Giving Wisely and Avoiding Scams

Transcript of Podcast Episode 173

Hello this is Bill Rainaldi, with another edition of Security Mutual Life’s SML Planning Minute.  In today’s episode, Giving Wisely and Avoiding Scams.

Recent news has been concentrated on Russia’s invasion of the sovereign country of Ukraine and the vast bombing of cities and towns, causing a massive humanitarian disaster. This war has caused Ukrainian citizens, residents, and visitors to flee the country causing a refugee crisis. Those that have stayed or could not flee suffer from a lack of food, heat, clothing, and shelter.

Like many disasters–whether caused by natural forces such as hurricanes or floods, or manmade–such as invasions and war or social unrest, many Americans are eager to provide financial assistance through charitable donations of food, clothing, money or other aid.

The problem, however, is that with each disaster comes many criminals, intent on taking your money using fake charities and scam fundraising efforts. Scammers may call, email, use social media and other methods to contact you and appeal to your emotions and sentiments; they may promise tax deductions for contributions the intended recipients never receive; they may set up organizations that sound like real charities but are not; they may say they represent legitimate charities although they don’t; and so on and so forth.

Prior to making any donations, you should  research carefully and exercise caution.  Giving to well-known charities may be the easiest solution, but there are many worthy smaller charities that seek to help specific disasters and situations, and in more direct ways. Fortunately, there are several tools  you can use, prior to making your contributions, to conduct your research and avoid being the victim of a scam.

One source to rely on is the Federal Trade Commission, which provides guidance on donating wisely and avoiding charity scams. More information can be found at:

www.consumer.ftc.gov/features/how-donate-wisely-and-avoid-charity-scams#research.

The FBI also provides tips on preventing yourself and your family from becoming victims of crime and fraud from these charitable scams.  More information can be found at:www.fbi.gov/scams-and-safety/.

The IRS provides a tool on its website to conduct a tax-exempt organization search. Organizations that have complied with the rules to become tax-exempt, and accept contributions that may be tax deductible to the donor, are generally listed in an IRS database. While the database is updated regularly, there may be a time lag due to staff shortages and other resource issues. So, the fact the organization is not listed in the IRS database does not necessarily mean  the organization is not a bona fide tax-exempt organization that would allow tax-deductible contributions.

There are also several well-known organizations that help donors to research the charitable organizations  they are interested in donating to.  These organizations provide reports and ratings on how charitable organizations conduct business and how they use the donations received. A few of these organizations are the BBB Wise Giving Alliance which can be found at www.giving.org, or Charity Navigator which can be found at www.charitynavigator.org, or Charity Watch which can be found at www.charitywatch.org.

Another valuable resource is the National Association of State Charity Officials (“NASCO”) which can be found at www.nasconet.org. NASCO is an association of state offices charged with the regulation and oversight of charitable organizations and charitable solicitation in this country.

Americans tend to be very generous when it comes to helping others because of natural or manmade disasters. To ensure  your donations are going to help the cause  you’re interested in, make sure  you research the organization  you are thinking of donating to. This way, you can be confident  your money or other donation is going to a worthy cause and not into the pockets of criminals.

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