The Smarter Giving Guy » scams

Tips for your year-end giving

SG Guy — Sun, 13 Nov 2011 19:25:17 +0000

Giving to fewer charities can result in more of your money going to programs you care about. Read more about this, tax-free IRA donations, avoiding scams and other year-end giving tips.

SGO calls for charities to show their EINs

SG Guy — Sun, 11 Sep 2011 16:29:17 +0000

Charity identities matter. Among other things, scam “charities” adopt names confusingly similar to legitimate groups — and siphon off dollars needed for good works.
Using an EIN is the quickest path to successful charity research. While charity names can be similar, no two charities have the same EIN.
Read the SGO call for charities to show their EINs. SGO helps charity donors boost their impact.

Go slow on Japan disaster donations

SG Guy — Wed, 16 Mar 2011 19:59:34 +0000

Today’s New York Times reports that the Japanese Red Cross says it doesn’t need donations, few charities actually work in Japan, and that U.S. organizations that are receiving donations in response to the Japan earthquake/tsunami disaster don’t have a plan for what they’ll do with the money. Let’s go slow on this.

Read The New York Times article.

Read our post on avoiding disaster-related “charity” scams.

Tips for avoiding disaster charity scams

SG Guy — Sat, 12 Mar 2011 20:02:46 +0000

This week’s earthquake/disaster in Japan will bring out the scammers. They will view the disaster as an opportunity to make some easy money. Disguising themselves as a charity is a common scammer strategy.

You can avoid the scammers with some easy checking. The following suggestions are taken from the SeriousGivers Top Tips for Avoiding “Charity” Scammers:

Identify the organization. Scammers set up bogus charities, and use names similar to known, legitimate charities. The the federal employer identification number (EIN) for the organization. While charity names may be similar, no two charities have the same EIN.
Confirm it is a charity. Check the SGO database of charities. If the organization is there, you know it has passed the tests to be treated as a charity. The easiest way is to go to seriousgivers.org/find-a-charity/ and enter the organization’s EIN. If the organization isn’t in the SGO database, check IRS Publication 78 (online). For best results with Publication 78, enter the organization’s name and its main location.
Check its operations and reputation. Armed with the organization’s EIN, you can run a Google search, check its Report at SeriousGivers, and see if it is covered by CharityNavigator or CharityWatch. You can find and review its IRS Form 990 or 990-EZ information return, by using the seriousgivers.org/find-charity-990/ page.

Remember: Every dollar scam “charities” take in is a dollar that could instead have gone to a strong charity doing valuable work with the funds entrusted to it.

Read or printout Top Tips for Avoiding “Charity” Scammers

Tips for year-end giving — 2010 edition

SG Guy — Wed, 15 Dec 2010 16:16:04 +0000

It’s a terrific time to be generous. With demand for charity services up, and donations to charity down, charities need our support now.
Stick with your budget. Philanthropy is wonderful, but first make sure to take care of yourself and those who depend on you.
Focus your giving on causes you care about. Don’t give to everyone.
Research before you give. Many charities do strong work with the moneys entrusted to them. Others, unfortunately, do not. Spend no less than 30 minutes screening a charity before you give. Look at the percentage of spending that goes to programs, review their cash reserves, check their spending on staffing, see how much they spend to raise a dollar. For more tips.
Select fewer charities. Not only does this help you stick with your giving focus, it means you can make better use of your research time. Let’s say you’d spend at least 30 minutes screening a charity. Give to eight, and you’ll spend four hours. Focus on two or three, and you can research more deeply, get to know each of them better, and still save time.
Selecting fewer charities can also mean more of your dollars go to charity programs. Let’s say you’d give $25 to each of eight charities. If the average charity spends $10 to process a gift it receives, $80 (or 40%) of the $200 you’d give goes to processing costs. If you instead give $100 to each of two charities, only $20 (or 10%) goes to processing costs. That means $60 (30%) more available for programs.
Scammers increase their efforts when they see people are feeling generous. The holiday season is one of those times. Every dollar scam “charities” take in is a dollar that could instead have gone to a strong charity.

Many people do much of their charitable giving at year-end. All of the above tips are also good advice year-round. Happy giving!

Real police charity, bogus solicitor, don’t give cash

SG Guy — Sun, 01 Aug 2010 21:26:22 +0000

Tampa Bay police apprehended two bogus solicitors using the name of a recognized police charity. The couple had also been active in Orlando, and when apprehended were headed to Louisiana.

While the report doesn’t mention it, I’m guessing they looked for cash donations. If a donor wrote a check to the police charity, the scammers would have to alter the check to get anything for their efforts. If they did that, the donor likely would get their money back from the bank (for honoring a false instrument). But, if a donor gave cash — it’s gone. A good reminder about the perils of donating cash.

Read the Tampa Bay Online story.

Charity abuse makes IRS top-5 scams list

SG Guy — Mon, 26 Jul 2010 14:37:49 +0000

The IRS has released a summertime warning on top tax-related scams. Abuse of charitable organizations and deductions grabbed 4th place, in the company of phishing, return preparer fraud, hiding income offshore and frivolous arguments.

Elaborating on charity abuse, the IRS reported

The IRS continues to observe the misuse of tax-exempt organizations. This includes arrangements to improperly shield income or assets from taxation and attempts by donors to maintain control over donated assets. The IRS also continues to investigate various schemes where donations are highly overvalued or the organization receiving the donation promises that the donor can purchase the items back at a later date at a price the donor sets.

Read the IRS release.

Car donation charity a clunker, charges Cuomo

SG Guy — Thu, 17 Jun 2010 02:26:21 +0000

The New York Daily News reports that Andrew Cuomo, NY’s attorney general, has sued a local “charity” called Feed the Hungry over the handling of its car donation program. The suit alleges that less than 2% of the proceeds of the donation program went to helping the homeless. The suit is part of a wider probe of vehicle-donation charities.

While there are undoubtedly charities that operate reputable vehicle-donation programs as part of their fundraising work – in our view vehicle-donation programs in general are suspect. Cuomo’s message: “be cautious and do some research.” We agree.

Read the NY Daily News story.

NY’s Cuomo sues to shut down “charity” telemarketers

SG Guy — Thu, 21 Jan 2010 20:48:32 +0000

Based on an investigation that included use of undercover investigators who went to work for the telemarketing companies, NY attorney general Andrew Cuomo’s complaints allege the telemarketers

used aliases and failed to disclose that they were paid fundraisers, to make it seem like the donor was giving directly to the charity,
change the names of charities so they sounded like well-known charities or causes,
lied about the programs the charities provided, and
created the false impression they law enforcement officials.

Having reported raising $16 million in the last three years, on average the fundraisers kept 76% of the money raised, Cuomo further reported.

This news isn’t new. Read my posting about choosing to avoid charities that use paid telemarketers.

Read AG Cuomo’s news release and the related complaints.

CA Attorney General warns about “charity” telemarketers

SG Guy — Wed, 30 Dec 2009 19:54:51 +0000

The Orange County Register published a terrific reminder about the dangers of “charities” seeking donations through paid telemarketers. Charity scams and telemarketing frequently go hand-in-hand. I don’t give to “charity” telemarketing appeals by paid marketing groups — and encourage you to follow my lead.

Read the story.

Read our Red Light warning on charity telemarketers.