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How to Detect a Charity Scam

Generous people care about the welfare of others and feel good about doing good! Studies have proven that giving and helping others boosts happiness, aids good health and creates positive connections.

Generosity is powerful — so powerful that it attracts scam artists who prey on good-natured people, capitalizing on their benevolence. While you’re trying to make a difference monetarily, scammers are out to steal your donations (or your personal information) by impersonating a fake charity or pretending to be a representative of a legitimate one.

Before you open your wallet along with your heart, you’ll want to make sure your money goes to a verifiable program — one that truly uses your dollars to benefit the cause. If you want to lend some money to those in need, make sure to be cautious and well-informed on how to avoid falling for a scam.

How Scammers Scheme Donors

Scammers will use any cause to play on emotions and trick people into giving their money away: disaster relief, social justice, medical research, community support, health care, animal rescue, and the list goes on... No matter what you’re passionate about or where you care to help, the risk of getting scammed exists.

Here’s how scammers try to trick you:

  • Robocalls, text messages and telemarketing
  • Phishing attacks via email; fraudulent emails could include a link to a fake website or come from an email address that resembles a real charity you’d trust
  • Fake social media accounts, posts and direct messages
  • Mobile apps

So, how can you ensure that your donation will get into the right hands?

Actions You Can Take!

We’ve rounded up guidance and advice from a bevy of resources to help you catch red flags for fraud:

Ask If They’re a Registered Public 501(c)(3) Organization

Charity Navigator stresses that donors should ensure that the nonprofit is a 501(c)(3), which means that the IRS has approved it as a tax-exempt charitable organization.1 Next, ask for their EIN (be wary if they can’t provide one). You can also verify the organization at CharityNavigator.org.

Research Charities Using Online Tools

It’s critical to do your research before choosing a new charity, especially if it’s one that you’re not expressly familiar with. In addition to the Charity Navigator site mentioned earlier, the Federal Trade Commission (FTC) recommends the following sites to help vet a charity you’re considering supporting: Charitywatch.org, Candid.org and Give.org (the BBB Wise Giving Alliance).2

These donor-advocate sites monitor and evaluate organizations on various criteria to ensure they’re in good standing and trustworthy. Get the data you need to make informed decisions, such as if the organization is effective, efficient, transparent and conducts ethical practices. Whether you want to research a specific charity or search for charities from which to choose, these sites help ensure your money is making a meaningful difference, and not getting into the wrong hands.

Know What Questions to Ask

One way to protect yourself from a sham charity is preparedness. The FTC encourages donors to ask these questions upfront:2

What is your exact name, web address and mailing address?

  • Look up this information to verify.

How much of my donation goes directly to the fundraiser? What else do proceeds get spent on, such as overhead expenses?

  • Make sure your money is going where you want it to! How much of your donation should go to the charity’s mission? To meet the Better Business Bureau’s Standards for Charity Accountability, 65% of the organization’s proceeds need to be directly used for its charitable program.3

Is my donation tax-deductible?

  • Use the IRS’s Tax-Exempt Organization Search to confirm the charity and that your donation is tax-deductible. Donations to individuals cannot be claimed as tax-deductible.

Are you registered with my state’s charity regulator?

  • See if the organization is allowed to fundraise in your state by visiting the National Association of State Charity Officials4 and checking your state’s regulator.

Don’t be afraid to do your due diligence by investigating the charity. Any legitimate organization will appreciate your inquiries and be happy to provide information. If they struggle to answer your questions, that’s your cue to ditch the donation.

Follow Standard Scam-Prevention Protocols

The AARP’s Fraud Resource Center5 emphasizes never giving out financial and personal information (such as your social security number or bank account number) to someone asking for a donation. While some scammers want to steal your donation money, others want to steal your identity.

Also, be suspicious of links in emails, social media messages and texts from organizations you’re not already connected to. If you’re interested in donating to the organization, don’t click on any links (or attachments). Instead, do your research, contact the charity directly and donate through the proper channel once you confirm their legitimacy.

Give emails, web addresses and websites a proper assessment as well; look for clues signaling fraud like misspellings/grammar errors, a copycat website replicating the real site, a name closely resembling a reputable charity or a suspect collection process.

Be Aware of These Signs Too!

  • Pressure to donate: The con artist may try to rush you by saying you’ve already pledged to donate or donated previously.
  • A thank-you letter for support you never gave: Scammers will use this letter as a trick to convince you that you’ve donated previously, pushing you to donate “again.”
  • A call saying you’ve won a prize in a charity sweepstakes, especially if you didn’t donate: Never provide your personal information or pay to receive what’s actually fake winnings.

What else can you do to safeguard your money?2

  • Keep a record or receipt of your donations.
  • Check your credit card account in case you were overcharged or signed up for a reoccurring donation without your knowledge.
  • Do a search for the charity on the Internet, and include keywords like “reviews,” “ratings,” “complaints,” “scams” or “fraud.”

Your greatest defense against con artists is learning about how charity scams work, what to watch out for and how you can do your part to stay safe. Don’t let the risk of getting scammed stop you from doing good though! As long as you’re informed, you can circumvent charity scammers and support organizations that will make the most impact with your donation.

1https://www.charitynavigator.org/index.cfm?bay=content.view&cpid=5593
2https://www.consumer.ftc.gov/articles/before-giving-to-charity
3https://www.give.org/charity-landing-page/bbb-standards-for-charity-accountability
4https://www.nasconet.org/resources/state-government/
5https://www.aarp.org/money/scams-fraud/info-2019/charity.html

The material presented here is for educational purposes only, and is not intended to be used as financial, investment, or legal advice.