Donating to charity is something that I think we should all try to do if we can. There are a lot of great charities out there and a lot of important causes to support. But how can you avoid fraud and recognize fake donation requests?
Research Online
One of the easiest ways to recognize a fake donation request is to check out the charity first. My favorite site for researching charities is Charity Navigator, but the FTC has other sites you can check as well. New and small charities might be harder to find on some of these sites, so you can also just do a general search. See if other people have talked at all about the charity. If you can, verify their non-profit status.
Don’t Bow to Pressure
This is a legitimate tactic that many charities may use, but I don’t like it. Do you feel pressured to make your donation right now? Did someone come to your door to request a donation or did you get stopped on the street? Very legitimate charities use these tactics, because it can be an easy way to get a lot of donations in a short period of time, but it is also a really easy way to get scammed. Rather than donating right now to a charity who uses these tactics, say that you will take their information and make a donation after you’ve had a chance to read more.
If you’ve spent any time in a large city, you’ve likely been cornered by someone with a clipboard asking you if you care about the environment or if you support certain causes, and then they try to talk with you and get you to donate. These are typically paid workers for the charity who are paid by how many new donations they get so the desire to pressure you is high. But these could potentially also be scammers. Never give your payment information out to someone unless you are absolutely confident that they are with a particular charity. Someone could claim to be with an organization but really be a scammer.
Avoid Certain Payment Types
While I can’t say for certain, most charities aren’t asking you to donate via gift card. Even charities that could use gift cards, such as food banks, I’m going to guarantee they’d rather have the money to spend in the most useful way possible. So if someone is asking you to donate by sending them gift card information, it’s very likely a scam. The big problem with gift cards is that they’re untraceable. So if you buy a gift card and then send the scammer the code for the card, that money is gone and can’t be traced or recovered. Wire transfers are equally concerning. And never make a big donation in cash. I’m not going to say that small cash donations are problematic, because it’s easy to drop $5 into a charity cash box – but remember that you don’t necessarily know where that money is going.
Don’t Click Unsolicited Links
Did you get an email from a charity asking for your donation? These are very common following large natural disasters. And it can be a great time to donate to a charity that you have researched and you know is doing good work in the area. But don’t simply click on a link in a donation email. Emails are easily spoofed and you might find yourself on a scammer’s website. Instead, type the URL of the charity (after verifying it) into your browser and donate that way. And make sure that a fake charity isn’t trying to fool you. One example I’ve seen is someone using “U.S. Red Cross” instead of “American Red Cross” (the actual charity name).
Now, none of these tips are absolute. There are very legitimate charities that may use these tactics. But these are some warning signs that you should watch out for before making a donation.
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Megan is a 40-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:
In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance. It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information. It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck. While that was working for me, clearly I needed a better plan.
While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.
Except that’s not what an emergency fund is for.
So I did a lot of research, read a lot of blogs, and decided that I needed a plan. I needed to budget. I needed to know what I was spending my money on. I needed to prepare for the future.
I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way. I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.
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