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Charitable Giving Scam

Donating to charities and fundraising is a generous gesture. But how can you tell if your donation ends up in the right place?

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Updated:

October 1, 2024

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Charity and Disaster Fraud

The FBI describes charity fraud as schemes that "seek donations for organizations that do little or no work—instead, the money goes to the fake charity’s creator." These scams can come in many forms, for example, by phone, emails, internet and social media posts, crowdfunding platforms, and face-to-face contact. While these scams can happen at any time, they are especially prevalent after high-profile disasters. Always use caution and do your research when you are looking to donate to charitable causes. After a natural disaster or other emergencies, carefully vet any contractors before hiring them to work on your home or business (Federal Bureau of Investigation [FBI], n.d.).

The Federal Trade Commission (FTC) collected some of the tricks scammers might use. Scammers may:

Change the caller ID to make it look like it is from your local area code.
Use names that sound a lot like the names of real charities.
Rush you into donating.
Trick you into paying them by thanking you for a donation that you never made.
Ask you to donate in cash, by gift card, or by wiring money.
Make vague and sentimental claims, but give no specifics about how they will use the donation.
Claim that your gift is tax-deductible, when it is not.
Guarantee sweepstakes winnings in exchange for a donation. This is not only a scam but also illegal.

When you see any red flags or are unsure how a charity will use your donation, consider giving to a well known organization instead (FTC, n.d.).

Furthermore, if a donation request comes from a group claiming to help your local community (for example, local police or firefighters), first contact the beneficiary and ask if they have heard of the group and are getting financial support from the funder.

Be aware when you use text to donate. There might be extra charges on your mobile phone bill. If you’ve asked your mobile phone provider to block premium text messages, you won’t be able to donate this way (Federal Deposit Insurance Corporation [FDIC], 2021).

The FBI (n.d.) recommends these steps before sending any money:

Give only to established charities or groups whose work you know and trust.
Check the website's address to make sure it is a legitimate charity organization, and make sure it ends with ".org".
Research and examine the charity's track record using the FTC's resources.
Pay with a check or a credit card. It's probably a scam if a charity or organization asks you to donate through cash, gift card, virtual currency, or wire transfer.
Practice good cyber hygiene:
- Don't click links or open email attachments from someone you don't know.
- Manually type out links instead of clicking on them.
- Don't provide any personal information in response to an email, robocall, or robotext.

In addition, FTC suggests reviewing your statements closely and making sure you were only charged for the amount you agreed to donate. Pay attention to details, especially if it is a one-time-only or a recurring donation. Keep a record of all contributions (FTC, n.d.). The best practice is to make an annual donation plan and learn if the organization is eligible for tax-deductible contributions (FDIC, 2021).

Report Fraud

Suppose you're a victim of charity or disaster fraud with reportable information (name of the organization or fundraiser, phone number, and what the fundraiser said). In that case, you can file a report on any of these pages:

Contact your state consumer protection office
Report fraud to the FBI at tips.fbi.gov
Report online fraud to the FBI's Internet Crime Complaint Center
Report scams to FTC.gov/complaint
Find your state charity regulator at nasconet.org and report it to them, too.
Report suspected disaster-related fraud to the National Center for Disaster Fraud

In Pennsylvania, contact the Department of State online or by mail at:

Bureau of Corporations and Charitable Organizations
Charities Section
207 North Office Building, Room 212
Harrisburg, PA 17120
717-783-1720
800-732-0999
ST-CHARITY@pa.gov

Here are some resources for verifying that a charity is legitimate

In summary, to ensure that your donation benefits the organization you want to help, plan your gifts and keep a record of them. Research if the organization is legitimate and tax-deductible and what percentage of your donation goes to the cause. Pay with a check or a credit card.