3 Major Charity Scam Red Flags
You’ve probably already received several letters and phone calls from charities asking for donations. Most requests are from legitimate organizations. Some, however, are bogus charities set up by con artists who use the holiday spirit to their financial advantage.
Last year, Americans gave nearly $428 billion to charities, according to Giving USA 2019: The Annual Report on Philanthropy for the Year 2018. That's a huge incentive for fraud.
If you're planning to donate, take some time to learn how to spot a charity scam. Here are a few big red flags:
- Popup charities. Every legitimate charitable association started sometime, and some are still being formed. But natural disasters, endemics and calamities of every type — from Hurricane Dorian to the Ebola virus — seem to spawn an inordinate share of fake charities. You can avoid these popup scams by donating to charities that you trust, which generally means those with a proven track record. If you're unsure, check out the organization with the Better Business Bureau, Charity Navigator, GuideStar or similar watchdog group.
- Evasive answers to fundraising questions. A legitimate caller should be upfront about their charity, the percentage of funds allocated to administration and marketing, and what target groups will be aided by your donation. Whether you're giving to provide medical supplies, support research or some other worthy cause, don't be afraid to ask direct questions and expect direct answers. If the fundraiser seems to hedge their responses or knows little about the supposed cause to which you're contributing, consider a different charity. Beware of vague claims like "educating the public" or "promoting awareness."
- Urgent email requests. Websites made to mimic legitimate charities have conned many otherwise careful contributors. Emails asking for money on a deadline may originate from the backroom computer of a scam artist. Never divulge your financial information via email. Call the charity directly and find out if it's registered in your state (if required). Ask for written information. When in doubt, check it out.
Many charitable organizations are seeking your aid to address genuine hardships. Avoid the schemes of unethical scammers, and your donations will provide help where it's needed most.
If you think you’ve been contacted by a bogus charity, let the Federal Trade Commission know by filing a complaint.