Recently a friend signed up for a popular 5k, thinking that the money she was spending was going to a charity. Two weeks before the run was to take place, the race company sent out a form email that the event was cancelled due to low registration, with no mention of a refund or reschedule. When my friend tried to reply to the email and call the company, it was as if it didn’t exist. She had just been scammed out of $50. I wondered what she could have done differently, to avoid being scammed by charities.
How to Avoid a Charity Scam
The timing couldn’t have been more perfect for Kiplinger’s article about this very subject. I’ll recap it here.
- Hang up on telemarketers: You should decline any requests to give over the phone. Not only does it put you on the spot to donate, telemarketing companies that solicit donations on behalf of charitable organizations often keep a significant portion of the funds they raise. So your money isn’t going directly to the cause.
- Don’t wait for charities to come to you: Figure out what causes are important to you, then find charities that are raising funds for those causes. Having a plan will make it easier to avoid impulse donations.
- Research before you give: Just because an organization claims to do good doesn’t mean it actually does. Be wary of organizations that spend more than 25% on overhead. If my friend had done her homework, she would have discovered that the “charity” was really a start-up company by a shady entrepreneur that had been in hot water before.
- Never send cash: Make donations by check or credit card for security and tax reasons. Always ask for a receipt.
Do you like to donate items instead of money? Check out these national charities for donation pick up.