On the IRS’ annual list of scams that are on the rise, the “Dirty Dozen,” one especially odious item stands out: fake charities. According to the organization, bad actors will approach you for contributions using the phone, mail, email or social media sites like GoFundMe or in person. They may have a website or professional-looking fliers, but your money will never go to those who need it, and you’ll never get an invoice that you can use to claim a tax deduction.
Why are charity scams growing more common?
This past year was one of unprecedented disasters: the COVID-19 pandemic, wildfires, hurricanes and recession. Americans stepped up to the plate to protect their neighbors, giving $471 billion to charity, according to the AARP. The problem is that when your area is facing a disaster of a type you’ve never lived through, it isn’t surprising if you’re approached by a specialist charity that you’ve never heard of. Even in less-hectic years, disasters are always when opportunists come to the fore, as is the holiday season. At other times, sham charities most commonly claim to be in aid of needy veterans.
What should you watch out for?
Charity scams most commonly make their appeals over the phone. That’s because they want you to listen to their pitch and pay immediately by phone without doing any background research. You should be skeptical if the caller tries to pressure you into paying on the spot. If the person asks for a wire transfer or a gift card, that’s another red flag. Always pay by credit card or check. If you get your appeal by email or social media, don’t click on any links unless you recognize the website, as they could carry viruses. On any platform, be suspicious of a thank-you message for a gift that you don’t remember making; it’s a common way scammers get you to lower your guard.
How do you know a charity is legitimate?
The safest thing to do is to give only to charities you trust. But if you hear a charity appeal and want to help, you can always look it up on the IRS’ tax-exempt organization search tool, Charity Navigator, or the Better Business Bureau’s Wise Giving Alliance. If you receive a phone appeal, that means taking down the organization’s name and website and looking into it before paying — and be sure to check it out extra carefully if the caller gets defensive when you ask for details. If you do decide to donate with a credit card, make a note of your payment and check later to make sure the right amount was charged.
Most of all, be skeptical. Don’t assume people are legitimate just because they say they’re helping.
To learn more about how our firm can serve your nonprofit organization, don’t hesitate to contact Kathy Corcoran at (302) 254-8240.
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