Donating to charitable causes is an act of generosity that can sometimes go wrong. In 2020, the Federal Trade Commission (FTC) reported that Americans lost $145 million to COVID-related fraud, which included charity scams. When an important cause tugs at your heart, your instinct may be to grab your wallet — but doing your homework first will help you make sure your donation is delivered to those who need it. Here’s how to spot and avoid charity scams so that you’re not taken advantage of.
How do charity scams work?
The FBI warns that charity fraud schemes can occur at any time, but are prevalent after high-profile disasters and tragedies. Charity scammers ask for donations through emails, social media posts, crowdfunding platforms, or cold calls. Since fraudsters exploit vulnerable situations, the FBI encourages using caution and doing research before donating to charities.
How can I donate to a charity safely?
To ensure your donation is going to a reputable charity, the FTC shares three suggestions.
1. Use these terms in your search:
- When researching organizations, search Google using words like “best charity for [insert cause] ” or “highly-rated charity for [insert cause].”
- If you’re considering giving to a specific charity, search the organization’s name plus “complaint,” “review,” “rating,” or “scam.”
- Bonus: The FTC offers a list of resources for information such as finding your state’s charity regulator and seeing if your donation is tax deductible.
2. Pay attention to your payment:
- Scammers ask for donations by cash, gift card, or wiring money. (The FTC says paying by credit card or check is safer.)
- Keep a record of all donations. Also, review your statements to ensure you’re only being charged for the amount you agreed to donate — and it’s not a recurring donation.
- Find out exactly who’s receiving your donation to avoid donating to a scammer. (This is especially true when donating through social media and crowdfunding websites.)
3. Watch out for these scammer tactics:
- Rushing you into making a donation.
- Thanking you for a donation you’ve never made.
- Changing the caller ID to make the call look like it’s coming from a local area code.
- Using names that sound similar to but are slightly different from the names of recognizable, well-known charities.
- Making vague and sentimental claims without giving specifics as to how your donation will be used.
- Claims that your donation is tax-deductible when it is not.
- Guaranteeing sweepstakes winnings in exchange for a donation. (According to the FTC, this is illegal.)
These tips will give you peace of mind and ensure that your donation is going to the right place. Also, check out some additional tips for protecting your money from scammers to avoid fraud.