Watch out for charitable fundraising scams

How the Scam Works

You receive a solicitation from a charity that claims it is collecting donations to help a cause. It may be a postcard, an email, a social media post, a call or even a person going door-to-door. Increasingly, scammers are creating fake social media accounts, even going so far as to impersonate victims of a tragedy or their family members to ask for direct support.

Charity fraud varies from outright scams to a misrepresentation of how much money actually goes to the charity’s clients. 

Advisory tips for donors

Find out what they do. Don’t assume what the organization does based on their name alone or assume your friends have vetted the charities they ask you to support. Review the appeal carefully and see if it matches the mission, program and financial information on the organization’s website. Ask for specifics about how and where it is working.

Watch for mistaken identity. Watch out for name confusion. Many charities include virtually the same words in different order or slightly different form to fool you into donating.  

Avoid on-the-spot donation decisions. Be wary of excessive pressure in fundraising. Don’t be pressured to make an immediate on-the-spot donation. If you have any hesitation, ask them to send you information regarding the organization and how to donate.

Recognize telemarketing cautions. Telemarketing can be a costly method of fundraising unless carefully managed. Ask questions like: Are you employed by the charity or a marketing firm? What percentage of my contribution goes directly to the cause? and What percentage or amount of my contribution pays for the solicitation? If interested in a call on behalf of a charity, always check out the organization online before donating.

Be wary of unusual donation transaction options. Watch out if a charity solicitor asks for donors to send contributions using an unusual transaction method such as wire transfer, gift cards or pre-paid debit cards. This could be a ruse to enable questionable solicitors to get funds quickly.

Learn how donated items will be used. If a charity is soliciting for used clothing, cars, furniture and other in-kind gifts, find out how they benefit. Sometimes the charity receives only a small portion of the resale price of the item or may have a contractual arrangement to get a flat fee for every household pick-up, no matter what the contents.

Seek out financial information. Verify the accuracy of financial information in an organization’s appeals. Review the charity’s website for its latest financial information. 

Understand that only donations to qualified, registered charities are tax deductible. Direct contributions to needy individuals are not deductible and crowdfunding sites are rarely deductible. If this is a consideration, you can check an organization’s tax status at: www.irs.gov/charities-non-profits/exempt-organizations-select-check. 

Learn more

For more tips on giving to charities including mailing list removal, car donations, and sweepstakes appeals, visit BBB’s Give.org, Giving Guidance & Tips. We want to encourage giving at all levels, but we want to ensure your contributions are being used as you intend.

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Marybeth Stevens has been the president of BBB Paso del Norte since December 2016. She is a graduate of Leadership Texas 2015.