There are many organizations that use charitable donations to help people all around the world. On the other hand, there are phony organizations that solicit funds from the public and misuse the funds. For example, crooks are using the Internet to obtain funds for the victims of the Haiti Earthquake. According to a CNN report dated January 13, 2010 by Linda Petty, the FBI warned individuals about a possible Haiti Earthquake scam. When Hurricane Katrina hit New Orleans, there were 4,600 websites seeking funds for the victims. How can you tell if a charity is a fraud?
First, pay close attention to the name of the charity. A fake company will try to use a name that is very similar to a legitimate business. For instance, United Way and United Funds sounds just alike. However, United Funds is a phony organization. If a company, representative does not give you a reference or avoid your questions, this many be a scam.
Next, try to identify the charity. You should be able to find the company’s physical address, location, and a working phone number. If you decide to donate funds to a charity, you should also be able to find out what the company is trying to achieve and how the company is going to spend the money. Avoid doing business with any charity if you cannot get the answers to these questions.
Then, collect information about the charity from reliable sources. Contact the Better Business Bureau Wise Giving Alliance to find out if the charity is listed. The BBB evaluates and grades charitable organizations. You can also find additional information about how to locate fraudulent charities by visiting Scambusters.org and CharityNavigation.org. If you are not able to get information about the charity on one of these websites, it might be a scam. Think twice before you donate the funds. The Federal Trade Commission is also a good resource for helping individuals to spot a charity fraud.
Moreover, do not believe stories from charitable organizations that sound too good to be true. They will tell you what wonderful things they did for children in Africa and Asia. However, they will never tell you how much money they stole from individuals. According to a report by Global Issues writer Anup Shah, dated September 24, 2011 “21,000 children die every day around the world.” This means that 1 kid dies every 4 seconds. A large percentage of the kids die because of charity fraud.
Finally, when you hear or read the high-pressure sales pitch, you should hang-up your phone or move to a reputable website. Try to donate to charities by check so that you can track the funds. Also obtain a receipt from your transaction. Be skeptical of any charity asking for “cash only” because cash is very difficult to track.