Americans gave over $335 billion dollars to charity in 2013. Most occurred at year's end during the charitable season. December is the high point of annual giving and the peak month of charity frauds and scams. Whether you donate $10 or $10,000 you can protect your donor identity and ensure that your donation fully reaches the charity and services you intend by observing 5 simple steps.
1) Never give your credit card number to charity phone solicitors. Hang up or ask to have information about the charity mailed. Most phone solicitors work for professional fundraising organizations that skim variable amounts off each pledge. As example, Seattle based fraud resolution specialist, Liz Mulligan, cited Xentel, a fundraising organization that routinely took up to 80% from charitable donations they solicited for causes like veterans, firefighters, and missing children. "A lot of people do year end giving and scams count on holiday spirit. That's what makes me mad," Mulligan said, "using the desire to help others to line your own pockets. That's so wrong."
2) Get off solicitation mailing lists. Donations to small charities invite more solicitation because charities generate additional revenue by selling donor contact information. Mailing lists expose donors to burnout and a higher risk of fraud. In a novel attempt to address the problem Colorado's Attorney General collected mail solicitations in a state-wide mail sweep this year. Working with AARP Colorado's ElderWatch, the mail appeals were studied for possible prosecution. Unwanted mail solicitations are a nationwide problem. When you donate, tell charities that you don't want your information to be sold. Many organizations will honor your request. Find suggestions at Charity Navigator if you're already receiving unwanted solicitations or need more alternatives.
3) Refuse to fulfill pledges you can't remember or donations to charities you don't recognize. A common scam tactic alleges that you owe a charity money, haven't paid a pledged donation or are a recurrent donor. Trust yourself. If you don't recognize or remember it, don't give.
4) Empower your dollar by researching the percent of each donation reaching the cause or service intended. Are you comfortable with 60%? CharityWatch, one of a handful of charity evaluation organizations, gives a grade C for 60%. 75% and over is generally rated excellent. Investigate the operating percentages of over 8,000 charities at Charity Navigator. Get external perspectives, impact examples and comprehensive information on your charity at Guidestar.
5) Before you give--- check donor advisories, your state Attorney General's warnings about charities, and the Federal Trade Commission. Using a smart phone? Try Charity Navigator's downloadable ap for help identifying highly rated fraud free charities. Fraud impacts big and small donors. Donations to well known national charities or popular causes can be as vulnerable as small donations to local organizations. Breast cancer funds, The Wounded Warrior project, Badge groups (police, sheriff, fire) and even children's funds can be misused or drastically mismanaged. Lastly, If you're giving as a year end tax strategy, protect your deduction by donating to charities registered as 501(c) (3).
Use these five steps to safeguard your gifts of charity. Donations of $5, $10 and $20 dollars add up for America's charities and they're especially vulnerable to scams. Protect every denomination of giving with research. Rich or poor you can make an impact on the causes and services you support when you give wisely.
Update: May 2015. Cancer scams exposed in rare joint action by the FTC and state attorneys general to protect charitable donors. These scams (Cancer Fund of America, The Breast Cancer Society, Children's Cancer Fund, Cancer Support Services) exemplify how criminals choose false charity names that sound legitimate.