From the Compass: How to Vet a Charity Before Donating

Before Giving to a Charity

If you’re considering a request for a donation to a charity, do some research before you give. By finding out as much as you can about the charity, you can avoid fraudsters who try to take advantage of your generosity. Here are tips to help make sure your charitable contributions are put to good use.

Signs of a Charity Scam

These days, charities and fundraisers (groups that solicit funds on behalf of organizations) use the phone, face-to-face contact, e-mail, the Internet (including social networking sites), and mobile devices to solicit and obtain donations. Naturally, scammers use these same methods to take advantage of your goodwill. Regardless of how they reach you, avoid any charity or fundraiser that

Refuses to provide detailed information about its identity, mission, costs, and how the donation will be used
Won’t provide proof that a contribution is tax deductible
Uses a name that closely resembles that of a better-known, reputable organization
Thanks you for a pledge you don’t remember making.
Uses high-pressure tactics like trying to get you to donate immediately, without giving you time to think about it and do your research
Asks for donations in cash or asks you to wire money
Offers to send a courier or overnight delivery service to collect the donation immediately
Guarantees sweepstakes winnings in exchange for a contribution—By law, you never have to give a donation to be eligible to win a sweepstakes

Charity Checklist

Take the following precautions to make sure your donation benefits the people and organizations you want to help.

Ask for detailed information about the charity, including name, address, and telephone number.
Get the exact name of the organization and do some research. Searching the name of the organization online—especially with the word complaint(s) or scam—is one way to learn about its reputation.
Call the charity. Find out if the organization is aware of the solicitation and has authorized the use of its name. The organization’s development staff should be able to help you.
Find out if the charity or fundraiser must be registered in your state by contacting the National Association of State Charity Officials at http://www.nasconet.org/.
Check if the charity is trustworthy by contacting the Better Business Bureau’s (BBB) Wise Giving Alliance (http://give.org/), Charity Navigator (http://www.charitynavigator.org/), and Charity Watch (http://charitywatch.org/).
Ask if the caller is a paid fundraiser. If so, ask
- The name of the charity that the fundraiser represents
- The percentage of your donation that will go to the charity
- How much will go to the actual cause to which you’re donating
- How much will go to the fundraiser
Keep a record of your donations.
Make an annual donation plan. That way, you can decide which causes to support and which reputable charities should receive your donations.
Visit this Internal Revenue Service (IRS) Web site at http://apps.irs.gov/app/eos/ to find out which organizations are eligible to receive tax-deductible contributions.
Know the difference between tax exempt and tax deductible. Tax exempt means the organization doesn’t have to pay taxes. Tax deductible means you can deduct your contribution on your federal income tax return.
Never send cash donations. For security and tax purposes, it’s best to pay by check made payable to the charity or by credit card.
Never wire money to someone claiming to be a charity. Scammers often request donations to be wired, because wiring money is like sending cash: Once you send it, you can’t get it back.
Do not provide your credit or check card number, bank account number, or any personal information until you’ve thoroughly researched the charity.
Be wary of charities that spring up too suddenly in response to current events and natural disasters. Even if they are legitimate, they probably don’t have the infrastructure to get the donations to the affected area or people.
If a donation request comes from a group claiming to help your local community (for example, local police or firefighters), ask the local agency if it has heard of the group and is getting financial support.
What about texting? If you text to donate, the charge will show up on your mobile phone bill. If you’ve asked your mobile phone provider to block premium text messages (texts that cost extra), then you won’t be able to donate this way.

Charities and the Do Not Call Registry

The National Do Not Call Registry (https://donotcall.gov/) gives you a way to reduce telemarketing calls, but it exempts charities and political groups. However, if a fundraiser is calling on behalf of a charity, you may ask not to get any more calls from, or on behalf of, that specific charity. If those calls continue, the fundraiser may be subject to a fine.

Report charity scams.

If you think you’ve been the victim of a charity scam or if a fundraiser has violated Do Not Call rules, file a complaint with the Federal Trade Commission. Your complaints can help detect patterns of wrong doing and lead to investigations and prosecutions.

U.S. Federal Trade Commission. (2012, June). Before giving to a charity. Retrieved August 8, 2016.