While many people see the winter holiday season as the primary time for giving, spring is also a time when many Americans open up their wallets and prepare to make a difference in the world.
For many, the Easter and Passover holidays spark a strong desire for giving. In other cases, many people see their tax refund as a great resource for giving back. This year, many people were affected by the loss of the Notre Dame cathedral in France in early April, and tried to make an impact there, as well.
Of course, for everyone who’s trying to use their resources to do good, there are also bad actors and scammers, looking to make a quick buck on the back of unsuspecting good samaritans.
Case in point? As people looked around and tried to give money after the Notre Dame fire, fake charitable organizations sprang up – so many, in fact, that news organizations and groups like the Federal Trade Commission (FTC) and Better Business Bureau (BBB) had to offer warnings to consumers to protect their hard-earned money.
Similarly, according to Business Insider, the IRS reports “fake charities” as one of its “Dirty Dozen” – the twelve most common scams that spring up during and immediately after tax season.
As someone looking to do good in the world, it’s important to keep in mind that meaningful philanthropy takes serious preparation and planning – including taking steps to actively safeguard your giving from scams and fraud.
Here are a few practical tips for safer spring giving, courtesy of the FTC, Charity Navigator, and the BBB:
Research Before You Give
Before donating money to an organization sight-unseen, consumer protection experts advise taking some time to vet and research any potential charity. The FTC encourages consumers to leverage the internet, searching for the name of the charity “plus ‘complaint,’ ‘review,’ ‘rating,’ or ‘scam.’” This could be a good launching point for learning more about a prospective organization or group.
Similarly, you can research charitable organizations using resources like Charity Navigator, the BBB, CharityWatch, and GuideStar. Another go-to resource may well be the consumer protection agencies for your state. As the BBB notes, “in many states, charities are required to register, usually with the office of the attorney general, before soliciting.”
What’s more, be sure to research different aspects of the charity or organization you want to support. For instance, how much of each donation actually goes towards causes that matter to you?
As Charity Navigator’s guidelines put it:
“Organizations should take the time to answer your questions — your donation should be valuable to them, just like the time they’re spending building a relationship with you. If the fundraiser who contacts you refuses to answer these questions, leads you around in a circle, or tries to pass off these questions as not important, your donation will be better served elsewhere.”
In other circumstances, as the FTC points out, if you’re giving to a “crowdfunding” platform, look into information like “who gets your donation and how your money gets to the charity.” As the FTC notes, for legitimate causes and organizations, “these details should be clear and easy to find without hunting through fine print.”
Watch Out for Suspicious Tactics
As the BBB explains, less-than-reputable organizations and scammers may use a variety of common tactics, including using “heart-wrenching appeals” and exerting “pressure to give on the spot.” The FTC and NBC News detail a few more common tactics and “red flags” that could suggest a scam, including:
- Feeling like you’re being rushed into a decision
- Getting unsolicited calls or emails out of the blue
- Offering gifts in exchange for donations
- Using a name that is a “lookalike” to a real charity’s
- Avoiding specifics or refusing to provide requested information
Bottom line? Consumer advocates note that if you don’t feel comfortable giving to an organization, then it’s usually right to trust your instincts and walk away.
Be Cautious With How You Pay
Another warning sign that a particular so-called charitable organization might not be up to par? Watch out for how the charity requests that you make your payments. As writer Herb Weisbaum notes for NBC News:
“Avoid any solicitation that asks you to wire money or offers to send a courier or overnight delivery service to collect your donation immediately, guarantees you’ll win a sweepstakes in exchange for a contribution or asks you to honor a pledge you don’t remember making.”
As many consumer protection experts have noted, there are several methods that scammers often use to get consumers to pay up, including wire transfers, purchasing gift cards, or sending cash. The FTC is firm, writing: “Did someone say you can only pay by wiring money, putting money on a gift card, or loading money on a cash reload card? If they did, then yes: that is a scam.
The FTC also encourages consumers to “keep a record of all donations. And review your statements closely to make sure you’re only charged the amount you agreed to donate – and that you’re not signed up to make a recurring donation.”
About FourStar Wealth Advisors
Here at FourStar Wealth Advisors, we believe in arming investors with the knowledge that it takes to always make the best possible financial decisions, at every stage of life’s journey. That includes taking steps to protect your philanthropic efforts, during the spring season, the holiday season, in retirement, and beyond.
Whether you are accumulating wealth or investing for income, solidifying your retirement plan, or devising a distribution approach that meets your lifestyle and legacy goals, FourStar Wealth Advisors can help you define what is most important to you and then formulate the strategies that are best suited for your needs. As you look ahead to what the rest of the year has in store, don’t hesitate to get in touch with us to discuss the state of the market, or to examine the financial strategies that will empower you and yours to live a more full and complete life.
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