Four Charity Scams to Avoid

More Greedy Than Needy, How to Spot Charity Scams, Especially During the Christmas Season: Internet ScamBusters #261

Wishes for peace on earth and good will towards men will
prompt many of our kind-hearted subscribers to give something
back this holiday season. But clever charity scams can rob the
needy of all your good intentions.

Today we’ll help you recognize the warning signs of four
charity scams and also share what savvy charity donors do to
make sure their money ends up in the hands of those who need
it most.

However, before we begin, we first encourage you to take a
look at this week’s most popular articles from our other
sites:

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Let’s get started…


Four Charity Scams to Avoid


With the holiday giving revving up, you may be thinking of
donating to a local charity, or perhaps you’ve already been
solicited by a worthy sounding cause.

If so, you’re not alone. Studies show half of charity
donations are made between Thanksgiving and New Year’s Eve.

But when a charity you’ve never heard of lures you with an
emotional plea or proposes an unlikely sounding scheme, it’s
time to start asking questions.

Real charities will spend 60 to 99 percent of the money they
collect on the people they are supposed to serve. By contrast,
charity scams often wind up spending most or all of the money
on its “administrators.”

Here are four charity fundraising drives you may have wondered
about.

1. The Donate A Car Deal

Donating a car to charity sounds like a win-win proposition.
The donor has a hassle-free way to get rid of an old car and
gets a tax deduction for doing it. The charity gets an asset
it would not have had otherwise.

The problem is often very little of the car’s value goes to
charity. For-profit businesses handling the cars on behalf of
the charities pay costs to tow, condition cars and advertise.
They then sell them at wholesale auctions, leaving very little
for the charity.

Even worse, some sleazy middlemen purposely disable cars so
they can be sold more cheaply, then re-sold for a profit after
they are “fixed.”

Action: The best way to donate a vehicle is to identify a
charity that actually uses vehicles in its programs, for
example, delivering meals to the homebound, taking elderly or
blind people to the doctor or on errands, or training future
auto mechanics.

You can contact the United Way, Goodwill, Salvation Army,
community college or vocational school to locate a program
that actually uses cars.

2. The Email Charity Scam

Unless you have signed up to receive email from a charity, do
not respond to email charity solicitations. Real charities do
not normally recruit new donors by email, and especially not
by spaham (misspelled intentionally).

Email charity scams may use legitimate sounding names and link
to a website where you can make a donation. These tend to be
fake websites made to look like an organization’s official site.

Be wary of websites that ask for personal information
like your Social Security number, date of birth or bank
account information, which can lead to identity theft.

Action: If you want to help the charity mentioned in the
email, contact them directly with a phone call or use a Google
search to find their real website.

More and more charities are accepting donations made on their
official websites, so it’s not wrong to make a donation this
way. Just don’t use an unsolicited email to get there.

3. Police and Firefighter Charities

Police and firefighters put their lives on the line for us
every day. So, some well-deserved backup often seems like the
right thing to do.

But where is your donation to that police charity really
going? Just because police leagues, sheriff’s associations or
firefighters’ relief organizations have the words “police” or
“firefighter” in their name doesn’t mean your local officers
will be the ones who benefit.

Action: Before you give, make sure you know whether the group
is a local, state or national organization. Get specifics on
the programs your donation will fund and make sure you
understand how they will help your local officers.

Ask how much of your money goes towards the officer program.
If the donation is used to purchase an ad in the charity’s
journal or to buy circus tickets, most of it may well get
eaten up in production costs.

One useful resource (not only for checking out police and
firefighting charities) is CharityNavigator.org.

They have a Top 10 list
of the 10 charities that most overpay
their for-profit fundraisers. Five of the top 10 charities on
this list have the words “police” and “firefighters” in their
name! These charities spend 85% to 95% of their donations on
expenses and fundraising fees, leaving only 5% to 15% to be
used for their stated purposes.

Our advice is simply to be cautious here. Unfortunately,
there are a lot of scam organizations that may sound
legitimate, but do little or nothing to contribute to the
police and firefighters that donors believe they are helping.
Make sure your donation is actually making the contribution
you want.

4. Prospect Fundraising

Many people first learn of a charity through a telemarketer
call. (Charities are not bound by the Do-Not-Call list.) These
calls are typically made by for-profit fundraisers hired on
behalf of the charity.

Though many charities raise money this way, these for-profit
companies may keep anywhere from 25 to 95 cents of every
dollar they collect. Charities raising money this way count on
repeat donors to offset the first year’s fundraising expense.

Action: Don’t give as a knee jerk reaction. Instead, research
any charity you are considering. Make sure they spend most of
the donated funds on their programs and keep advertising and
administrative costs below 25 percent.

A well-run charity welcomes questions. For more advice on how
to know if a charity is legitimate, you can read our href="http://www.scambusters.org/charities.html">Which Charities are
Legitimate? article.

Finally, you can find 10 more tips to avoid charity scams in our href="http://www.scambusters.org/charity.html">Charity Scams
article.

Time to conclude for today — have a great week!