Feeling In a Giving Mood?
Most of us are this time of year, and for those of us who can afford charitable donations, the list of takers is long – and can be confusing.
The Federal Trade Commission (FTC), the nation’s consumer protection agency, says it’s wise to be cautious when making your donation decisions so you can avoid scams that try to take advantage of your generosity.
Consider the following precautions to help ensure that your donation dollars benefit the people and organizations you want to help.
- Be wary of charities that spring up overnight in connection with current events or natural disasters. They may mean well, but they probably don’t have the infrastructure to get the donations to the affected areas or people.
- Ask for written information about the charity, including name, address, and telephone number. A legitimate fundraiser will send you information about the charity’s mission, how your donation will be used, and proof that your contribution is tax deductible.
- Contact the office that regulates charitable organizations in your state to see if the charity or fundraiser must be registered. For a list of state offices, visit www.nasconet.org/agencies. Your state office also can verify how much of your donation goes to the charity, and how much goes to fundraising and management expenses.
- Don’t be shy about asking who wants your money. If you’re solicited for a donation, ask if the caller is a paid fundraiser, who they work for, and the percentage of your donation that will go to the charity and to the fundraiser. If you don’t get a clear answer — or if you don’t like the answer you get — consider donating to a different organization.
- Call the charity. Find out if the organization is aware of the solicitation and has authorized the use of its name. If not, you may be dealing with a scam artist.
- Check with local recipients. If giving to local organizations is important to you, make sure they will benefit from your generosity. If a charity tells you that your dollars will support a local organization, like a fire department, police department, or hospital, call the organization to verify the claim.
- Watch out for similar sounding names. Some phony charities use names that closely resemble those of legitimate organizations. If you notice a small difference from the name of the charity you intend to deal with, call the organization you know to check it out.
- 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 tax return. Even if an organization is tax exempt, your contribution may not be tax deductible. If a tax deduction is important to you, ask for a receipt showing the amount of your contribution and stating that it is tax deductible.
- Look twice at organizations that use meaningless terms to suggest they are tax exempt charities. For example, the fact that an organization has a “tax I.D. number” doesn’t mean it is a charity; every nonprofit and for-profit organization must have a tax I.D. number.
- Trust your gut — and check your records if you have any doubt about whether you’ve made a pledge or a contribution. Callers may try to trick you by thanking you for a pledge you didn’t make. If you don’t remember making the donation or don’t have a record of your pledge, resist the pressure to give.
- Refuse high pressure appeals. Legitimate fundraisers generally don’t push you to give on the spot.
- Consider the costs. When buying merchandise or tickets for special events, or when receiving “free” goods in exchange for giving, remember that these items cost money and generally are paid for out of your contribution.
- Do not send or give cash donations. Cash can be lost or stolen. For security and tax record purposes, it’s best to pay by check — made payable to the charity, not the solicitor. If you’re thinking about giving online, look for indicators that the site is secure, like a lock icon on the browser’s status bar or a URL that begins “https:” (the “s” stands for “secure”).
Source: United States Federal Trade Commission