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May 15, 2008

Don’t get taken in by charity scams

Devastating natural disasters like the recent cyclone in Myanmar and the earthquake in China move many to reach into their pockets to help. They also bring out the opportunists who seek to cash in on that benevolence through scam charities. So before you donate money, make sure you’re giving to a legitimate organization, warns the Federal Trade Commission and Better Business Bureau.

Bogus groups solicit donations using e-mail, telemarketing, and other methods. In the past, scam organizations have sprung up just hours after a disaster.

The FTC offers a charity checklist that's worth reviewing before you give. The BBB has issued a warning about potential fund-raising scams in connection with the crisis in Myanmar

Here are some things to keep in mind:

  • Be careful about giving online, especially in response to unsolicited e-mail, which may contain links to phony Web sites that resemble those of well-known charities.
  • Don’t provide credit card information until you’ve reviewed all the information from the charity, including details about how the donation will be used.
  • If you’re being solicited by a telemarketer, contact the charity directly to make sure the solicitation is authorized. Ask how much of your donation will go to the organization, as opposed to the fund-raising firm.
  • Find out if the charity is providing direct, on-the-ground relief or simply raising money for other charities. Get information at InterAction, the nation’s largest coalition of international relief organizations.
  • Find out whether the donation is tax deductible and, if so, ask for a receipt stating the amount and its deductibility. (Just because an organization is tax-exempt doesn’t mean a donation automatically is deductible.) To be safe, donate to a U.S.-based charitable organization that’s tax-exempt under section 501(c)(3) of the Internal Revenue Code. See IRS Publication 78 for a current list of organizations eligible to receive contributions deductible as charitable gifts.
  • Avoid donating cash.

Beyond these recommendations, you can ensure that the bulk of your donation goes to good works by giving the money directly to the charity, rather than through professional fund-raisers.

Also, check out well-known national organizations by visiting the Web sites of the Better Business Bureau or one of the other leading charity watchdogs. The Consumer Reports Money Adviser newsletter offers additional advice. —Anthony Giorgianni


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Comments

Well, to be honest I only donate to sites that I trust like Google or Yahoo. Other than that, sorry I just don't trust them.

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