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The Sad Truth of Charity Fraud: How to Verify Before Giving

Barbara Spinelli loves writing about the changing trends in business, finance and politics.  She shared with us, how to verify a legitimate charity before you donate.

The holidays are a time when family and friends gather, exchange gifts, reminisce and sometimes offer aid and assistance to those who are in need. Unfortunately, there are scammers who use holidays and unfortunate events to their advantage and create fake charities that are not intended to help those who are in need. In the wake of hurricane Sandy, CNN.com reported more than 1,000 sites were registered with the words Sandy and relief in the domain. Some of these sites were registered before the hurricane hit. One site urged visitors to donate relief funds to help the victims of hurricane Sandy in Jamaica as the National Weather Service was reporting the storm was moving towards Jamaica. The site was tracked to North Carolina, but it wasn’t registered with the Secretary of State’s office in North Carolina and isn’t considered a legitimate charity.

Art Taylor, president of the Better Business Bureau’s Wise Giving Alliance says over 70 percent of Americans open their wallets before checking the legitimacy of the charity. These reports may seem discouraging, but giving up on helping people who are in need isn’t the answer. So how can you tell the real charities from the fake ones? We made a list of the best legitimate charities and threw in a few tips, so you can know the good places to donate from the bad.

Give With Caution

Richard Kolko, a special agent in the FBI says, “scam artists will do anything […] to steal your identity and your money as you try and make donations.” To avoid becoming the victim of a scam or of identity theft, Kolko suggests that donors use caution and apply these tips when making contributions:

  • Be skeptical of individuals representing themselves as officials soliciting via e-mail for donations.
  • Make contributions directly to known organizations rather than relying on others to make the donation on your behalf.
  • Verify the legitimacy of the non-profit status of the organization.
  • Do not provide personal or financial information to anyone who solicits contributions: providing such information may compromise your identity and make you vulnerable to identity theft.

Give Wisely

With so many charities popping up daily for different causes, it’s difficult to know which ones are legitimate and will actually get aid to those who are in need and the ones that will take donors, and the victims of a disaster, for a nightmarish ride. CharityNavigator.org is a site that makes it their business to research, ask donors for reviews and report the business practices of each charity. They offer several top 10 lists for different categories, like the top 10 celebrity sponsored charities, the top most followed charities and the most financially transparent organizations. Although there are many legitimate charities worldwide, many of these large companies, like American Red Cross, spend more on their administration than they do on fundraising efforts.

The queen of holiday crafts, Martha Stewart, offered many suggestions on her site for legitimate charities to give money and goods during the holiday season. The charities highlighted range from the U.S. Marine’s Toys for Tots program to the Meals on Wheels association and Make a Wish Foundation. The foundations and their ideas might even inspire you to come up with your own charity, be sure to get it registered if you do organize a charity. The extra leg work done to become legitimate is worth it and will help get more positive press and donations for your charity. Let the giving begin!

Whose world will you change?