The Nine Signs of a Charity Scam
Whenever disaster strikes there are many who want to give to those that have been struck with great misfortune. In fact so many are willing to give to victims of earthquakes, hurricanes, and other natural disasters that others try to take advantage of this natural charitable trait. All sorts of organizations suddenly spring up overnight it seems, ready to help you send your hard earned money, cans of food, piles of clothes, or other donations to the people and the place where it is needed the most. However, all these new charities competing for your donation make it hard to determine who can best receive your donation and put it to the best use. So how can you make sure that you are giving to a legitimate charity organization? According to the Federal Trade Commission, there are 9 warning signs:
- The organization does not give out written information about its identity, its mission, its costs, and how the donation will be used. A legitimate organization will have no trouble providing this information.
- The charity will not provide proof that your contribution is tax-deductible.
- Scammers try to confuse the public by naming their organization to resemble a legitimate top charities. For example the American Cancer Society is a well known research organization that does wonderful work in the area of cancer research and awareness. Be sure that when you donate to this organization, that you are giving to the American Cancer Society and not the United States Cancer Association which does not exist to my knowledge.
- You get a letter or phone call thanking you for your donation (even though you don't remember making a contribution to the aforementioned program) then they ask if you might want to donate some more. This one is pretty slick.
- If someone calls you on the phone saying that they are asking for donations for earthquake victims in Haiti then asks for your bank account number or credit card number before you have reviewed the organization's information or even gave consent to donate...beware!
- Any organization that uses high-pressure tactics or puts a guilt trip on you to donate is a warning sign.
- Any organization that asks you to donate in cash is a big red flag.
- An organization that will send out a courier to collect your donation with such urgency is suspect.
- Don't fall for solicitations where they promise a guarantee of sweepstake winnings in exchange for your donation. Under US law, you are not required to donate in order to be eligible to win a sweepstakes.
There are several resources that you can use to determine whether a charitable organization is legitimate. The following are referred by the FTC and their links and descriptions are below:
BBB Wise Giving Alliance is affiliated with the Better Business Bureau
The American Institute of Philanthropy
Charity Navigator is based in New Jersey
Guidestar based in Virginia
Once you have checked the organization using any or all the above resources, you will be in a better position to make prudent choices about your donations.
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