Charity Scams

Clever charity scams abound. Here are four of the most common ones and how to avoid them.

The “Donate A Car” Deal – Donating a car to charity sounds like a win-win proposition. The donor has a hassle-free way to get rid of an old car and gets a tax deduction for doing it. The charity gets an asset it would not have had otherwise.

The problem is often very little of the car’s value goes to charity. For-profit businesses handling the cars on behalf of the charities pay costs to tow, condition cars and advertise. They then sell them at wholesale auctions, leaving very little for the charity.

Even worse, some sleazy middlemen purposely disable cars so they can be sold more cheaply, then re-sold for a profit after they are “fixed”.

Protect Yourself

The best way to donate a vehicle is to identify a charity that actually uses vehicles in its programs, for example, delivering meals to the homebound, taking elderly or blind people to the doctor or on errands, or training future auto mechanics.

Contact the United Way, Goodwill, Salvation Army, public radio station, community college or vocational school to locate a program that actually uses cars.

The Email Charity Scam – Unless you have signed up to receive email from a charity, do not respond to email charity solicitations. Real charities do not normally recruit new donors by email, and especially not by spam.

Email charity scams may use legitimate sounding names and link to a website where you can make a donation. These tend to be fake websites made to look like an organization's official site.

Be wary of websites that ask for personal information like your Social Security number, date of birth or bank account information, which can lead to identity theft.

Protect Yourself

If you want to help the charity mentioned in the email, contact them directly with a phone call or use a Google search to find their real website.

More and more charities are accepting donations made on their official websites, so it's not wrong to make a donation this way. Just don't use an unsolicited email to get there.

Police and Firefighter Charities – Police and firefighters put their lives on the line for us every day. So, some well-deserved backup often seems like the right thing to do.

But where is your donation to that police charity really going? Just because police leagues, sheriff's associations or firefighters’ relief organizations have the words “police” or “firefighter” in their name doesn't mean your local officers will be the ones who benefit.

Protect Yourself

Before you give, make sure you know whether the group is a local, state or national organization. Get specifics on the programs your donation will fund and make sure you understand how they will help your local officers. Get a phone number and wait to make a donation until you verify the information with the phone number the next day.

Ask how much of your money goes towards the officer program. If the donation is used to purchase an ad in the charity's journal or to buy circus tickets, most of it may well get eaten up in production costs.

Simply be cautious. Unfortunately, there are a lot of scam organizations that may sound legitimate, but do little or nothing to contribute to the police and firefighters that donors believe they are helping. Make sure your donation is actually making the contribution you want.

Prospect Fundraising – Many people first learn of a charity through a telemarketer call. (Charities are not bound by the Do-Not-Call list.) These calls are typically made by for-profit fundraisers hired on behalf of the charity.

Though many charities raise money this way, these for-profit companies may keep anywhere from 25 to 95 cents of every dollar they collect. Charities raising money this way count on repeat donors to offset the first year's fundraising expense.

Protect Yourself

Don't give as an emotional reaction. Instead, research any charity you are considering. Make sure they spend most of the donated funds on their programs and keep advertising and administrative costs below 25 percent.

A well-run charity welcomes questions.

Tips to Avoid Charity Scams

Sources: http://www.scambusters.org/charityscams.html and the Nevada Consumer Affairs Division