“Red Flags” to Avoid When Donating for Hurricane Relief

November 6, 2012
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Scam artists are opportunistic, and charity scams are a perfect illustration of this.  Following high-profile disasters there are always numerous reports of consumers receiving solicitations from fraudulent charities. Scammers use the visibility of these disasters in the news media to generate sympathy and cash from their victims. Here are some “red flags” that often indicate a charity scam:

The charity refuses to provide any documentation of their 501(c)3 non-profit status or other identifying information such as a mailing address, annual report or website

You are pressured to commit to a donation immediately or are asked to provide sensitive personal information

You are asked to donate only in cash or via wire transfer

You are offered guarantees of sweepstakes winnings or other prizes if you donate

Before giving to any new or established charity, check their reputation on websites like Charity Navigator and GiveWell.org, which rank charities based on efficiency, transparency and accountability. Be cautious if a charity contacts you out of the blue, or pressures you to give money or information immediately. Legitimate charities give donors as much time as they need.

When you receive a solicitation by phone, ask whether the person calling you represents the charity itself or a professional fundraising company. If the caller represents a professional fundraising company, ask how much of each donation they collect for “administrative costs” or “overhead.” It is not uncommon for such companies to take 80% or more of every donation for these fees.

Keep track of your contribution(s) so you can put them down as tax deductions.

Charities do amazing work to benefit others. Unfortunately, scam artists masquerading as charities are only out for themselves. They will take advantage of any situation, anywhere, anytime. Be alert to avoid their traps.

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