Now that we’re full swing into the yuletide season, it’s the time of year where we get into that feel-good mode of giving back.
Generosity takes its form in different ways this month. It could be fighting crowds at the mall to buy all the gifts for family members and loved ones. Maybe it’s devoting some of your time and goodwill by volunteering for a helpful cause. Then there’s the chance to donate money to the less fortunate through any number of charities and nonprofits.
While we’re not here to go all Grinch on you and stamp out the holiday spirit, there is the real risk of scammers impersonating charitable organizations. Like other types of fraudsters posing as your bank, a government agency or even a potential landlord, fake not-for-profits and false fundraisers aim to collect money from people under the guise of a sneaky scam: solicit donations for a nonexistent holiday or relief campaigns, and pocket the proceeds once you’ve handed over your money.
Why would anyone do such a thing? Because they can. They know that consumers are in a giving frame of mind and vulnerable to being solicited; in 2015 alone, Americans gave more than $373 billion to charitable organizations, a 4.1% increase from the year prior.
Here are five tips for spotting a fake charity, so you can divert your money and generosity to the authentic nonprofits and avoid getting victimized this Christmas:
1. There’s no information on the charity/nonprofit anywhere.
It can be hard to spot a fake charitable organization or nonprofit from a real one, since there are so many genuine charities in existence (out of 1.5 million tax-exempt organizations in the U.S., 1 million are licensed as public charities, according to the National Center for Charitable Statistics).
Do your research first before signing your name on a check. Are they looking to raise money for disaster relief, but there’s no mention of the tragedy anywhere in the news? Does the organization have a web presence? Even if they do, it doesn’t automatically make them legitimate.
Avoid dealing with charities who uses a name or website resembling that of a real nonprofit, but presenting themselves as a separate entity. One giveaway is misspellings in the site’s URL, phony-looking emails, scant (or zero) social media presence, or a slightly different title to fool people into believing a fake nonprofit is real. Many look so genuine to a real-life nonprofit that the only detail changed is the address to send donations.
Quiz: If the American Red Cross or the U.S. Red Cross called you, which one would you believe? (If you guessed the American Red Cross, you’re donating to the right place.)
2. They guilt you into donating money.
We’d expect a debt collector to use strongarm tactics -- not a selfless nonprofit organization. Most charities, elated if you’ll even think about giving a monetary gift, will give you as much time to make a decision to donate. According to the Federal Trade Commission, one sign of a scam fundraiser is rushing you to decide immediately without giving you time to check out if the organization is real; that’s because it’s not!
Consider it completely (and suspiciously) out of character for them if they try to cajole, persuade, shame, force or guilt you into giving money. A genuine charity will bring out the selflessness in you with a donation, not make you feel selfish for failing to donate.
3. They’re vague, ambiguous or evasive about their mission.
Any charitable agency -- from the national March of Dimes to the local food pantry -- should be transparent and forthcoming about who they are, their mission statement, and how and where your donation will be spent.
A fraudulent charity won’t be. They’re hoping to snag donations from people who won’t notice or bother to ask questions of the representative calling or emailing them. If you’re contacted by an organization that seems suspicious, don’t hesitate to ask them some specific questions. Will my donation be tax deductible? Are you registered as a 501(c)(3), or some variation? Do you receive federal funding? Who’s your CEO and who sits on your board of directors? Can I obtain more information online or through snail mail? What’s your nonprofit’s annual operating budget and target demographic?
If the excuse-making starts here, you’ll want to pass; any nonprofit representative worth their value proposition will know their campaign, history and goals front to back, inside and out, and be happy to share more with you.
4. They solicit cash or offer odd donation arrangements.
PayPal, automatic transfer, credit card, check, money order -- real charities allow you to donate money in a variety of ways. If you’re called or emailed by someone seeking a charitable gift, but they insist on cash, allow the red flags to be raised; you’ll never see that money again, even if you can prove they’re fake.
Be even more wary if you’re pressed for sensitive personal or financial information, like your Social Security number, bank account or routing numbers, or even your mailing or email addresses and/or other details that could compromise your identity. If they offer to send a courier or messenger to your home to collect the donation, don’t consider it convenient, but suspicious.
Some scammers may even claim that you’re guaranteed to winning sweepstakes money in return for a donation. Ask yourself: If they’re so hard up for donation money, how can they afford to pay you in return?
5. Details emerge after you’ve made a donation.
The fake fundraiser may have created a convincing ruse and an unsuspecting person took the bait and gave them money. Sometimes, you might not be aware you were scammed until after the fact. Did you fail to get a receipt? Did you check your checking or credit card account statement, and the name on the transaction doesn’t match the name of the alleged charity? Take these as signs of a scam.
If you try to follow up with the organization, but their website is down, and their phones shut off, it becomes clear that it was a fly-by-night setup, not a real charity. Or, if the scammer pretended to be a real charity (for example, St. Jude’s Children’s Research Hospital), and the real agency has no record or recollection of you donating, you may have been duped.
Give yourself the gift of security
Don’t boycott all charitable donations this year in fear of getting scams. Just keep this checklist top of mind when making donations:
Check out the nonprofit(s) asking you for a donation**. See if they’re real, trustworthy and on the level. The FTC recommends double checking organizations through the Better Business Bureau, and websites like GuideStar, Charity Navigator and Charity Watch to see if they’re officially registered on state and federal levels. Consult your local nonprofit or community association to verify local groups. Googling around for evidence of complaints or fraud alerts on the organization can shed some light on a potential scam. And if there’s no trace online, or the info you’ve been given doesn’t add up, don’t donate a cent.
Protect your information**. It could be getting clever with creating new account passwords, or installing a quality antivirus software to protect against viruses utilized by scammers. Not all phony charities will try to speak to you in person; some solicit through email, but opening the offending correspondence downloads a virus to seize your information and steal your money. Give out your info to nobody you distrust.
Confront representatives with caution**. Door-to-door solicitations are not uncommon, but don’t answer yours if you feel unsafe, threatened or unsure. Not to sound alarmist, but there’s no telling if a seemingly kind nonprofit missionary is looking to gain access to your home. If in-person, phone or email correspondence becomes worrisome, don’t hesitate to contact the local authorities.
Contact your bank or financial institution**. Treat a potential charitable money scam with the same discretion and seriousness as you would losing your credit card or having it stolen: get in touch with your bank, report the offense, and have them freeze your account and issue you new cards/passwords/account ID numbers.
This holiday season, don’t get duped into donating your dollars somewhere you don’t intend them to go. Doing your due diligence and researching if a charity or nonprofit is legitimate can give you the peace of mind that your money is going to the right place, and for a good cause, not to line the pockets of scammers.