How To Avoid Charity Scams & Fake Charities with Wiser Donations

Most of us have the gift of human compassion. Whether it is the victim of a dissease or the little orphan across the street, we are glad to help out. Billions of dollars a day go to charities worldwide. People donate to charities as a sign of goodwill and grace.

Unfortunately, thieves know that and take it to their advantage. How do you know your donation is actually helping people? Unless you donate directly, the foundation decides where the money goes. As usual, a part will go for taxes and expenses to sustain the non-profit. The real amount they give further is usually anywhere from 50% to 90%.

But what charity should you support? It’s not enough to listen to big promises. What makes you think they are the right foundation to do so? Before you give anything to a charity, perform your due diligence ahead of your contribution. If you don’t know who you’re dealing with, it could turn into a charity scam.

Exposing Fake Charities

Exposing fake charities

Scammers can disguise as charities to make illegal profits. They benefit from other’s naivety and take their contributions.

Success depends on how many people you can trick. That’s why these schemes aren’t that dangerous: they cannot steal enough money before getting exposed. They can organize cash-grabs on holidays or at events, for example.

Someone approaches you asking to raise money for a cause. They could knock at your door, send an email, or make a phone call. You think you are helping a charity, but there’s no clue.

Ask them questions, and they will answer with vague ideas and fluff. The website will look just as confusing. After you give them money, you never hear from them again.

Fake VS Real Charities

Fake vs real charities

Any group can disguise as a legit charity. Make sure to research and learn about the following red flags to avoid fraud.

Reach-out Method

Nonprofit Foundations get to be known by sharing their message. Because their mission is (supposedly) for a good cause, a charity doesn’t need too much persuasion for others to donate. All they need to do is inform the public about their movement, so people can make informed donation decisions.

A legit charity focuses on spreading the message and create awareness. In business terms, they do inbound marketing, attracting the right people.

Fraudulent non-profits do the opposite. Scammers target anyone who can give them money and use intrusive tactics, such as phone calls, public collections, and cold emails.

Charity Conditions

Charity members want to know where their money goes. Otherwise, they’d better donate in person. Legit organizations are 100% transparent with their conditions. If you ask them, they’ll make a quick review of their rules and rates.

In charity scams, fraudsters are superficial and flexible. They tell you what you’d like to hear and do anything to make you say “YES “. If some information could potentially expose the scheme, they won’t tell you about it, unless you address it.

What percentage goes to the cause?

Some will say unrealistic rates.

  • “90%! 100%! We will also reward you if you participate (which is illegal)!”
  • “If you donate TODAY, we will give you back 10% of the amount.”
  • “You don’t like it? Don’t worry. There’s more…!”

Very quickly, you will recognize a scammer by the difficulty of saying “NO” to them. They picture the classic pushy salesman. Don’t get fooled by their incentives and “gifts.” If their conditions influence your decision, refuse them.

Charity Name And Documents

No matter the message, you will need to see the papers of the foundation. Each charity has these documents and will show them to you if you request them. Although it helps to verify the charity, papers aren’t reliable enough. Scammers could:

  • Falsify documents to confirm their identity.
  • Copy a well-known charity to look as legit as they are.
  • Use vague terms and euphemisms to mislead people.

Don’t get deluded by the cause. Without a proper institution, it’s a promise without realization.

How To Recognize Fake Charities

How to recognize fake charities

Good personal research is the foundation of any decision. Be wary of fake donations during a crisis. Tsunamis, fires, wars, epidemics. Sadly, but low life scammers turn disasters into their own money making opportunities. Here are some practices fake charities do:

On-The-Spot Donations

Charity scams are like thieves gently asking to steal your money. They reach out as warm, good-looking people with a sales script. When “selling” on the phone, they can change their ID to look like a person from your area.

Do they want you to give money right this moment? Do they insist on making you “an offer you can’t refuse”? Do they try to remove every objection you give them?

Pressure prevents people from thinking clearly. You should never trust anyone who wants to put you in such a situation.

Payment Process

Ask them about payment options. They almost always say “cash.” If they accept credit, you’ll need to send it to their account instead of the charity directly. They may give you unusual payment methods with no protection.

