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How to avoid charity and fundraising fraud

When disaster strikes, most of us feel a need to help in some way. And, unfortunately, that’s precisely what scam artists are hoping for. To them, it’s the perfect opportunity to empty your wallet into theirs.

The Village Bank offers the following everyday fraud detection guidelines from the Federal Trade Commission to be sure your donation benefits the people you want to help:

  • Donate to recognized charities with a history. Look up the organization at the Better Business Bureau's Wise Giving Alliance, Charity Navigator, or the American Institute of Philanthropy (now called CharityWatch). Ask the caller "Are you calling on behalf of a charity? What is the name of your organization?"  
    (Special note: Visit the CharityWatch website for its top-rated list of charities involved in efforts to provide relief to victims of Hurricane Sandy, domestically and/or in the Caribbean, and what you can do to help.)
  • Look closely at charities with names similar to well-known organizations. Some phony charities try to gain your trust by using names that sound or look like legitimate organizations. Ask the caller "Can you point me to a Website or another resource for more information about your organization?"
  • Avoid giving cash gifts. They can be lost or stolen. For security and tax purposes, it's best to pay by check, made payable to the charity, not the solicitor. Ask, "Can you give me a receipt showing the amount of my contribution and stating that it is tax deductible?"
  • Be skeptical if someone thanks you for a pledge you don't remember making. If you have any doubts about whether you've made a pledge or previously contributed, check your records.
  • Reject high pressure appeals. Legitimate fund-raisers don't put you on the spot to give. Ask, "Can you mail me more information about the charity and how it works?" Do not do business with any charity offering to send a courier or overnight delivery service to collect your donation.
  • Consider the costs. When you buy merchandise or tickets for special events, or get "free" goods in exchange for giving, remember that part of your contribution was used to pay for it.
  • Be cautious of promises of guaranteed sweepstakes winnings in exchange for a contribution. According to U.S. law, you never have to give a donation to be eligible to win a sweepstakes.
  • After receiving a call asking for a donation, call the charity in question to find out whether it is aware of the solicitation and has authorized the use of its name.

Before you give, make sure the organization has the infrastructure to deliver the help it is claiming to provide.