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How to Avoid Being Scammed by a Charity: 10 Safety Tips Every Donor
America’s spirit of giving and helping is a marvel and an inspiration. In 2012 more than a million charities received over 316 billion dollars in contributions, with $223 billion of it given by individuals. Unfortunately, numbers like these also inspire operators who see charitable giving as the closest thing to "free money" they'll ever find – and decide to share in the bounty through deceptive practices.
Donors can protect themselves, and ensure their hard-earned money is invested in worthy charitable endeavors, by following these steps:
1. Hang up the phone.
It’s important to understand that for-profit fundraisers are used in charitable telemarketing campaigns, and they keep a large portion of each dollar they collect. Just how much they keep varies from charity to charity, but it can be as much as 85 or 95 cents of every dollar they raise. In fact, there are cases where the charity ends up paying the telemarketing firm more than the firm raised on behalf of the charity! So, when you get that call at dinnertime, don't fall for their appeal to support causes that tug at your heart – such as sick kids, firemen, police, and veterans. Instead, hang up the phone.
2. Be careful of sound-alike names.
With 1.4 million U.S. nonprofits in existence, it’s easy to see how uninformed donors can be confused by charities that have strikingly similar names. The sound-alike names are often intentional – calculated to trade on the trust enjoyed by established charitable organizations and capture contributions from donors who assume they’re giving to the recognized charity rather than an imitator.
3. In times of disaster give to an established charity.
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.
4. Be careful of email solicitations.
Be suspicious of unsolicited emails. Criminals use email pleas for help as a way to get you to open an attachment or click a link. This could expose your electronic device to a virus or trick you into revealing your personal and financial information. Be especially leery of people that contact you claiming to be a victim of a tragedy. Anyone claiming to be in this position is most likely part of a scam.
5. Seek out the charity’s authorized website.
With today's cheap technology, it is easy for criminals to set up bogus charity sites to steal the identity and money of generous and unsuspecting individuals. An example of this was after Hurricane Katrina when the FBI reported that 4,000 sites were created to do just that. So, if you plan to give online, be sure to find the charity’s legitimate site. You can start at Charity Navigator where we link to the charity websites.
6. Don't succumb to pressure tactics.
Great charities don't need to pressure donors into supporting their cause: their good work and financial health speaks for itself. So don't hesitate to say no, hang up the phone, or walk away if someone tries to pressure you into making a donation.
7. Verify claims that you've previously donated.
Fundraising appeals will often reference your last donation as a way to thank you for your generosity and inspire you to give more. But unscrupulous and aggressive fundraisers will sometimes use this tactic even if the person hasn't donated in the past. So be sure to check it out for yourself. Look up previous entries in your checkbook or past credit card bills and confirm that you've supported a particular charity before.
8. Gifts do not require reciprocation.
Just because you received some mailing labels, cards, or an umbrella doesn't mean you're required to reciprocate with a donation. In fact, that might not be a charity you want to support at all if they are spending so much money on mailing potential donors 'premiums.'
9. Protect your personal information.
If you make lots of small donations, then there’s a high probability that the organizations will sell or trade your contact information with other charities. This is how your mailbox ends up filled with appeals from charities you've never heard of. Prevent this from happening by a), picking just a few charities and making more substantial donations and b), telling the charities upfront that you do not want them to share your personal information with anyone else. At Charity Navigator each of our charity evaluations includes an assessment of the charity's willingness to enable you to opt-out of such practices.
10. Do your homework.
Most importantly, before you support any charity, you should vet them to assess their a) Financial Health, b) Accountability & Transparency and c) Results Reporting. Charity Navigator offers free ratings that evaluate the Financial Health and Accountability & Transparency of more than 7,000 charities. And Charity Navigator has begun to collect data on each charity's quality of reporting its results.
These ten steps are essentially about one thing: being an informed and proactive investor in charitable causes rather than a passive and uninformed giver. Essentially, the best way to avoid a scam is by taking the time to identify a few great charities that are doing the work that matches your philanthropic passions, and sticking with them over time. This enables you to easily say "no" to other pleas for support which may or may not be scams.
Now, go do your homework, find an effective charity, and give generously.
About the author
While care and judgment have gone into the preparation of this article, neither PeopleClaim nor the author can make representations as to its accuracy or completeness. Opinions expressed are those of the author and are offered as opinion, not fact. Readers assume full responsibility in taking action based on information, opinion, or advice offered. PeopleClaim does not independently verify or specifically endorse the article's content, and is not responsible for errors, omissions, or the consequences of advice taken.
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