Anytime there's a national or international emergency, people are quick to open their wallets to help others. However, on the flip side, there are many people waiting to take advantage of that generosity as well.

Before breaking out your checkbook or signing your savings over to an anonymous charity fund, use your common sense and do some investigating. According to the Federal Trade Commission (FTC), the best thing you can do is give to an organization that you're familiar with.

Where to Donate

Some places are generally safer than others. For example, choose to give to:

  • Your company's charitable foundation. Not only will the charity get your help, but you company may even match your donation  
  • The local chapter of the Red Cross
  • Some other organization with a mission and management team you can trust, like your church or other religious organization 

Beware that familiar groups may not sponsor funds with similar names. For instance, a fund called "The Red Cross Trust For Freedom and Peace" may not be affiliated with the Red Cross.

There are also ways to text your donation, but be sure the receiver is verified.

Research before You Give

If you're not sure about a charity, check it out before sending money. To research potential charities, contact:

Don't be afraid to ask questions before sending money. Make sure your donation will be used the way it's intended for: To help those in need. Scam charities have been a problem for years. Sometimes scammers keep the money for themselves, other times donated funds are used for illegal activities. In some instances, the lion's share of money donations goes to promoters and solicitors, with only a small percentage of the money going to the people in need.

Federal agencies such as the FBI and IRS investigate charity abuses, as do some state agencies. However, you are the first line of defense in keeping charities honest.

Ask for Proof

Follow the steps above when considering a donation. Also, ask for written materials about how the charity spends the money it receives. How much goes to expenses and how much actually goes to help the people in need? The American Institute of Philanthropy (AIP), a renown watchdog organization, suggests that 60% or more of your donation should go directly to the people you're trying to help, with the remainder going toward the charity's administrative and fund raising expenses, such as paying staff, mail costs, etc.

The AIP and other watchdog groups, such as the Charity Navigator, offer help in selecting charities that "do the most good" with the dollars you send and what to look for in a charity. And they remind us that charities should be willing and able to give you detailed information about their operations.

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Tagged as: Consumer Law, Consumer Fraud, charity donation, consumer fraud lawyer