Don’t get Scammed when Donating after a Disaster

By , Posted on Jun 17, 2013
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With the natural disasters of late many people are coming to the rescue of their fellow man with mostly financial donations.  Unfortunately, the scammers turn out in force when a disaster hit, attempting to relieve uninformed contributors of their money.

The legitimate charities have a lot of competition from scammers who either collect for a charity that either doesn’t exist or are dishonest about how your donations will be used or where they will be going.

Just like legitimate charities, they ask for donations by phone or mail, through social media, via email and websites or even in person.  In order to weed out these scammers and make sure you are donating to a legitimate charity, there are a few things you need to keep in mind:

  • Be sure to donate to charities that you already know and trust. Be on the lookout for charities that seem to have just sprung up overnight right after a current event, like a natural disaster.
  • If you receive a phone call soliciting for donations, ask the caller who they work for, and what percentage of your donation goes to the charity and to the fundraiser. If they cannot provide you with a clear answer, or you don’t feel comfortable with the answer you get, the smart thing would be to look for a different organization to donate to.
  • There is no reason to give out your personal or financial information. This includes your bank information or credit card or checking account numbers. Unless of course you know for sure the charity is reputable.
  • Whatever you do, do not send cash.  You have no way to be sure the organization received your donation, not to mention you won’t have a receipt for tax purposes.
  • If you are considering donating to a charity that you are not familiar with, you can check them out with the Better Business Bureau’s (BBB) Wise Giving Alliance, Charity Navigator, Charity Watch, or GuideStar.
  • To find out if the charity or fundraiser is or is required to be registered in your state, contact the National Association of State Charity Officials.

Be sure to avoid any charity or fundraiser that:

  • Will not provide detailed information about its identity, mission, costs, or how the donation will be used.
  • Is unable to provide you with proof that a contribution is tax deductible.
  • Uses a name that closely resembles that of a better-known, reputable organization. i.e. “Big Red Cross”, “The Salutation Army”, “UNICEEF” …You get it.
  • Thanks you for a pledge or previous donation that 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 use Western Union or to wire them the money.
  • Offers to send a courier or overnight delivery service to collect the donation immediately.

The IRS provides a “search” for IRS approved charities. Don’t stop there, however. Even if your charity is listed, you may need to hunt further to get information about how effective and efficient the charity is.

It is important to note that not all charitable causes are registered with the IRS. If you give to a small, local cause that does not enjoy tax-exempt status, just make sure that you know something about the people who are asking for your money.

Many causes spring up, run their course, and go away. That doesn’t mean that they are illegal or fraudulent. When you get your car washed by a group of local high school kids to help them take their band to the Rose Bowl Parade, that may be just fine. Just be sure that the group has the backing of its school or some other community organization.

It is our nature as Americans to give to those in need; it is a cherished American tradition. Just make sure you don’t get ripped off…make every effort to be sure your charitable donation is going where it can do the most good.

 

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