You may have seen the heartbreaking images from Arkansas, Alabama, and 14 other states as severe storms have ripped through a wide swath of the United States. Many of you may be inclined to send donations to help storm victims get back on their feet. Before you write a check, make sure you're on the lookout for scammers, and make smart donations to well-run charities.
You may start to see emails or receive calls from people looking for donations.
Many of the calls might be legitimate, but remember scammers watch for opportunities like this national disaster to take advantage of your generosity. Never feel compelled to make that donation immediately, feel free to stop and do some homework.
Warning Signs of a Charity Scam
The Better Business Bureau Serving Eastern Michigan provided this list of warning signs that a charity might be a scam.
* refuses to provide written information about its identity, its mission, its costs, and how the donation will be used
* will not provide proof that a contribution is tax deductible
* uses a name that closely resembles that of a better-known, reputable organization
* thanks a potential donor for a pledge the person doesn't remember making;
* asks a potential contributor for bank account or credit card information before the person has reviewed the organizations information and agreed to
* uses high-pressure tactics to secure a donation before the potential donor has had a chance to make an informed decision about giving
* asks for donations in cash
* offers to send a courier or overnight delivery service to collect the donation immediately;
* guarantees sweepstakes winnings in exchange for a contribution.
Even if the organization is legitimate, there's also a checklist you should run through to be sure your money will be well spent.
*Donate to recognized charities with a history. Charities that spring up overnight in connection with a recent natural disaster or news story may disappear just as quickly with your donation. Even if the charity is well-meaning, it may lack the infrastructure to provide much assistance.
*Give directly to the charity, not to paid solicitors who contact you on the charity's behalf. Some charities hire professional fund-raisers, who then keep a portion of the money they collect. That leaves less money for good works.
*Call the charity. Find out if the organization is aware of the solicitation and has authorized the use of its name. If not, you may be dealing with a scam artist.
*Ask whether the person is a paid fund-raiser and, if so, what percentage of your donation goes to the charity. If you're not comfortable with the amount, you may consider donating to a different organization or sending your gift directly to the charity.
*Don't give out personal or financial information - including your Social Security number or credit card and bank account numbers - to anyone who solicits a contribution from you. Scam artists use this information to commit fraud against you.
*Don't give or send cash. For security and tax record purposes, contribute by check or credit card. Write the official name of the charity on your check. You can contribute safely online through many official charity websites. Look for signs that the site is secure - such as a closed padlock on the browser's status bar - before you enter any personal information. When you are asked to provide payment information, the website URL should change from http to shttp or https, which indicates that the transaction is encrypted or secure.
*Ask for identification and written information when you're approached in person. Written materials could include the name, address, and telephone number of the organization, and information about the charity's mission, how your donation will be used, and proof that your contribution is tax deductible. When in doubt, call the charity to make sure it is aware of the solicitation and has authorized the use of its name.
*Before donating to a charity, contact BBB for information on the organization. BBB has Charity Reports available to the public upon request. The Catalogue for Philanthropy is another valuable resource for charity information to consider when making a donation.
*Trust your gut - and check your records if you have any doubt about whether you've made a pledge or a contribution. Callers may try to trick you by thanking you for a pledge you didn't make. If you don't remember making the donation or don't have a record of your pledge, resist the pressure to give.
*Be wary of charities that spring up overnight in connection with current events or natural disasters. They may make a compelling case for your money, but as a practical matter, they probably don't have the infrastructure to get your donation to the affected area or people.
*Know the difference between "tax exempt" and "tax deductible." Tax exempt means the organization doesn't have to pay taxes. Tax deductible means you can deduct your contribution on your federal income tax return.
*Do not send or give cash donations. Cash can be lost or stolen. For security and tax record purposes, it's best to pay by credit card. If you're thinking about giving online, look for indicators that the site is secure, like a lock icon on the browser's status bar or a URL that begins "https:" (the "s" stands for "secure").
Finally, there are sources online where you can research the reputation of anyone asking your for a charitable donation.
For example, you can used the Better Business Bureau's West Giving Alliance.