Checking a charity's legitimacy is critical when making donations, and it can be accomplished by researching the organization, verifying the company's details and determining where exactly your donation is going. Scammers often rely on an empathetic person's instinct to help others, so it's important to avoid giving money without researching first. Taking these precautions ensures that money given in good faith is truly going to those in need.
Research the Organization
The first step in determining the legitimacy of a charity is researching the organization itself. Often, you will come across charities on social media, emails or other websites. AARP points out a valuable tip when receiving emails regarding fundraisers or charities. Never click on any links directly from an email because scammers often embed malware or viruses within such deceptive links. This rule should also be applied to links found on popular sites like Facebook and Reddit. Instead, search for the organization or group on a trusted search engine or directly type in the company's URL yourself. A quick Google search is the preferred option because you can glance through the top search results which may bring up other consumer's positive or negative experiences with the group.
Trust but Verify
Once you've located the organizations website, do a little digging. Every reputable company will have a method of contacting the group. A lack of contact information or a permanent company address is a huge warning flag that the organization is not trustworthy. Utilize the contact page information and verify it is authentic by giving the company a call or emailing the staff. If you have serious trouble getting in touch with the department asking for donations, then you may want to reconsider donating to the group. Reputable organizations do not operate under secrecy and want their donors to know where their money is going. If you contact the group successfully but you still have doubts, then you can check the company's reputation with other groups. The FTC recommends utilizing the following resources to verify the charity's legitimacy: Better Business Bureau's Wise Giving Alliance, Charity Navigator, GuideStar and Charity Watch.
Determine Where your Donation is Going
No one should expect 100 percent of their donation to go directly to the cause or victims in need. There are fundraising, overhead, volunteer, and travel costs associated with charities. A good charity shouldn't be allocating more than half of your donation to these types of costs, and a great charity will reduce these costs to about 35 percent. Unfortunately, even some of the most reputable charities have fallen into this trap. In late 2015, the FTC revealed that some of the top cancer charities like Cancer Fund of America, the Breast Cancer Society and Children's Cancer Fund of America were using the majority of their funds to support the organizer's lifestyles rather than cancer patients. Donations were going to various lavish organizers events, cruises, cars and concert tickets.
It is far too easy to feel compelled to give when touched by an emotional plea for help, but it's also important to recognize that scammers prey on those exact emotions. Taking the few extra steps of researching an organization, verifying the company's details and determining where your money is going ensures that your good faith donation will be put to good use. The rise of internet-based schemes has made checking a charity's legitimacy more important than ever before.