Tragedies unfortunately bring out scam artists that want to take advantage of people’s emotions and generosity during a time of crisis. The IRS issued an alert to warn consumers about charity scams in the wake of the mass shooting in Orlando, FL. Knowing how to avoid a scam is the first step in making sure that your money goes to a worthy and reputable organization for your intended purpose. Whether by phone, mail, email, or personal solicitation, follow these precautions when making charitable donations:
- Be cautious about groups that are specific to a single event or natural disaster. It takes time for charities to get the required exemptions and infrastructure in place that qualify them as tax deductible and have the ability to actually deliver goods or services to those affected by a disaster.
- When donating to a new charity or one that is new-to-you, ask for the exact name of the organization, address, and phone. Search online for the organization online, combining with the word ‘scam’ or ‘complaint’ to see what pops up.
- Make your own call to the charity to ask if the organization’s development staff if they are conducting a solicitation. For example, if a donation request comes from a group claiming to help your local community (for example, local police or firefighters), and you want to give, first make a call to the local agency. Ask if they have heard of the group and are seeking financial support.
- Use resources to find out if the charity or fundraiser is legitimate:
- The National Association of State Charity Officials can tell you if the charity has the necessary state requirements.
- The Better Business Bureau’s (BBB) Wise Giving Alliance, Charity Navigator, Charity Watch, or GuideStar all have listings for legitimate charities.
- An Internal Revenue Service (IRS) webpage also lists organizations that are qualified to receive tax deductible contributions.
- Find out the following information before donating to fundraisers. You may still want to donate to the fundraiser, or you may prefer to make a direct donation to the cause.
- The exact name of the charity.
- The percentage of donation that will go to the charity and/or specific cause.
- The percentage used for fundraiser expenses.
- Be careful how you pay. Never send cash donations or wire money. It’s best to pay by a check (made payable to the charity) for recording purposes and security. Credit card payments are also a good way to pay after you’re confident about the legitimacy of the organization.
- Beware of emails and/or fake Websites that use names similar to legitimate charities. Report suspected online scams to the IRS.
- Keep your own record of all donations. Charities must provide a receipt for currency donations of $250 and more.
It’s a good feeling to be generous, and there are many worthy causes. Follow these tips to make sure that your money is used as you wish.