Charity Fraud
Fraud Alerts
In 2020 alone, Americans donated $471 billion to charity organizations according to Giving USA Foundation’s annual report, supporting philanthropic causes like education, healthcare, arts, and numerous other causes.
Sadly, this generosity also poses an opportunity for scammers. Charity fraud refers to scams where thieves pose as charitable organizations to capitalize on donors' goodwill. This “faux fundraising” is especially active around the holidays and following devastating events that garner national attention, like the COVID-19 pandemic or the war in Ukraine. Many scams include organizations that claim to benefit veterans or disaster relief efforts, playing to the emotional appeal to support these causes.
Charity scams can be hard to spot, as they often have professional websites and direct mail, or even use door-to-door solicitations. While some faux charities operate outside of the law, others are technically legitimate charities that commit fraud by keeping most donated funds. In one scheme, the charity was found to be keeping 90% of all donated monies and only directing 10% to the charitable mission.
As with all fraud, it's important to be aware of the telltale signs:
Beyond doing your research, it is important to monitor your credit card closely and keep records of your donations. Money Management allows you to connect multiple accounts for a complete view of your spending across credit, debit, and savings accounts. Additionally, never provide your private information, like social security number or date of birth, to any unknown entity no matter how worthy the cause may seem.
Sadly, this generosity also poses an opportunity for scammers. Charity fraud refers to scams where thieves pose as charitable organizations to capitalize on donors' goodwill. This “faux fundraising” is especially active around the holidays and following devastating events that garner national attention, like the COVID-19 pandemic or the war in Ukraine. Many scams include organizations that claim to benefit veterans or disaster relief efforts, playing to the emotional appeal to support these causes.
Charity scams can be hard to spot, as they often have professional websites and direct mail, or even use door-to-door solicitations. While some faux charities operate outside of the law, others are technically legitimate charities that commit fraud by keeping most donated funds. In one scheme, the charity was found to be keeping 90% of all donated monies and only directing 10% to the charitable mission.
As with all fraud, it's important to be aware of the telltale signs:
- Sense of urgency around giving: if you experience pressure from an organization to give immediately, it could be a warning sign. Legitimate organizations will gladly welcome your donation at any time.
- Request for payment by cash, wire transfer, or gift card: different from credit cards, these forms of payment are hard to trace and the preferred payment method for charity scams.
- Acknowledgement for a donation you don’t recall: faux charities will try to lower your resistance by making you think that you’ve previously supported the organization.
Beyond doing your research, it is important to monitor your credit card closely and keep records of your donations. Money Management allows you to connect multiple accounts for a complete view of your spending across credit, debit, and savings accounts. Additionally, never provide your private information, like social security number or date of birth, to any unknown entity no matter how worthy the cause may seem.
FAQs
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Charity fraud refers to scams where thieves pose as charitable organizations to capitalize on donors' goodwill. This “faux fundraising†is especially active around the holidays and following devastating events that garner national attention, like the COVID-19 pandemic or the war in Ukraine. Many scams include organizations that claim to benefit veterans or disaster relief efforts, playing to the emotional appeal to support these causes.
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Charity scams can be hard to spot, as they often have professional websites and direct mail, or even use door-to-door solicitations. While some faux charities operate outside of the law, others are technically legitimate charities that commit fraud by keeping most donated funds.
In one scheme, the charity was found to be keeping 90% of all donated monies and only directing 10% to the charitable mission.
As with all fraud, it's important to be aware of the telltale signs:
- Sense of urgency around giving: if you experience pressure from an organization to give immediately, it could be a warning sign. Legitimate organizations will gladly welcome your donation at any time.
- Request for payment by cash, wire transfer, or gift card: different from credit cards, these forms of payment are hard to trace and the preferred payment method for charity scams.
- Acknowledgement for a donation you don't recall: faux charities will try to lower your resistance by making you think that you've previously supported the organization.
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Our Money Management tool allows you to connect multiple accounts for a complete view of your spending across credit, debit, and savings accounts.
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Watchdog organizations like Charity Navigator, CharityWatch, and the Better Business Bureau's Wise Giving Alliance tools supply ratings for non-profit organizations based on how much of the raised money is given directly to the intended mission.
Wise Giving Alliance suggests that you should support organizations that direct at least 65% of total expenses to the mission, instead of overhead or other expenses.