Charitable Giving Scams: How To Protect Yourself From Fraud

Americans are generous in spirit, often seeking to help those who have fallen on hard times. Whether it’s the neighbor whose home was destroyed by fire or those made homeless after a major storm, we like to know how we can help. Local, national, and international charities spread the gift of kindness by delivering much-needed assistance to those in need.

Charitable giving amounts to big bucks in the United States each year. In 2016, Americans gave $390.05 billion. Seventy-two percent of that amount, or $281.86 billion, came from individual donations. That amount is significant not just to the organizations that solicit contributions, but to the economy as a whole. In the same year (2016), charitable giving comprised 2.1% of the U.S. gross domestic product.

Charity fraud may be local or related to national disasters

Calls for donations grow louder when a disaster hits, such as the widespread destruction caused by hurricanes in 2017. Unfortunately, there are some who wish to take advantage of Americans’ generosity. Charity scam artists are attracted to the large amount of money they can make relatively quickly by posing as a non-profit, particularly in the immediate days and weeks following a large-scale crisis.

Nonprofit scams don’t just happen “somewhere else.” Recently, police in Bennington County, Vermont put area residents on alert after receiving reports that a woman claiming to represent “The Collaborative” was soliciting donations. When contacted, the organization said it does not solicit donations in-person.

How to avoid falling victim to a charitable giving scam

Closing your heart and wallet is not necessary to shield yourself from those who prey on generosity and compassion. By following a few key strategies, you can protect your money from charity fraud while making a positive impact on the causes you care about.

1. Do your research. Learn about your charity of interest by reading about its mission, whether donations are tax-deductible, and the percentage of your donation that will go directly to impacting your chosen cause. Check the organization’s reputation by researching it with the Better Business Bureau’s Wise Giving Alliance and sites such as GuideStar, Charity Navigator and Charity Watch.

In addition to conducting general research about the organization, pair its name with words such as “complaint” and “scam” in an Internet search to learn if there is a history of fraudulent activity

2. Know the Right Site. As technology grows more sophisticated, so do scams. When researching an organization, don’t simply follow the first link listed by a search engine. Examine the web address closely–most nonprofit organizations end with “.org” rather than “.com.” You can also use Charity Navigator to identify the legitimate organization’s website.

3. Watch for Warning Signs. If you receive an in-person or telephone solicitation, be wary of any of the following red flags:

• High pressure: If you feel pressured to donate quickly and with little information about the organization, where your money will go and what percentage of your contribution will be used, do not continue the conversation. Your kindness should not result in discomfort.
• The name game: If the name of the charity is similar to but not the same as another well-known charity, proceed with caution.
• Make a call: Call the organization the solicitor claims to represent to see if they have representatives in your community.
• Send me the money: Requests for money to be sent overnight, via a courier service, or overseas are cause for suspicion.

4. Don’t pay with cash. Pay your donation by credit card. By creating a paper trail, you can work with the credit card company if there is an issue with your contribution. If donating by check, always make the payment out to an organization and never an individual. Do not provide important details such as your bank account numbers to any unknown site or organization.

5. Social media stories. If you are active on social media sites, you have seen no shortage of heart-wrenching stories about people in need and grassroots campaigns to help them. Research the groups behind the fundraising to ensure that the money will be used as advertised.

How to Report Charity Scams

If you would like to report a charitable giving scam to the Attorney General in Vermont or New Hampshire, you can do so using the following resources:

• New Hampshire Attorney General’s Office: Charitable Trusts Unit
• Vermont Attorney General’s Office

If you think you’re the victim of a scam, there are a number of steps you can take to protect yourself.

• Alert your credit or debit card issuer: If you paid a donation by credit or debit card, contact your card issuer as soon as possible to alert them to the potentially fraudulent charge.
• If you paid by check or provided your bank account number, close the account immediately.
• If the scam occurred online, you may file a complaint with the FBI’s Internet Crime Complaint Center
• If the scam was via in-person solicitation, contact your local police department or the State Attorney General’s office.

Check out our “Protecting Your Identity” article if you suspect your personal information was compromised.

With a little time and effort invested to ensure that your money gets where you want it to go, your donation and kind heart will pay off.