The pretty postcard came in the mail with a photo of a child in need. The child’s plight pulled at the heartstrings of Jim Henningsen, and he contemplated sending off a check to the charity.
Fortunately, he waited until his wife came home. Sandra Henningsen works for Crescendo Interactive, a marketing company that specializes in promoting planned giving for charities. Planned giving is when an individual makes charitable gifts during their lifetime or after their death as part of their financial and/or estate plan. Many people like to give not just today, but also in the future through their wills.
She loved the idea of giving to a charity that helps children in need, but was skeptical—she didn’t recognize the organization. “Let’s check out the charity first,” she said to her husband. In about 5 minutes, she figured out it was a scam, and they shredded the check instead of mailing it. The scammers picked the wrong household to victimize.
“The truth is available if recipients of charitable solicitations simply confirm the status of the the solicitors,” Sandra said. “We all want our donations to go to worthy causes.”
Here are some ways to spot a charitable scam:
- Search for reviews. She ran a simple internet search and found some reviews from duped contributors who were kind enough to share how they’d been victimized.
- Check out the charity. Use a charity-monitoring site, such as Charity Navigator or Charity Watch, to determine whether the organization is legitimate. The IRS has a database of exempt organizations—see if yours in on the list.
- Look for transparency. Charity Navigator provides an independent rating for charitable organizations that includes financial transparency and accountability. For example, United Way of Salt Lake (where I am a board member for their Planned Giving Advisory Council) has a 4-star rating—the highest.
- Ask questions. Scammers will try to pull at your heartstrings. The Federal Trade Commission suggests military and veteran families donate to a charity with “a track record and a history”—the Department of Defense doesn’t endorse specific charities, so if someone says their charity is connected with the DoD, watch out. If you get a call for a police or firefighter fundraiser, ask for identification, how the contributions will be used, then verify before sending the contribution.
- Beware of email solicitations. While you may have given your email address to charities you support, watch out for organizations that don’t sound familiar. Charity Navigator suggests, “Be a skeptic of email solicitations from charities you have not heard of before or haven’t in some way supported or contacted.” If it is a charity you are interested in, be sure to independently check out their website (not by clicking a link in the email, but by searching in a new browser window).
There are so many great causes out there. Be sure to check out your charity first before sending money. You want to make sure your hard-earned money goes to a great cause.
This article was first posted on my Forbes.com contributor site with the title, How To Spot A Charitable Scam Before You Donate
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