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What you need to know about giving to charities

charity donation jar

Giving to others is a selfless act that only helps those around you.  Before giving to a charity, though, you should always do some research on the charity itself and how it operates.  By finding out as much as you can about the charity, you can avoid any type of “scammer” who is willing to take advantage of your generosity.  Not only do charity scams cost you money, they also divert much needed donations away from legitimate charities and causes.

Avoid fraudsters

In most instances, charities use the phone, face-to-face contact, email, the Internet (including social networking sites) and mobile devices to solicit and collect donations.  While it is incredibly easy now to donate to a charity, it is also easy for a scammer to use these methods as well to try to take advantage of your goodwill.  Here are some signs of a potential charity scam:

  • The charity representative refuses to provide you with detailed information about its identity, costs, mission and how the donation will be used.
  • The charity will not provide proof that a contribution is tax-deductible.
  • The charity will thank you for a pledge you don’t remember making.
  • The charity will use a name that resembles that of a well-known and reputable organization.
  • The charity asks for donations in cash or requests that you wire money to it.
  • The charity guarantees sweepstakes winnings in exchange for a contribution.  (NOTE:  By law, you never have to give a donation to be eligible to win a sweepstakes.)
  • The charity offers to provide a courier or overnight delivery service to collect the donation immediately.

It’s still OK to give, but…..

The answer is not that you do not give to charities anymore; it is that you simply take precautions in determining which organization to give to.  You should ask for detailed information about the charity (e.g., name, address and telephone number), and then do some research about the organization.  You can even search for the name of the organization and then the word “complaint” or “scam” and see what pops up on the Internet.  Here are some other good tips to consider:

  • Visit the Federal Trade Commission’s site on Charity Scams
  • Keep a record of your donations.
  • Make an annual donation plan; that way, you can decide which causes to support and which reputable charities should receive your donations.
  • Talk to your tax adviser to find out if the organizations you plan to donate to receive tax- deductible contributions.
  • Never send cash donations or wire money to someone.
  • Do not provide your personal financial information to any charity until you have done your homework and are comfortable with it.
  • Be wary of charities that spring up too suddenly in response to a tragedy or other current event.

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