'Tis the season to engage in a little extra charitable giving, and while the vast majority of philanthropies are legitimate, some are not and take advantage of people who may not be savvy about today's online donation protocol, or have difficulty discerning the good ones from the fraudulent.
...Secure Your Personal Info
Let them know that you will keep giving only if they solicit you just once a year and that you wish to have your name removed from any lists they share. Any charity/organization that does not abide your clearly stated wishes must be removed from your giving list.
Oh, and of course, when donating online make sure the site is secure by looking for the "s" at the end of the "http" (https means you're now in a secure session that cannot be accessed by hackers).
...Some Financial "Auditing" of Your Own
"You want to look at the charity’s Form 990—the informational tax return that they submit to the IRS. By law, they have to give it to you if you ask," says Sandra Miniutti, Vice President of Marketing at Charity Navigator. "If they’re hesitant to give it to you for any reason, that’s a red flag."
Look at exactly how they use donated funds. "First, know how your money is being used specifically; research?...education?...directly to people in need?" says Kalivas. Second, no more than 25% can go to fundraising and administration (no more than 15% to admin only).
One exception to the 990 rule: Houses of worship (including Salvation Army), don’t have to file them. "MinistryWatch.com does rate churches and big religious groups," says Miniutti, but there are few recognized resources beyond that.
...Be Wary of Solicitations After a Tragedy
Unfortunately, scammers exploit our notable kindness shown when disaster strikes. "The FBI found 4,000 websites all with variations on the name 'Hurricane Katrina' even before it made landfall, and many were run by criminals overseas," says Miniutti.
"In times of disaster, we recommend not going with a small charity or new group," she says. The group may not have bad intentions, but the odds of it having the resources and infrastructure to support a large-scale relief effort aren’t great.
Instead, "We recommend going with charities that have experience in the region." Charity Navigator will always have a list of suggested organizations, like this one for the Syrian refugee crisis.
...Check Their Facebook Page
Whether you’re giving to a major charity or to an individual through crowdfunding websites like GoFundMe and YouCaring, it helps to check out the Facebook page. Not only does it flesh out the charity, but it gives you a glimpse of others supporting the cause. "Just keep in mind that the Facebook page is being manned by the charity itself," cautions Kalivas. "It’s probably promotional," meaning the negatives won’t necessarily be on display.
Miniutti, recommends returning to their webpage to make your donation vs donating on any social media site.
...Beware When Giving "In-Kind" Donations
...like clothes, food, furniture. Contact the charity first to learn if it’s something they can use; charities spend a lot of money disposing of things they can’t use.
But, there are scams with in-kind donations, too: some thrift stores and roadside bins are run by for-profit companies; both must clearly state how the clothing donations are being used, and if it’s a non-profit - or they don't get your goods.
Goodwill and The Salvation Army were named by both women as reputable in-kind donation groups.
...Give to Cold Callers
"Generally speaking, those calls are being done by a for-profit telemarketer contracted with the charity, and typically they negotiate contracts that are not favorable to the charities," says Miniutti. Up to 95 cents of every donated dollar can go to the telemarketers.
"We recommend politely hanging up the phone," and don’t give the caller any personal data—especially your social security number or credit card information. Never, ever send cash. "If you’re passionate about the cause, find a reputable charity’s website, and give directly to them."she says
....Be Fooled By "Sound Alikes"
"Sound-alike names are both intentional and accidental because there are one million public charities," says Miniutti. "The scammers will play on that." In other words, you may think you’re giving to Make-a-Wish Foundation, when really you’re donating to Kids Wish Network, Children’s Wish Foundation International, or Wishing Well Foundation USA, all three of which land high on the Tampa Bay Times’ authoritative list of America’s Worst Charities.
The good news; earlier this year, the Federal Trade Commission (FTC) brought charges against four sound-alike cancer groups that conned philanthropists out of a collective $187 million.
...Give In To Sob Stories or Jerks
A legitimate group—one that knows what they’re doing--won’t coerce you to donate with high-pressure sales tactics or outsized tales of woe. Granted, those appeals can be tough to take. Says Miniutti: "Somebody calling at dinner time to help sick kids, help our heroes, or fight cancer—who doesn’t want to help these people?"
Remember, though: Unscrupulous solicitors rely on that sympathy to make their pitch. Never, ever donate right away, especially during a phone call solicitation, and if you are interested in the essential cause, ask the caller to mail you information for perusal later.
...Give Simply Because They Sent You a Gift
Receiving a blanket or a calendar, does not mean you have to give to that charity. You can choose not to for a number of reasons.
"Keep in mind, these gifts increase fundraising expenses," adds Kalivas, who encourages you to ask yourself: "Do you want your money going towards programs or these fundraising gifts?" Or you may have given to other causes closer to your heart; either way, don't be guilted into giving.
...Confuse "tax exempt" with "tax deductible"
"'Tax exempt' and 'tax deductible' aren’t the same thing," says Kalivas. "Any non-profit is going to be tax exempt, but that doesn’t mean you’re going to be able to write off your donation as a tax deduction."
Donations to tax exempt groups that are registered with the IRS as a 501(c)(3) are deductible. On the other hand, political action committees (PACs) are tax exempt, but your donation to them is not deductible.
When in doubt, go to the IRS Exempt Organizations Select Check and search for your chosen charity. You’ll have your answer in seconds.
You have been officially alerted....