Total charitable giving by Americans in 2006 was estimated at $295.02 billion. While many contributions are tax deductible, most people are motivated by the satisfaction they receive from helping others or supporting a cause they believe in. Unfortunately, not all charitable requests are what they seem. Emotional appeals may tug at your heart, but the money you give may never reach the people or the programs you think you are supporting. The holiday season, coupled with today’s economic environment, is certain to increase the number of requests for charitable contributions along with the number of fraudulent charitable causes.
Because Oklahomans are some of the most generous givers in the country, we need to be on the look out for questionable solicitations—whether by mail, email, phone or in person. Following are several points to consider before opening your checkbook or your wallet:
- Beware of look alike organizations. Fake charitable causes frequently use names that sound familiar or logos that look familiar and claim to have the same mission as the original group. These deceptive practices are intended to confuse potential donors, encouraging them to support phony causes. As a result, your donation ends up in the requester’s pocket instead of where you intended it to go.
- Beware of fake invoices. Dishonest solicitors realize it is a busy time of year and will attempt to send counterfeit statements or invoices requesting you make good on your promise to contribute. Oftentimes, the envelopes are marked with bright red words such as “urgent” or “immediate”. Be sure to read everything carefully before sending your money.
- Beware of payment requests for unordered merchandise. Charitable organizations often mail out key chains, mailing labels, ink pens and other items, along with a request for financial support. According to law, you are not obligated to pay for those items or to return the merchandise.
- Beware of requests for payment for “free” prizes. “Free” should be free without any strings attached. However, many “free” offers include requests for your checking account number, your credit card number or some other form of payment for shipping and handling, processing or another excuse to access your personal funds.
- Beware of pressure tactics. Unscrupulous organizations frequently use high-pressure tactics to solicit contributions, such as requests for immediate payment, offers to come by your home in person to get the donation, or other requests for immediate action. Most legitimate charitable organizations welcome your contribution at any time during the year because their programs are ongoing.
- Beware of false claims. In an attempt to impress you or appeal to your emotions, fraudulent organizations may make unfounded statements about their work or the benefits of your contributions. Taking the time to carefully read their materials and understand their mission will ensure your money is going where you want it to go.
- Beware of emotional giving. Pictures of starving children and animals make it especially difficult to say no. However, emotional giving often results in overextending your family’s financial resources and may create financial hardships for you personally. All charitable contributions—whether religious, educational or social—should be a planned expense and part of your monthly budget.
Not-for-profit organizations are required to file annual reports with the Internal Revenue Service outlining their activities. Information reported on an organization’s IRS Form 990 is available online or in the organization’s annual report. Additional information may be available from the Better Business Bureau.
If you suspect any questionable activity by a charitable organization, contact your local law enforcement officials. You probably will not get back any money you have contributed, but you may save someone else from being scammed.
Sue Lynn Sasser, PhD, is an associate professor of economics at the University of Central Oklahoma.