The FTC issued an alert Tuesday urging consumers to remember that before donating, be sure your donations are going to a reputable organization that will use the money as promised.
Legitimate charities face competition from scammers who either collect for a charity that doesn’t exist or aren’t honest about how their “charity” will use the money you donate, the FTC says in the alert.
Operators of scam charities often appear no different from legitimate charities, seeking donations in person, by phone or email, on websites or on social media.
Last month, data released by the New York Attorney General’s office showed that even legitimate telemarketers pocket nearly two-thirds of all donations, so it’s a good idea to do your research and find out where the money is going.
So before you decide to make a donation to the Washington mudslide victims and their communities take a look at this checklist from the FTC to make sure you’re not being taken advantage of:
Don’t be shy about asking who wants your money. If you’re solicited for a donation, ask if the caller is a paid fundraiser, who they work for, and the percentage of your donation that will go to the charity and to the fundraiser. If you don’t get a clear answer — or if you don’t like the answer you get — consider donating to a different organization.
Call the charity. Find out if the organization is aware of the solicitation and has authorized the use of its name. If not, you may be dealing with a scam artist.
Ask for written information about the charity. This includes its full name, address, and telephone number.
Contact the office that regulates charitable organizations and charitable solicitations in your state, The National Association of State Charity Officials has contact information for regulators in each state available on its website.
Your state office also can verify how much of your donation goes to the charity, and how much goes to fundraising and management expenses.
Trust your gut and check your records.
Callers may try to trick you by thanking you for a pledge you didn’t make. If you don’t remember making the donation or don’t have a record of your pledge, resist the pressure to give.
Be wary of charities that spring up overnight.
This is especially true after natural disasters. They may make a compelling case for your money, but as a practical matter, they probably don’t have the infrastructure to get your donation to the affected area or people.
Watch out for similar sounding names.
Some phony charities use names that closely resemble those of respected, legitimate organizations. If you notice a small difference from the name of the charity you intend to deal with, call the organization you know to check it out.
Be wary of charities eager to collect cash.
If they say they are sending a courier or offering overnight delivery service to collect your donation immediately, you have to wonder whether the charity is legitimate.
Know the difference between “tax exempt” and “tax deductible.”
Tax exempt means the organization doesn’t have to pay taxes. Tax deductible means you can deduct your contribution on your federal income tax return.
Do not send or give cash donations.
Cash can be lost or stolen. For security and tax record purposes, it’s best to pay by credit card. If you’re thinking about giving online, look for indicators that the site is secure, like a lock icon on the browser’s status bar or a URL that begins “https:” (the “s” stands for “secure”)
FTC Warns Consumers: Beware of Washington Mudslide Charity Scams [Federal Trade Commission]