where the charity is headquartered, what percentage of funds are going directly to the program, or the organization’s tax-exempt (EID) number, they’re probably trying to scam you.
  2. You receive a thank you for a donation you didn’t give – along with a request for more money. If you don’t remember giving, ask for details of the alleged donation, such as the date, amount or form of payment. If they can’t answer those basic questions, they’re probably not associated with the same organization you supported before.
  3. You’re being rushed. If the request seems pushy, it’s probably a scam. A reputable charity won’t use high-pressure tactics – that’s because a reputable charity wants you to feel good about your contribution.
  4. You’re being asked for a donation in the form of cash, gift cards, a wire transfer or a mobile payment app. Scammers prefer these forms of payment because there’s very little chance they’ll be tracked down — and neither you (nor the supposed beneficiaries) will ever see the money.

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If you’re not sure if a charitable organization is legitimate, check for red flags, do your research, and always keep your personal information private.”

How to make safe charitable donations

  1. Research the charity online. Google the name of the organization along with other search terms like “scam,” “review,” “rating,” or complaint. You can also search for stories about the positive impact of the group.
  2. Ask the organization about the success of their charitable efforts. They should have data to support their impact on the community.
  3. Check their status. Check the IRS website to ensure that the charity is a 501(c)(3) and to review their public tax records.
  4. Follow the money. Guidestar.org and CharityNavigator.org can help you see what percentage of donations go directly to the cause – ideally at least 65 percent of its expenses, says the Better Business Bureau1. You’ll also want to see how much they spend on administrative and fundraising expenses.
  5. Is the organization registered to raise money in your state? In California, the Office of the Attorney General regulates charities and professional fundraisers.
  6. Ask for a receipt. Keep the receipt to claim a tax deduction and as proof of your donation in case the organization claims your payment didn’t go through.
  7. Review your accounts. Keep a weekly money date to review your bank and credit card accounts. Make sure you weren’t charged more than you agreed to give or unknowingly enrolled in recurring donations.
  8. Do not share your personal and financial information. Keep your Social Security Number, date of birth, and bank account details private. Fraudsters could use this information to steal your identity or access your finances.
  9. Beware of requests on social media and crowdfunding platforms. The Federal Trade Commission reports that some accounts use real victims’ stories and images to create fake profiles and con people.

1 Better Business Bureau Wise Giving Alliance, BBB Standards for Charity Accountability

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