Participating in philanthropic endeavors is an invaluable way to give back to the community and causes that you, or your company, are passionate about. In this digital age however, it’s important to carefully research the organization in question to avoid scammers looking to take advantage of your good intentions.
Before signing off on a charitable donation, make sure to thoroughly research the proposed company to avoid fraudsters.
Follow these tips for avoiding non-profit scams:
- Check public records to confirm a charity is registered with the appropriate state and federal agencies by visiting the National Association of State Charity Officials.
- Determine a non-profits trustworthiness by visiting: Better Business Bureau’s (BBB) Wise Giving Alliance, Charity Navigator, Charity Watch, or GuideStar.
- Determine which non-profits are eligible to receive tax-deductible contributions by visiting the Internal Revenue Service (IRS).
- Pay attention to “tax exempt” and “tax deductible” wording and their differences. An organization that’s tax exempt does not have to pay taxes. A tax-deductible contribution is one your can write off on your federal income tax return.
Best Practices:
Never make any cash donations and never wire money. For security and tax reasons, always pay by check or credit card.
- Do not provide any personal or financial information to a charity until you’ve thoroughly researched their history and credibility.
- Avoid requests that ask for donations in exchange for being eligible to win a sweepstakes.
If an organization isn’t forthcoming with their records, their history, and how they’re going to put your donation to use, proceed with caution as these are all signs of non-profit scams.
When selecting a charity, speak with the people at the organization to confirm their mission and ask any questions, and always keep a record of your donations.
For more tips on how to avoid non-profit scams, visit The Federal Trade Commission’s charity checklist .
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