In the era of fast information, one-click transactions, and posting everything about our lives on social media, scammers have gotten better at disguising themselves as people you can trust. It has left us in a constant "what's real and what's not" battle. However, there are telltale signs that help us navigate through the sea of uncertainty that is the internet, especially when it comes to philanthropy.
Here are our recommendations on how to avoid charity scams.
Lack of transparency:
Be aware of charities that are not transparent about their finances, mission, impact, programs, or governance structure. Legitimate charities will always share what they're all about, their impact, how are their finances going and who's who on the board of directors and staff. A good place to see charities' finances is GuideStar, an organization dedicated to verifying the legitimacy of charities in the US, or on NEDDIE, an end-to-end social impact platform that connects you with vetted 501c3 charities all over the US.
Does the alleged charity have an unfamiliar website address? Does the website have an odd or misspelled website address (URL)? This might be the case of a phishing site trying to impersonate a legitimate one. Another telltale sign is an excessive number of pop-up ads. Unless the website's pop-up ad is about a current fundraiser or a call to action to donate to the organization, it is probably a scam. Make sure that your connection is always secured. Look for the "https" at the beginning of the website address (URL) and a padlock icon in the address bar to make sure is secure.
Suspicious social media accounts: Social media accounts have been the latest trend in scammers takeover. You've been following a charity and suddenly their name changed to something different and they're asking you to join their bitcoin journey? The account was hacked. Profiles with unusual or misspelled names may be fake accounts attempting to impersonate a legitimate charity. A charity promoting anything other than their mission, promising profits, and telling you to follow other external accounts, are social media accounts that were probably hacked. Another way of seeing the legitimacy of a social media account- check when the account was opened and how far they've been posting. If a charity is telling you that they've been in business for 10 years but their social media account is a few months old, beware. No tax-exempt status: Legitimate charities should be registered with the relevant government agency. In the US all legitimate charities must have a 501c3 tax-exempt status. You can always ask the charity to show their documentation or you can head over to GuideStar or NEDDIE and verify if the charity is listed.
Unsolicited requests for personal information: Avoid providing personal information, such as Social Security numbers or credit card information, to charities you do not know or trust. Charities will not need information such as your social security, birth date, or private information. For donations, only credit card or check information, name, and address, and email will suffice. We recommend making donations through trusted websites that are known to handle donations and provide complete security around your information.
High overhead costs:
Avoid charities that spend a large portion of their budget on administrative and fundraising expenses, as opposed to direct services. Verify charities' finances and see how much they spend in overhead costs in a year versus what they spend on the services they offer to carry on their mission.
By avoiding these red flags and being an informed donor, you can help ensure that your donation has the greatest impact and supports an effective charity. At NEDDIE we provide donors a peace of mind because their information is secure, the charities on the platform are vetted and we ensure their donation will make the most impact.