Beware of Charity Scams at the Holidays and All Year ‘Round

Charities need money all year ’round, so they solicit donations via telephone, postal mail, and email throughout the year. Many step up their efforts around the holidays because people tend to feel generous at Christmas and want to get in their last tax deductions before January 1.

Unfortunately, charity scams are always around, and they kick into high gear at the holidays, too. I support legitimate charities, and I’ve learned to recognize scammers who try to steal funds from those who really need it. Here are my top three tips for avoiding charity scams:

1) Never give to a telemarketer who calls you on behalf of a charity. Follow this rule for two reasons. First, even if callers are working with a legitimate charity, they’re likely taking 70, 80, or even 90 percent of the funds or more. Most of your donation will go into the telemarketing company’s pockets.

I love to ask these callers how much the charity will actually get. Sometimes they tell the truth, and it’s usually less than 10 percent. Others pretend they don’t know or simply hang up on me. That’s fine because I don’t give donations over the phone anyway. If I want to donate to the cause, I send a check directly or give money through the official website. That way, I know that 100 percent of the funds go to the charity.

The second reason is that scammers either fraudulently claim to represent a well-known charity like the Red Cross or March of Dimes or they use a name that’s similar to a legitimate organization. Two such charities were busted in September, 2013. They claimed to help veterans and breast cancer victims, but the veterans never got a penny and women with breast cancer only got $600 out of more than $366,000 collected by telemarketers.

2) Never respond to an email charity plea. Really, you should never respond to any email that asks for money. Chances are good that your credit card number or bank account information will wind up in criminal hands.

I see a flood of email solicitations after every natural disaster, like the typhoon in the Philippines and the Midwest tornadoes. The volume also increases around Christmas. I hit “delete,” and I suggest that everyone else do the same.

If a message really touches your heart, research the supposed charity online. In the unlikely event that it’s legitimate, send your money directly to the organization. You have no way of knowing whether the email really came from a charity or a scammer using their name who will intercept your donation via a fake link in the message.

3) Give to local charities. The best way to know that a charity is legitimate is to see its work with your own eyes. Whether you want to help hungry kids, struggling families, sick children, homeless people, or abused animals, you’ll find an organization that helps them in or around your community.

Instead of responding to a faceless phone call or email, give your money to a place you can actually visit. It’s so much more powerful when you see your dollars in action, and it also removes the possibility of being scammed. This is my main rule of charitable giving; I don’t give a penny until I visit a place and see its work firsthand.

Here’s a bonus tip that’s applicable to all charities. Legitimate charities are listed on the Charity Navigator website, which helps you decide the best places to donate your hard-earned cash. Some charities spend a lot of money on promotion and overhead, while others spend the lion’s share on actually helping people. Charity Navigator gives you the breakdown so you’re well equipped to make giving decisions.