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Giving Tuesday: Make sure charities are effective and watch out for scams

With so much holiday spending and hype, several charities started Giving Tuesday to follow the shopping weekend after Thanksgiving – Black FridaySmall Business Saturday, and Cyber Monday. Giving Tuesday is Nov. 29 this year.

With so many consumers donating this time of year – American charities receiving one-third of their annual donations during the holiday season – care is needed to make sure donations go to worthwhile organizations that operate ethically.

Charities and fundraisers – groups that solicit funds on behalf of organizations – use the phone, face-to-face contact, email, the Internet including social networks, and mobile devices to solicit and obtain donations. Scammers use these same methods to take advantage of your goodwill.

Regardless of how they reach you, the Federal Trade Commission advises consumers to avoid any charity or fundraiser that:

  • Refuses to provide detailed information about its identity, mission, and costs and how the donation will be used.
  • Won't provide proof that a contribution is tax deductible.
  • Uses a name that closely resembles that of a better-known, reputable organization.
  • Thanks you for a pledge you don’t remember making.
  • Uses high-pressure tactics such as 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 wire money.
  • Offers to send a courier or overnight delivery service to collect the donation immediately.
  • Guarantees sweepstakes winnings in exchange for a contribution. By law, you never have to give a donation to be eligible to win a sweepstakes.

Take the following precautions to make sure your donation benefits the people and organizations you want to help.

  • Ask for detailed information about the charity, including name, address, and telephone number.
  • Get the exact name of the organization and do some research. Searching the name of the organization online — with the word “complaint(s)” or “scam”— is one way to learn about its reputation.
  • Call the charity. Find out if the organization is aware of the solicitation and has authorized the use of its name. The organization’s development staff should be able to help you.
  • Ask if the caller is a paid fundraiser. If so, ask: the name of the charity they represent, the percentage of your donation that will go to the charity, how much will go to the actual cause to which you’re donating, and how much will go to the fundraiser.
  • Keep a record of your donations.
  • Make an annual donation plan. That way, you can decide which causes to support and which reputable charities should receive your donations.
  • 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 income tax return.
  • Never send cash donations. For security and tax purposes, it’s best to pay by check — made payable to the charity — or by credit card.
  • Never wire money to someone claiming to be a charity. Scammers often request donations to be wired because wiring money is like sending cash: once you send it, you can’t get it back.
  • Don’t provide your credit or check card number, bank account number, or any personal information until you’ve thoroughly researched the charity.
  • Be wary of charities that spring up too suddenly in response to current events and natural disasters. Even if they are legitimate, they probably don’t have the infrastructure to get the donations to the affected area or people.
  • Ask the local agency if they’ve heard of the group and are getting financial support if a donation request comes from a group claiming to help your local community, for example, local police or firefighters.
  • Check your mobile phone bill if you donate by text. If you've asked your mobile phone provider to block premium text messages — texts that cost extra — then you won't be able to donate this way.

The National Do Not Call Registry gives you a way to reduce telemarketing calls, but it exempts charities and political groups. However, if a fundraiser is calling on behalf of a charity, you may ask not to get any more calls from, or on behalf of, that charity. If those calls continue, the fundraiser may be subject to a fine.

If you think you’ve been the victim of a charity scam or if a fundraiser has violated Do Not Call rules, file a complaint with the FTC, your state attorney general’s office, and the BBB’s Wise Giving Alliance.

Copyright 2016, Rita R. Robison, Consumer Specialist


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