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How to Practice Safe Charitable Giving

How to Practice Safe Charitable Giving

November 23, 2022

As we move into the holiday season, many people’s thoughts turn toward charitable giving for organizations and causes that are near and dear to their hearts. Unfortunately, for every legitimate cause or charitable need, there are also people looking to take advantage of our good will to benefit themselves. Because you want your donations to count, here are some steps to take ahead of time to avoid being scammed.

Never Rush to Donate

Even when natural disasters create a sense of urgency to donate immediately, it usually is good to take the time to make sure that your gift for disaster relief is going to an organization where it will help the most. This is particularly good advice when you receive a phone call. While some legitimate fundraisers may call, potential scammers often try to pressure you into a donation over the phone, particularly asking for a gift card or wire transfer.   Never let anyone rush you into a decision. Ask them for time to research their organization. If they resist giving you additional time, then it probably is a scam. Hang up.

Research

Whether or not you are familiar with a charity beforehand, some simple online research can help you choose the best charity for your gift. Visit the charity’s website to see if it gives you any details about how they use the charitable gifts they receive. The charity should be able to tell you how much of your gift will go directly to supporting the programs you care most about.  Also, do a search for the charity’s name with some additional keywords, such as “complaints,” “reviews,” or “rating.” Be suspicious if it’s difficult to find any of that information.

Use Third-Party Information

There are a number of third-party organizations that compile information on various charities and can help you research the charity that you are considering. Sites like BBB Wise Giving Alliance, Charity Navigator, Charity Watch, and Candid provide valuable insights into various charities and potentially fraudulent organizations.

Tax Benefits

Reducing your tax burden is one thing that should always be considered when making a charitable gift. If you anticipate making an annual gift to the same organization, there are charitable trusts that can be set up to make that annual gift while reducing your taxes. This involves complex rules and regulations, so it is always good to work with a financial advisor who is familiar with the applicable tax code.