Some people have absolutely no scruples and happily take advantage of charitable holiday feelings. Unfortunately, Sept. 11 and the Hurricane Katrina crisis vastly increased the number of charity scams, which spread to the holiday season.
One of the easiest ways to identify charity scammers is by the lack of information theyâ€™re able to provide. If youâ€™re at all suspicious, either let the person requesting a donation know youâ€™re not interested or ask such questions as to how the money will be spent or where you can go in person to make a donation. If theyâ€™re unable to provide any of this information, youâ€™re probably dealing with a con artist.
Coupon Sherpa researched 10 ways to identify fraudulent charities, so you can ensure your holiday donation helps those who truly need your help.
1 .Verify unfamiliar charities: Most states require charities register a 501(c)(3) tax form and file annual reports showing how they use donations. If youâ€™re concerned about a charityâ€™s qualifications but are interested in donating, theNational Association of State Charity Officials provides a comprehensive listing. TheBetter Business Bureau Wise Giving Alliancealso provides information about national charities.
2. Ignore e-mails seeking charitable contributions: Most unsolicited e-mail messages are fraudulent. If youâ€™re familiar with the charity and would like to donate, call to verify the charity is valid.
3. Beware of sound-alikes: Some crooks try to fool people by using names similar to those of well-known charities, like â€œUnity Wayâ€ or â€œReddish Cross.â€
4. Ask how donations will be used: One of the most important things to consider is how much of your money goes to fundraising and administrative costs, rather than to the charitable work itself. The median overhead rate for American charities is 20 percent.
5. Be wary of requests to support police or firefighters: These fraudulent fundraisers have spread like locusts in recent years, capitalizing on the goodwill of Americans towards these organizations since Sept. 11. In fact, little or no money goes to them. Contact your local police or fire department to find out if the claims are true and what percentage of donations, if any, they will receive.
6. Paid fundraisers: Ask whether the person contacting you is a professional fundraiser. Many organizations now pay their solicitors, meaning much of the funds raised is paying employees.
7. Watch for high-pressure pitches: National Public Radioâ€™s beg-a-thons may have made high-pressure pitches more acceptable, but many fraudulent charities take advantage of pressure tactics.
8. Thank you emails or letters: If you donâ€™t remember making the pledge, be skeptical.
9. Ask others: Discuss the donation with a trusted family member or friend before committing the funds.
10. Urgent donations: No reputable charity will ask for an on-the-spot donation, with the exception of the Salvation Army bell-ringers.