Throughout the world people believe in spreading holiday cheer by giving to a charity. As this spirit of giving grows, so too do the eyes of scam artists who pose as charitable organizations in order to cash in on the spirit of giving.
According to research from the Center on Philanthropy, the average person makes nearly a quarter of his or her annual donations between Thanksgiving and New Year’s Eve. The FBI warns that this time of year is prime for scam artists to take advantage of people’s generosity. Seniors are particularly targeted by scam artists because they tend to have good credit and a guaranteed source of income in the form of Social Security or other pension benefits.
To help ensure that only real charities benefit from your generosity, consider following these smart giving tips.
Scammers employ several tactics to confuse and pressure seniors. A common ploy is using an organization name similar to a well-known charity or its logo.
Frequently, scammers pressure seniors to donate, both over the phone and in person, by talking quickly and demanding a quick answer. A legitimate charity will always take the time to give you any information necessary about their cause or organization.
Another warning sign is a charity that insists you pay with cash. A legitimate charity will never insist on a cash donation.
Also, Charity Watch, an organization that rates charities, advises people not to feel pressured into donating when they receive gifts such as holiday mailing labels or gift wrapping. Charity Watch reminds people that it is illegal for a charity to demand money for a gift that they did not order.
If a charity says that 100 percent of your donation will go directly to the cause, you should take a closer look at the charity. Charity Navigator, another group that rates charities and serves as a resource for donors, states an efficient charity will spend around 25 percent of donations for administrative costs and fundraising. Therefore, if a charity makes a 100-percent claim, it is likely to be either a scam or a misrepresentation.
Although hearing about these scams may be disheartening, there are ways to ensure your generosity truly goes to those in need.
First, there is no such thing as too much information. If you are not familiar with a charity or it seems suspect, make sure to ask questions. Charities should be happy to give you this information in order to make you feel secure about donating to them.
The Federal Trade Commission advises people to ask if the person soliciting on behalf of a charity is a for-profit telemarketer. The solicitor must disclose that information. Under the Telemarketing Sales Rule, you may ask the for-profit telemarketer the name of the charity, the percentage of the donation that will go to the charity, how much will go to the actual cause, and how much will go to the fundraiser.
If you have more questions, ask the charity to send you their annual report or direct you to information on the Internet. Also, if you do not have access to a computer, ask for a brochure with the charity’s financial information.
Second, a charity may be tax-exempt, but that does not guarantee that your donation is tax-deductible. You can check whether a charity can receive tax-deductible contributions on www.irs.gov and search for “tax deductible charitable contributions.”
Third, the FBI and the FTC suggest paying with a check, or if you must, with a debit or credit card. A check is not only easier to cancel, but easier to track.
Finally, verify that a charity is legitimate. You can check with the California Attorney General at www.oag.ca.gov/charities, or your local Better Business Bureau at http://goldengate.bbb.org/charity/. To research the reputation of a charity you can check online at www.charitywatch.org or www.charitynavigator.org.
If you believe you have been a victim of a charity scam or would like to report a suspicious charity, you can file a complaint with the FTC at www.ftc.gov, the attorney general, or your local Better Business Bureau.
Antonio Valdez is a senior project staff attorney with Legal Services of Northern California.