Fake charities use telemarketing methods as well as email to try and bilk you out of your money by pretending to represent a well-known charitible cause.
No one likes feeling like a jerk. So when telemarketers claiming to represent charities call asking you for a donation it’s hard to say no. Telemarketers know this and do everything they can to exploit the situation. Expect to feel guilty, deal with it, and don’t be afraid to say no. It’s better than being suckered. We’re not saying you should be afraid to donate to charities, because they need your money and the causes are real and just. Just make sure you check the charity out first before you make a donation.
Dealing with unsolicited donation request
When making a donation, don’t give payment information to telemarketers making unsolicited calls. If you’re interested in helping, ask the caller to mail you information on their charity so you can review it first. When you get the materials do some research online to see what you find. The Better Business Bureau is a great place to start. Once you’ve determined the charity or organization is legitimate, send them your donation.
For example, some phony charity scams are using the name of National Cancer Society to cause confusion with the very real American Cancer Society to obtain your donations or the National Heart Institute to cause confusion with the American Heart Institute. This may sound simple but it diverts millions of dollars every year that might otherwise have gone to the needy and sick.
Don’t give in to pressure or hard sell tactics
If you feel pressure to act immediately and without delay, ask the caller for time to think about it first. The harder the pressure to donate, the more suspicious you should be.
Remember that a bonifide charity will be willing to let you take as long as you need to make a decision. Nor will they hesitate to prove they are who they say they claim to be. I never give money to people that solicit as a personal policy but I will, and do, donate directly to charities that I trust either from reputation or investigation.
How to evaluate charities
Before making a donation to charity, evaluate their financial health and determine how much of your donation directly supports the charities programs and services.
Have you ever wondered how much of your charitable donation is used to pay administrative or fundraising fee and how much ends up supporting the program or service you are donating to? No one wants their money going to waste and there have been many reports in the media about phony charities and fraud.
Even when the charity is legitimate they may pay their professional fundraisers so much money that a significant portion of your donation is eaten up by administrative costs, fees and employee payrolls. If you’re like me you want to help the sick or poor and would rather not pay for telemarketers to make cold calls requesting donations. The question is, how do you know if the charity you intend to donate to runs lean and mean fundraisers or if it has a lot of overhead that will consume your donation?
Fortunately, there are organizations that track charities and rank them according to their financial health. They rank them using several criteria such as overhead, ratings, efficiency and just about everything you need to guide you in your decision making process. You can even find financial statements, policies, program leadership, mission statements and contact information. I was surprised at just how much was at my fingertips. You no longer have to hope your money makes it into the hands of the needy. You know if it does or not.
Websites Devoted to Charitable Giving
Below are some of the websites that have tremendous resources related to charitable giving:
- Charity Navigator – America’s premier independent charity evaluator, works to advance a more efficient and responsive philanthropic marketplace by evaluating the financial health of America’s largest charities.
- Charity Guide – Ratings for nationally known charities broken down by category.
- American Institure of Philanthropy – The American Institute of Philanthropy (AIP) is a nationally prominent charity watchdog service whose purpose is to help donors make informed giving decisions.
- Give.org – BBB Wise Giving Alliance. The Alliance reports on nationally soliciting charitable organizations that are the subject of donor inquiries. These reports include an evaluation of the subject charity in relation to the voluntary BBB charity standards.
These are only a few of the resources available to those wishing to conduct research before making a donation. There are many other useful websites and organizations dedicated to this cause. Just remember that if a charity isn’t listed or rated by one of the services it does not imply a poor evaluation or rating. It could be that no one has had an opportunity to look into that charity yet.
How to avoid charity scams
- Be on your guard against charities that use emotional appeals in their fundraisers. Some key elements to look for are the use of children or the mention of recent disasters like hurricanes, earthquakes or tsunamis.
- Never give money to charities that contact you by phone. If you would like to donate to the charity the telemarketer claims to represent, ask them for their mailing address so that you can mail them a donation directly. Better yet, go to their website or look them up in the phone book and get their contact information yourself.
- When solicited for a donation, ask how much of your contribution goes towards paying for overhead versus how much will go directly to the cause you wish to support. While you’re at it, ask the solicitor whether they’re a volunteer or a professional fundraiser. That will give you an immediate idea of how much overhead might be taken out of your donation!
- When in doubt, call the charity yourself and ask them if they’re aware of the solicitations being done in their name. Many cases have been reported of unauthorized fundraising activity. Some of your money may end up in the hands of the needy but only after the solicitors “bills” have been paid.
- If the telemarketer or solicitor claims that the charity will support local organizations, call these groups to verify the claim. Phony charities often use the names of places in area codes they’re calling so that people think their contributions support local causes. People like to help their neighbors, especially during the holidays and scam artists won’t hesitate to exploit your kindness. We don’t want you to be too afraid to help local charities, but this kind of scam is easy to fall for over the phone.
- Talk to trusted friends or family members before making a charitable donation. The larger the donation, the longer you should think about it before transferring funds to the charity.
- Don’t provide any credit card or bank account information until you have reviewed all information from the charity and made the decision to donate. Whatever you do, don’t give this information to someone initiating contact by phone.
- Ask for a receipt showing the amount of the contribution and stating that it is tax deductible. Understand that contributions made to a “tax exempt” organization aren’t necessarily tax deductible.
Your best bet is to make charitable contributions by check. This is a more secure method and you’ll thank yourself at tax time. Make your checks payable to the charity.
Never make checks payable to any fundraiser no matter what excuses they offer!