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July 2013

Storm Damage Aftermath: Be Careful When Donating to New Charities


Oklahoma tornado devastation has caught the attention of the entire country. I know many cooperative members are contributing to charities to help alleviate the suffering of the families who lost loved ones or their homes. Unfortunately, this is a time when charity scams seek to take advantage of well-meaning contributors. Thieves follow the headlines and literally create new charities overnight. These so-called charities seek your money even though little, if any of it, will be used for real charitable purposes. They will then move on to the next natural disaster to prey on even more consumers. How should you protect yourself and make sure your money gets to the right place? 

Rule #1—Hang Up on Those Charities that Call You. Never, ever, give out your credit card or other personal identifying information over the phone to someone who called you. You simply cannot verify whether the callers are who they say they are, or that they will use your money for the intended charitable purpose.

I hear all too often from readers who report that a family member or friend has been scammed out of hundreds or even thousands of dollars by someone who called and convinced them that they represented a legitimate charity like the American Red Cross, Special Olympics, or Salvation Army, to name a few.

Others reported that the person they know donated over the phone to a charity that “sounded legitimate” such as one seeking funds to allegedly help those in law enforcement. Thieves know we are tempted to respond favorably to so-called charities with the terms “sheriff” or “police” in the name. Once again, your best defense is to hang up right away. Don’t question the caller, since many scam artists are professionals who work hard to keep potential victims on the line in the knowledge that the longer they talk, the more likely they will convince people to part with their hard-earned money.

Rule #2—Do Not Respond to Charities Soliciting You by E-mail. Never, ever, respond to e-mails from alleged charities. As with phone calls, how do you really know they are who they say there are? Also, many scam artists use web addresses that resemble those used by legitimate charities. Beware that if you fall just once for such a scam, you will quickly receive more by e-mail.

Rule #3—Check Out Charities First Before You Donate. Donate to charities with a track record. Your safest course is to look up the alleged charity in a verified database made available online by the Minnesota Charities Review Council at http://www.smartgivers.org/Charity/Search. The council has been a great source of information for 65 years to determine whether a charity deserves your money. It uses 27 different standards in such areas as public disclosure, governance, financial disclosure, and fundraising to determine whether or not a charity is living up to its commitments. More than 400 charities have been awarded the council’s “meet standards” seal of approval. Many of these charities are national in scope so the list is useful for those of us who live in Wisconsin as well. For Wisconsin-based charities, the Wisconsin Better Business Bureau also makes more limited review information available online at: http://www.bbb.org/charity-reviews/wisconsin/.

Finally, visit: http://www.consumer.ftc.gov/features/feature-0011-charity-scams for other donation safety tips.


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