It’s hard for me to believe that I haven’t written about charity scams in nearly three years. A lot has changed, and a lot hasn’t, in the wide world of charitable giving scams. One thing that hasn’t changed is that charitable donations surge during these last three months of the year. The charities know this, and so do the scammers. That’s one reason October 17-21 was Charity Fraud Awareness Week.
The fact that we need a week to focus on charitable giving scams is kind of scary. But it’s all about protection. Protection of your money, your information, and even your identity. Those are big things to worry about in a world where crooks have concocted scams ranging from impersonating charities to package delivery scams to travel scams. As the holidays get closer, the bad guys will ramp up their efforts to part you from your money.
Fake charities, large and small
Fake charities can be set up on a small scale (a guy sets up a table in front of a store and claims to be representing a charity) to something much larger (such as the ‘American Cancer Society of Michigan—which is not part of the real American Cancer Society, is not in Michigan, and was run by a man who created 75 other fake charities). (See this article by the New York Times for more on that.)
Charitable giving scams and the IRS
The obvious expectation would be that the IRS would find and take down fake charities, but there’s a problem with that. The IRS implemented a streamlined approval process for charities in 2013 after a political scandal involving the Tea Party and right-wing charities. The streamlined approval process that was created at the time has resulted in the denial rate for new charities dropping from about 8% in 2013 to a current rate of about .04%. While Congress is considering action to resolve the mess created by the 2013 change, it’s up to each of us to scrutinize each charity we give to.
How to screen for fraud
First off, I wouldn’t bother checking the IRS website to see if they approved a charity. Instead, go straight to either CharityNavigator.org or Guidestar.org for details on an organization. In looking up the charity used as an example in this post (American Cancer Society of Michigan), Charity Navigator listed the organization with a High Concern Advisory and details about why the advisory was in place. I give them high marks for that. On the other hand, GuideStar didn’t list the organization at all, which left me feeling kind of lost. What you’ll find is that this is common. Each of these rating organizations is separate, and each decides who and how to rate. By using both, you can improve the chances that your donation is making a difference.
Did you see last month’s scam tip? You can find it at The Google Voice verification code scam gets real. Click here to view more Friday Morning Post entries, or you can follow me on Twitter.
Appreciate your posts and I’m taking the opportunity to include a positive note, specifically if you still want to donate to a cause . . . what can you do? First off, YOU CAN always do something.
If you see someone on the street corner asking for funds, instead of giving money and worrying if they will buy booze or something to support their addiction, give a bottle of water. In kind donations are very welcome and homeless are also thankful for basic toiletries and socks.
Charity Navigator shows what percent of your dollar goes to the actual cause. For example, the American Red Cross spends less than 5% on their administrative expenses and overhead. This means 91 cents for every dollar donated go directly to the community you want to support. Pick your charities wisely and support them to your personal comfort level.
You can decide to donate your talents in lieu of a financial deposit. For example, I’ve used my writing skills to produce news releases, articles, and stories for their websites and newspapers. My photography skills have come in handy to post pictures on their social media sites.
While there are bad folks out in the world, there are more good, smart, and savvy people out here too.
You make a difference!
Thanks for the great suggestions, Michael! As always, you’re a positive inspiration!
I AM 92 YEARS OLD AND HAVE ALWAYS GIVEN TO CHARITIES . BUT LAST YEAR MY MAIL FOR THEM WAS WAY OVER I HUNDRED. UP SETTING TO ME. SO WITH MY NAME BEING SOLD EVEN OVERSEAS I THINK AT MY AGE I HAVE DONE ENOUGH SO I STOPPED GIVING AND THIS YEAR I STILL AM STARTING TO GET MORE SOME EVERY DAY SO I JUST DON’T LOOK AT THEM. SAVE BUT SORRY. ALSO I FOLLOW YOUR POST AND ENJOY THEM.
Bravo for you, Jean, for what you’ve done in the past. I certainly understand your reluctance to give now because when you do, your name and contact info is shared everywhere. It’s another way for charities to make money. It’s sad, but true.