NEW YORK (MainStreet) — The holidays are a tough time to be in need, and unfortunately there’s way too much of that going around these days. Just consider these facts: the U.S. Census Bureau says that 16% of Americans live below the poverty line, WorldHunger.org data shows that children in 3.9 million U.S. households went hungry in 2010 and recent numbers from the Department of Agriculture show that 42 million Americans are now on food stamps.
These are gut-wrenching numbers, leading many Americans to seek out charities to donate to during the holidays. And of course that’s a great idea, but charitable givers should tread with caution. Unfortunately there is no shortage of charlatans running bogus charities whose proceeds only aid the scam artists running the “charity.”
How do you separate the legitimate charities from the scams? Here are five tips to follow:
- Check out your state attorney general’s office to see if a charity is on the up-and-up. The Consumer Fraud Reporting website has a good list, including phone numbers and websites. You can also find an organization you can trust at the charity watchdog website CharityNavigator, which rates charities according to their financial health and their accountability and transparency.
- Ask for an IRS Form 990. Any legitimate charity should be happy to provide you with their Form 990 – the IRS form that provides detailed financial information for potential givers. If a charity balks at the Form 990 request, it may be a sign that they are not great at getting donors' money to the intended beneficiaries. Check out Charities With the Highest Admin Costs and the 15 Highest-Paid Charity CEOs for examples.
- Shred unwanted charity mailings. Even legit charities will send “pre-addressed” forms to make it easy for you to donate to their charity. When you get one in the mail, rip it up into pieces and even shred it if you can. Identity thieves make a good living raiding trash cans in search of documents with your personal information in easy access.
- Don’t click on any emails asking you for money. Scam artists use the holidays to appeal to your altruistic side – and they like to use email to reach out to you. Don’t fall for it. Bogus charities use phishing scams to capture your personal information online once you click on an email link from an unknown charity. To avoid this, never click on an embedded link or an email attachment. If you want to donate online, go to a charity's homepage and follow the directions on their donations page.
- Reach out to your own charity of choice. Giving to a good charity is a great feeling, but getting scammed by a phony charity is a lousy one. Change the equation by researching the groups you want to give to on your own – MainStreet's done all the legwork you need: Check out 10 Great Charities That Need Holiday Help, 8 Great Charities That Feed the Hungry or The Best Charities That Take No Taxpayer Cash. By taking the initiative and following up yourself, you’re pretty much eliminating any chance of getting scammed.
Giving to those less fortunate is really what the holidays are all about, so make it easier to leave your mark by doing some good due diligence and researching the charities you want to help before you give.
That way, “doing well by doing good” is a task much easier to accomplish this December.