Many of us find that a good portion of mail includes appeals from charities for financial help—whether it be to find a cure for a serious illness, help people who just need a hot meal, or to support our service men and women. All of these causes are important, but it can sometimes be difficult to determine legitimate charitable organizations from scams.
The Better Business Bureau has put together a useful list of warning signs to look for before donating:
- Sound-Alike Names: Don’t be fooled by names that sound impressive or that closely resemble the name of a well-known organization.
- High-Pressure Tactics: Be wary if an on-the-spot donation is requested. A legitimate charity will welcome your donation as much tomorrow as they will today.
- Emotional Appeals: Be cautious of vague appeals that offer gifts or base their appeal on a heart-breaking story, but are short on facts describing the charity’s services.
- Cash Payment Requested: Always pay by check and never by cash, and be sure to make the check payable to the organization and not to the individual.
- Unable to Provide Information: If the organization cannot provide you with information regarding their services, walk away. A legitimate organization will offer you a brochure detailing their services, or may direct you to their web site.
You can confirm that a charity is an IRS 501(c)(3) entity by contacting the IRS. The IRS will assign a tax identification number, also known as an EIN, that you can look for on a charity’s website too. Be sure to keep records of your donations so that you will be ready at tax time if your tax preparer requests such documentation. Finally, you can also look up a charity through the Better Business Bureau by visiting www.bbb.org/charity.
The IRS also notes that whatever you do, do NOT give out personal financial information, such as Social Security numbers or passwords, to anyone who solicits a contribution. Scam artists may use this information to steal identities and money from victims. Donors often use credit cards to make donations. Be cautious when disclosing credit card numbers to those seeking a donation. Confirm that those soliciting a donation are calling from a legitimate charity.
All materials have been prepared for general information purposes only to permit you to learn more about our firm, our services and the experience of our attorneys. The information presented is not legal advice, is not to be acted on as such, and may be subject to change without notice.