Charities that Take Advanatge Warning Signs

When a person responds to a donation request from a charity, they like to think they’re helping to improve the lives of those in need, not helping to pad the wallet of a scam artist. Unfortunately it’s all too common for dishonest people to create fake charitable organizations and solicit donations from unknowing gracious donors.

“One common trick is when an organization uses a name that is similar to a better-known, established charity,” says Michael Whalen, a Criminal Justice and Legal Studies instructor for South University Online Program.

If a charity can’t provide a tax-deduction form, Whalen says to take this as a red flag that the organization may not be legitimate.

Other tax-related warning signs are when the charity isn’t willing to provide you with their EIN number, a letter from the IRS confirming their status as a public charity, or a copy of their last three years of Forms 990, says Sandra Miniutti, who serves as both the vice president of marketing and the CFO at Charity Navigator.

Whalen and Miniutti agree that high-pressure solicitation for a donation request should also be considered a red flag, as charity scam groups don’t want donors to have the chance to conduct any background research on them.

Whalen says there are certain types of charities and donation request methods that are more likely to be a scam than others.

“One favorite tactic is to make telemarketing calls for donations in the aftermath of a natural disaster,” Whalen says. “The images on the TV news and internet are strong motivators for many people, making it easy for a scam artist to swoop in and take advantage of their sympathies.” 

Miniutti says it’s important to remember that the victim of a natural disaster isn’t going to be able to contact you directly by phone, email, or the internet.

Other than giving a dollar to the Salvation Army Santa Claus, don’t give cash.

Another tactic used by charity scam artists is to contact a potential donor and thank them for making a pledge, even when they didn’t actually donate any money, Whalen says.

“You’d be surprised how many people will actually donate in that situation, either believing that they forgot they had made a pledge earlier, or simply not wanting to seem cheap by arguing with the caller,” Whalen says.

Miniutti urges donors not to give money or the phone and to be careful when clicking on appeals made through social media, unless you’re sure the source is a legitimate charity.

Charity Navigator has composed a list of other common donation request scams.