Even after more than two decades of operating a financial advisory in the Philadelphia region, Joel Steele is inspired when clients tell him they want to donate money to charity.
“But the problem is that it’s gotten much more difficult to know if your donations are going to the people you are directly trying to help,” said Steele, co-owner and financial adviser with Steele Financial Solutions in Cherry Hill. “Charity scammers are running rampant.”
Solicitors are on the phone, at your door, in your email, and in your mailbox.
“We’re constantly inundated with people looking to take our money and put it in their pockets for the wrong reasons,” Steele said. “This has led many people to back off — in part or in full from — donating to charities.”
One way to reduce the chance of misappropriation is to contact the charity directly, Steele said. “Yes, it’s easier to put cash in a tin can or buy things from a stranger, but these are more likely to end up in that person’s pocket.”
Also, he recommends, when you donate directly to charities, get a receipt and check with your income tax preparer or review deduction guidelines to understand potential tax benefits.
Evaluating Giving Tuesday solicitations
Everyone knows about Black Friday shopping, and recent years have seen the additions of Small Business Saturday and Cyber Monday in the days after Thanksgiving.
In 2012, Giving Tuesday joined the lineup, promoted by the 92nd Street Y in New York and the United Nations Foundation. It caught on quickly, as more organizations joined in on the opportunity to fundraise.
Giving Tuesday encourages generosity, but it’s also a time for scammers to ramp up fraud tactics. Scammers may use fake charities or misuse real ones to take advantage of donors.
If you get direct mail or a call, text, email, or social media message asking you to donate to a nonprofit, pause for a moment to dig deeper.
Your heart immediately wants to say “yes,” said Katherina ‘Kat’ Rosqueta, founding executive director of the Center for High Impact Philanthropy at the University of Pennsylvania. But unless you have personally been helped by that nonprofit or know someone who was, it’s hard to know whether the nonprofit is actually making a difference.
“That’s where your head comes in,” Rosqueta said. Consider running a quick Internet search for the charity’s name, along with “scam” or “complaints” to see if there have been any negative feedback or investigations, she said.
Of course, most donors want to do more than just avoid fraud.
“They want their donation to make a real difference,” Rosqueta said.
Her center at Penn created a “High Impact Giving Toolkit,” updated each year and available for free. It highlights vetted nonprofits and provides links to organizations like Candid, Charity Navigator, and BBB Wise Giving Alliance, where potential donors can learn about organizations’ programs, team, and finances.
“Once you feel confident about a nonprofit’s work, consider donating online through an official, secure nonprofit website that uses HTTPS encryption,” Rosqueta said.
“Avoid links in unsolicited emails or social media posts. Credit cards and checks offer better fraud protection than debit cards or wire transfers,” Rosqueta said.
How to make online donations safer
The key to understanding fraud is that most scammers prey on your emotions.
“Fear, urgency, and promise of a quick win are some elements that exist in so many scam scenarios,” said Christopher Blackmore of TD Bank in Mount Laurel, who works in customer education in financial crimes prevention.
Blackmore said most “bad actors” will reach out and provide a number to call, link to click, or instructions for payment. “The goal is to make scenarios seem so real that you feel you must reply or something will happen.”
Financial industries should never ask for login credentials, passwords, or one-time pass codes, Blackmore said. “Technology is making it very difficult to identify what is real vs. fake.”
A text, email, or phone call is a very quick and easy way to contact a lot of people quickly and ask for a donation.
“These tactics are known as phishing, vishing, and smishing,” Blackmore said. A newer tactic, known as “Quishing,” utilizes QR codes.
When a donation ask includes a request for payments using gift cards, wires, and cryptocurrency, that should immediately raise caution, Blackmore said.
Donors might want to consider a third-party platform like PayPal, which safeguards sensitive financial information.
“Donors should stay mindful online and keep an eye out for the warning signs of common scams, including being wary of unexpected messages from strangers,” said Nick Aldridge, Global CEO of PayPal Giving Fund.
“We always encourage supporting causes you care about through trusted channels like PayPal Giving Fund, the PayPal Cause Hub, and Venmo Charity Profiles,” Aldridge said.
