Many Americans focus on acts of generosity and kindness during the holiday season. That equals big benefits for good causes.
“There’s a pretty big spike in charitable giving at the end of the year,” said Ashley Post, communications manager at Charity Navigator, a charity evaluator that provides data on 1.8 million nonprofits and rates more than 9,000 charities. “This is a critical time for charities … donors will notice a lot more mail hitting their mailbox, a lot more emails coming in from organizations.”
That increased activity can draw attention from criminals who may look to impersonate legitimate charities to rip off donors and steal personal data. People looking to give should be on the lookout for scams. Here’s how to avoid charity fraud this holiday season.
Remember, charitable donations must be made (or postmarked) by Dec. 31 to claim them on your 2018 tax return. (Check these items off your money checklist before the New Year.
1. Be wary of inbound requests
Scam artists know the holiday season is big for donations. They may create elaborate schemes to pass themselves off as legitimate charities. They may use a similar name to a legitimate charity or claim to be helping a cause to solicit donors directly.
There are many motivations for charity fraud, said Adam Levin, co-founder of identity protection company Cyberscout and author of Swiped. Criminals want potential victims to take an action, like “clicking on a link or giving information over telephone.” The goal may be to pocket your cash, steal your identity or install malware or ransomware on your computer.
Avoid responding directly to inbound requests such as emails or phone calls, even if you recognize the organization. Don’t click links or download attachments from these emails. Go directly to the charity’s website and initiate the donation yourself.
2. Research the organization
Criminals may set up a fake organization in response to current events, such as a natural disaster, intending to prey on sympathetic people. Too late, their victims will realize they don’t know where their money went and their donations aren’t tax-deductible. A few minutes of online research can foil these scams.
For donations to be tax-deductible, charities must register with the IRS as a 501(c)(3) charitable organization. You can check the IRS list of tax-exempt organizations to ensure your donations are tax-deductible.
For further research, check sites like Charity Navigator, CharityWatch or GiveWell. These websites contain charity databases that provide information on how charities spend their money.
“We suggest donors always do their due diligence,” said Post. “We have over 9,000 charity ratings but we also have different tips, tools and resources donors can use to evaluate organizations, plan for their giving, make a secure online or anonymous gift.”
Levin recommends checking out your state’s resources on charities and looking for online complaints. If you see evidence of multiple complaints, either through official channels or online comments, that indicates something is wrong, he said.
3. Only make secure donations
Legitimate charities should have multiple ways of accepting donations: cash, check, credit card, PayPal and other options. If the charity demands a specific donation type, such as cash or checks, this should be a warning sign. If they specifically request unusual forms of payment such as gift cards, that’s an even bigger red flag.
Cash in the mail is always a risky way to donate, said Post. Credit cards are generally one of the better options, as they have built-in protections and aren’t tied directly to your bank account. Don’t donate to an unsecure website. Look for the padlock in your browser to make sure a site is safe.
Never give out sensitive information, such as your Social Security number or bank account number. Even information such as your mailing address or email address could be used to commit identity theft or run scams, so be careful with how you share your information.
4. Take steps to protect yourself
The actions of a few bad actors shouldn’t scare you off from making charitable donations. The majority of organizations are committed to their cause, said Post. But doing your research and taking steps to protect yourself can make a world of difference.
Being smart with your financial data and personal information can help protect you from criminals. Some best practices Levin recommends include:
Limiting the information you share on social media, especially personally identifiable information or spending habits.
Never sharing payment information or personal information via email or over the phone.
Avoiding unverified links and email attachments.
Using good passwords and account security tools such as two-factor authentication.
Watching your bank accounts, credit card statements and credit reports.
Levin also recommends asking charitable organizations how they protect your information. They may have resources on their website that address their commitment to data security, though there’s never a 100% guarantee.
“The ultimate guardian of the consumer is the consumer,” said Levin. “Nobody has the interest in your economic security more than you do.”
Image: MARHARYTA MARKO
Ready to shop for life insurance?