Giving to a charity should not be difficult. Unfortunately, it can be. It is estimated that charity fraud exceeds $20 billion each year…yes, BILLION! What can you do to ensure your charitable gift is going to a legitimate charity and being used most effectively? Here are some tips:
- Do your homework. There are reputable and independent charity rating organizations you can check to verify the legitimacy of a charity and where your charitable dollars will go, including:
- Better Business Bureau (BBB) Wise Giving Alliance. The BBB Charity Seal is considered the most influential seal when considering giving decisions.
- Charity Navigator, America’s largest independent charity evaluator.
- Charity Watch, from the American Institute of Philanthropy, considered a charity watchdog.
- Independent Charities of America an independent screener of American charities.
NOTE: Many legitimate charities – especially local charities – may be too small to be tracked by these services. Read on for additional tips to help your research.
- Give to groups you know. You remember the sage advice of your parents when you were young, “Don’t talk to strangers.” That same advice applies to your charitable giving – don’t give to strangers. When you know the charity you are giving to, you can have confidence in the organization and its cause.
- Review the charity’s expenses. This is a difficult one, but as a guide, efficient charitable organizations will spend less than 35 percent of their donations on expenses (such as fundraising and payroll for their staff).
- Give your time. Volunteer! One of the best ways to know how your money will be used by an organization is to donate your time. You will find out how well managed the organization is and have a direct understanding of the impact on the desired cause.
- Protect your privacy. Do not give personal information or credit card information over the phone, by email or to door-to-door solicitors. Request the information be sent to you so you can verify the recipient’s reputation.
- Be aware of signs of a scam:
- High pressure sales tactics that press you for immediate donations
- Refusal to provide proof that your contribution is tax deductible
- Lack of details on the mission of the charity
- A name of the charity that sounds like a well-known charity, but is spelled slightly differently
- Offer of prize entries in exchange for your donation
- Do not give cash! While there are a few well-known, reputable, charities that collect via kettles around the holiday season, it is best to provide your donation via check and receive a receipt for your donation for tax purposes. Never, ever, give cash to door-to-door solicitors.
Lastly, if you have elderly family members, be certain to review these tips with them and encourage them to simply take down the information and have you contact the charity in the future. Senior citizens are easy prey for fraudsters.