How to Avoid Getting Scammed This Season

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It’s that time of year again: the holidays are upon us and, if you’re anything like most Americans, you’ve probably already started your holiday shopping. Polls show the average American this year is planning on spending around $500 on family and loved ones this year for the holidays.

 

However, what if you or a loved one isn’t into getting ‘stuff’? For example, my Dad. My dad says he has everything and, if he doesn’t have it, he just buys it for himself throughout the year. There is literally nothing on Earth I could afford that I could buy for my Dad. He doesn’t want or need anything. What do you get for the guy who has everything?

 

If your loved ones are like my Dad, they may suggest you donate in their name. What a great idea, right?! Avoid the commercialism of the holidays, donate to a charity in need, and make a loved one happy by not giving them unnecessary ‘stuff’. All you have to do now is pick a charity that your loved one cares about, donate online, and done, right?

 

Unfortunately, it’s not quite that simple. There are a lot of scammy charities out there, and it can be hard to find legitimate charities. However, with a little bit research and realism, you can avoid the grinches out there who are trying to take advantage of your merry and generous nature!

 

 

Sometimes People Are Horrible/Quiz Time!

 

You probably saw, after the Newtown shooting in Connecticut, dozens of charities sprout up online, asking people to donate to the victims’ families. You may have even donated to them yourself. While most of those charity websites were legitimate, many, including one charity named after one of the children murdered, were fake. None of the money was getting to the families and community in Newtown at all.

 

Malicious people trying to dupe you and me out of our money aren’t new – fake websites and organizations popped up after Hurricane Katrina, September 11th, and after the Columbine shootings. All of those scammer websites were designed to take advantage of your goodwill and desire to help those affected by tragedies.

 

Before you think you would never get duped, let me give you a list of charity names, and you tell me if they seem legitimate or not. When I say legitimate, I mean: the bulk of the donations they receive go to aid programs and not for operating expenses or back into fundraising schemes. Are you ready to tell me what’s real and what’s fake? Don’t cheat by looking at the bottom of this post!

 

1. Children’s Wish Foundation International?
2. Make a Wish Foundation?
3. The Cancer Fund of America?
4. The Cancer Care Foundation?

 

So How Can We Avoid Getting Scammed?

 

First things first: just because a charity uses some of its donations for operating expenses and fundraising doesn’t mean it’s bad. When I talk about ‘fake’ or ‘scam’ charities, I’m talking about those who don’t even bother to hide what they’re doing: their CEOs make hundreds of thousands while giving back less than 10% to the cause they’re supposed to be supporting. Or if it takes 70% to run operations – just no.

 

So how can you avoid getting taken advantage of? Luckily, there are several great websites out there that rank charities according to financial performance and accountability metrics, like Charity Navigator. For example, the Arizona Humane Society (one of my favorite charities) scores a 3 out of 4 stars in their rating, with over 80% of expenses going to programs and services. To me, that’s enough, but you may want to investigate a few of your favorite charities and see how they fall on the ranking scale.

 

If you want to go further, GuideStar contains records for all registered nonprofits and lets you view their IRS records for free. Unlike Charity Navigator, GuideStar doesn’t rank the charities, but instead let’s you view their filings to determine for yourself if you agree with their expenses. In my AZ Humane Society example, I read that the AZ Humane Society is committed to transparency and is a “legitimate charity” to the IRS. What I wish I didn’t read, however, are the reviews from people about the charity. Read those at your peril!

 

How to Avoid Being Scammed During the Holidays

 

During the holidays, people asking for charity donations may be pushier than usual. A good charity won’t coerce you into donating your money, but some of the less-reputable charities might. A few things to consider when approached by an unknown charity:

 

• The charity refuses to provide detailed information about its mission, costs, or how your donation will be used
• Won’t provide proof your contribution is tax deductible
• Uses a name that closely resembles a better-known and reputable charity
• Uses high pressure tactics to get you to donate immediately
• Asks you to wire money

 

All of those tactics are red flags that you’re probably dealing with a scam – either the entire charity, or someone pretending to be affiliated with a well-known charity. Don’t let the holiday merriment cloud your judgment – if someone is trying to guilt you into donating immediately, back away, hang up, or click out.

 

I’d never say you shouldn’t donate to a charity because of scammers. If you do your research and feel comfortable donating (financially), a charitable donation in someone’s name as a gift is an awesome way to show your love and help out your community.

 

Are you donating to charity this year and, if so, how did you pick your charity?

 

Curious about the quiz answers? I didn’t forget you! How’d you do?

 

1. Fake!
2. Real
3. Fake, and it’s ranked one of the 50 worst charities in America
4. Real