If you are considering a request for a donation to a
charity, do some research before you give. By finding out as much as you can
about the charity, you can avoid fraudsters who try to take advantage of your
generosity. Here are tips to help make sure your charitable contributions are
put to good use.
Signs of a charity scam
These days, charities and fundraisers (groups that solicit
funds on behalf of organizations) use the phone, face-to-face contact, email,
the Internet (including social networking sites), and mobile devices to solicit
and obtain donations. Naturally, scammers use these same methods to take
advantage of your good will. Regardless of how they reach you, avoid any
charity or fundraiser that:
Refuses to provide detailed information about its identity,
mission, costs, and how the donation will be used.
Will not provide proof that a contribution is tax
Uses a name that closely resembles that of a better-known,
Thanks you for a pledge you do not remember making.
Uses high-pressure tactics like trying to get you to donate
immediately, without giving you time to think about it and do your research.
Asks for donations in cash or asks you to wire money.
Offers to send a courier or overnight delivery service to
collect the donation immediately.
Guarantees sweepstakes winning in exchange for a
contribution. By law, you never have to give a donation to be eligible to win a
Take the following precautions to make sure your donation
benefits the people and organizations you want to help:
Ask for detailed information about the charity, including
name, address, and telephone number.
Get the exact name of the organization and do some research.
Searching the name of the organization online – especially with the word
“complaint(s)” or “scam” – is one way to learn about its reputation.
Call the charity. Find out if the organization is aware of
the solicitation and has authorized the use of its name. The organization’s
development staff should be able to help you.
Call the Department of Financial Institutions to find out if
the charity or fundraiser is registered in Wisconsin.
Check if the charity is trustworthy by contacting the Better
Business Bureau’s (BBB) Wise Giving Alliance, Charity Navigator, Charity Watch,
Ask if the caller is a paid fundraiser. If so, ask:
The name of the charity they represent.
The percentage of your donation that will go to the charity.
How much will go to the actual cause to which you are
How much will go to the fundraiser.
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.
Visit the Internal Revenue Service (IRS) webpage,
www.irs.gov, to find out which organizations are eligible to receive tax
Know the difference between “tax exempt” and “tax
deductible.” Tax exempt means the organization does not have to pay taxes. Tax
deductible means you can deduct your contribution on your federal income tax
Never send cash donations. For security and tax purposes, it
is best to pay by check – made payable to the charity – or by credit card.
Never wire money to someone claiming to be a charity.
Scammers often request donations to be wired because wiring money is like
sending cash: once you send it, you cannot get it back.
Do not provide your credit or check card number, bank
account number or any personal information until you have thoroughly researched
Be wary of charities that spring up too suddenly in response
to current events and natural disasters. Even if they are legitimate, they
probably do not have the infrastructure to get the donations to the affected
area or people.
If a donation request comes from a group claiming to help
your local community (for example, local police or firefighters), ask the local
agency if they have heard of the group and are getting financial support.
What about texting? If you text to donate, the charge will
show up on your mobile phone bill. If you have asked your mobile phone provider
to block premium text messages – texts that cost extra – then you will not be
able to donate this way.
The No Call list gives you a way to reduce telemarketing
calls, but it exempts charities and political groups. However, if a fundraiser
is calling on behalf of a charity, you may ask not to get any more calls from,
or on behalf of, that specific charity. If those calls continue, the fundraiser
may be subject to a fine.
Always consider your individual interests and concerns when
deciding which organizations to support. Pictures of hungry children, shocking
statements, and celebrity endorsements are often used to get attention. There
is nothing wrong with an organization using these approaches, but consumers
need to maintain control. Judge the cause on its merit, rather than its
Contributions may be solicited on behalf of an organization
by someone who is not affiliated with the group and has no intention of turning
over any money to it. When in doubt, ask for identification from the solicitor
and printed, verifiable information about the organization. Be sure to write
any check to the organization and not to the individual soliciting. NEVER
contribute in cash or send cash through the mail. If you are unsure about
donating in response to a mail, telephone, or door-to-door solicitation, an
alternative would be to find a local charity doing work you approve of, and
donating directly to it.
Under state law, most organizations soliciting for
charitable donations in Wisconsin must register and file an annual report with
the state Department of Financial Institutions.
Religious and veteran organizations are exempt from
registration. To verify if the charity is registered, contact the Department of
Financial Institutions at (608) 267-1711 or online at www.wdfi.org.
Checking lets you know if the charity is in compliance with
Wisconsin’s registration requirement. State law also requires that charitable
solicitations must disclose the true name of the charity, its actual location,
and its primary purpose. However, the state cannot regulate how an organization
uses its money.
An extremely high percentage of your contribution may be
used for salaries and fund-raising costs, and little for the actual cause. The
fact that a charity is registered does not necessarily mean that it should
receive your donation.
Additional information about charities can be obtained from
the Better Business Bureau at (800) 273-1002 and on the web at www.give.org.