Refrain from donating if they offer a PO Box as their only payment option. All charities should support a wire transfer at least. A PO Box is anonymous.

Now, what happens after you donate?

There’s no receipt. No way to find out where your contribution goes. All you know is you’ve given money to a stranger. And you probably won’t hear from them again.

It can make sense with low amounts. But what if you donate thousands of dollars? Wouldn’t you want to know what they have achieved with your help? The scammer finances his dreams, and you’ll never know about it.

The Patterns

The charity scam isn’t as simple as asking for money. They use many variations, depending on the reach-out method. The fraud may be a combination of schemes, which makes it easier to spot.

For instance, they may ask you to donate to get an incentive or commission. This charity uses the advance fee scam.

If the approach is online, the scammer may send the proposal as a chain email or a phishing attack. If they cannot convince you with one trick, they’ll try another one.

The more you know about potential scams, the more protected you are. Deceit doesn’t limit itself to the form of charity fraud.

Trust But Verify

It’s easy to prevent fraud when you know your charity. There’s no need in rushing to donate unless you research first. Visit the website, read some reviews, ask some questions.

If you feel something suspicious is going on, follow a simple rule: assume everything is wrong unless proven right. Don’t believe anything without evidence.

That will prevent you from online scams 99% of the time. But what if they approach you on the street? What to do when someone calls you on the phone? How do you react?

The ideal response is to let them say what they need to say. Tell you’ll call later after you think about it (research their history). If they don’t want to give you time, you should avoid dealing with them.

Preventing Charity Fraud

Preventing Charity fraud

It’s not common to find elaborate fake charities. As soon as people hear from a suspicious charity, it won’t take long before they report it. In any case, fraudsters look for the easiest path to get money.

Once you take measures, you are protected against most tricks. You can donate with more confidence if you follow these following tips.

Direct Donation

Whenever possible, donate for the cause by yourself. Charities need to cover expenses to sustain themselves, which reduces the donation. If you give, say, $100, less than $80 could go for the actual mission.

When you contribute in person, ensure that the maximum percentage goes for the cause. If you need to trust a foundation, at least research which ones you should help. Never help the first charity only because they reached out.

Check the Name

Carefully check the name of the company! Charity scams use similar to original names to cause confusion and obtain your donations.

National Cancer Society (SCAM) instead of American Cancer Society (REAL).

Verify Documents

Ask the charity to send you copies of their documents via email. If the material does not contain details on exactly how the money is used and the percent of donations which actually reach the given cause, ask them to provide you with this information.

If some other information is not written or is ommited and you would still like to know the details, call them. If they are hesitant, do not contribute. Legitimate charities withstand secrecy and never hesitate to prove who they are, what they do and how they do it.

Online Charity Review

It doesn’t matter if you never heard of an organization before. If they found you or you have found them, there was probably someone else who donated to them before. Thankfully, there are sites, that review the many non-profits around the globe.

There’s a good chance you’ll find the charity online: a website, reviews, videos. If there isn’t anything to verify the charity, it’s probably fake and you should look for an alternative.

Wrapping Up

Wrapping Up

For scammers, charities are opportunities to make easy money. Easy, depending on who they target. What makes this scheme so attractive is philanthropy. People give money expecting nothing in return. If scammers take advantage of it, they aren’t likely to ask for refunds or report it. That means low risk and high reward.

This scheme isn’t sustainable long-term though. It will fall as soon as the first victims start to lose and realize the scam. That limitation won’t stop fraudsters, however. After you reveal their fake organization, they may use another name and keep the scheme working. Not even mentioning the many tactics to hide someone’s identity.

Which leaves us with a simple truth. Dishonest people will keep tricking people with charities and other scams:

But we have a choice.

We can accept, or we can prepare for it. You won’t believe how many scams you can avoid by just becoming aware. Every time you learn about these wicked schemes, you’re turning into a hard target for scammers. You are far more protected than someone who never heard about it!

That brings us to the last point: report. If you put your money on a charity, we assume you really want to make a difference in other’s lives. The sum of everyone’s efforts allows good charities to fulfill their vision.

When you report the fraud, you help all the community to spot the scheme and stop it. As a result, people can fight for causes that do matter — whether it is helping the hungry, promoting good education, or saving the environment.

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