It’s an unfortunate reality – the potential for giving scams becomes greater in the wake of a tragedy. According to the Better Business Bureau (BBB) Wise Giving Alliance, donors should take care when giving to organizations claiming to support efforts to minimize the aftermath of a tragedy. If you’re considering making a donation, remember to:
1. Give Thoughtfully
– Take the time to check out the charity to avoid donating to a questionable or poorly managed effort. The first request for a donation may not be the best choice. Be proactive and find trusted charities that are providing assistance.
2. Check Registration
– About 40 of the 50 United States require charities to register with a state government agency (usually a division of the State Attorney General’s office) before they solicit for charitable gifts. If the charity is not registered, that may be a significant red flag.
3. Respect Victims and Their Families
– Organizations raising funds should have gotten permission from the families to use either the names of the victims and/or any photographs of them.
4. Verify Where Donations Go
– How will your donation help? Watch out for vague appeals that don’t identify the intended use of funds. In addition, unless told otherwise, donors will assume that funds collected quickly will be spent just as quickly. See if the appeal identifies when the collected funds will be used.
5. Look for Transparency
– After funds are raised, it’s important for organizations to provide an accounting of how funds were spent. Transparent organizations will post this information on their websites so that anyone can find out and not have to wait until the audited financial statements are available.
6. Exercise Caution with Assistance Funds
– Some families may decide to set up their own assistance funds. Be mindful that such funds may not be set up as charities. Make sure that collected monies are received and administered by a third party such as a bank, CPA or lawyer. This will help provide oversight and ensure the collected funds are used appropriately.
7. Note Advocacy Organizations
– Tragedies can also generate requests from a variety of advocacy organizations. Donors can support these efforts, but note that some of these advocacy groups are not tax exempt as charities. Be wary of newly created advocacy groups.
8. Avoid Unfamiliar Links
– Never click on links to charities on unfamiliar websites or in texts or emails. These may take you to a lookalike website where you will be asked to provide personal financial information or to click on something that downloads harmful malware. Don’t assume that charity recommendations on Facebook, blogs or other social media have already been vetted.
9. Opt for Established Organizations
– This is a personal giving choice, but an established charity will more likely have the experience to quickly address the circumstances and have a track record that can be evaluated. A newly formed organization may mean well, but may not be well managed.
10. Review Tax Deductibility
– Not all organizations are tax exempt as charities under section 501(c)(3) of the Internal Revenue Code. Donors can support these entities if desired. Contributions that are donor-restricted to help a specific individual or family are not deductible as charitable donations, even if the recipient organization is a charity.
Published with permission from RISMedia.