Beware fake charities
Think you'd never donate to a fake charity? We set up shop in front of Kmart and prove that people often don't pay attention.
This post comes from Brandon Ballenger at partner site Money Talks News.
Last year, people donated more than $211 billion to charity.
That Giving USA Foundation estimate leaves no doubt Americans are generous. What's less clear is how careful we are about giving.
In the video below, Stacy Johnson explains the genuine risk of donating to a fake charity, then provides a demonstration. See if anybody notices, and then read on for more about protecting yourself.
As Stacy admitted, changing "Salvation Army" to "Sal's Vacation Army" is pretty silly. But the point is that in more than an hour on a busy sidewalk, not a single person noticed. And many fake charities are even less obvious. They might have a name that sounds similar to a real charity, or outright steal a familiar name they don't represent.
In some ways worse, real charities that have gained our trust don't always spend our donations in ways we'd like. Some nonprofits pay their CEOs more than $1 million (.pdf file) a year. Others put family members in executive positions, or spend a large percentage of donations on raising even more with telemarketing and mailing campaigns.
Here's how you can make sure your money goes to a good place:
If you have any doubts, a few questions might also help. If you've never heard of an organization, ask about the history or give them a call. Organizations that pop up overnight -- after a natural disaster, for instance -- can disappear as quickly. Even if they're legit, they may not have the infrastructure to do as much good as established charities. Another good question: "What's it for?" The solicitor should be able to explain how the donation will be used, as the Salvation Army spokeswoman in the video above does.
If you can't find a mission statement, you should wonder how organized the group is, and how they make spending decisions.
The Federal Trade Commission has more guidance, including a website with resources for checking out charity fraud.
More on Money Talks News and MSN Money:
Thanks for sharing the information. We should be careful while donating. You have mentioned very good points to check whether it is a fake one or real one. I do agree with you before donating money we should check spending of charity. I donate money to http://www.jasonhalek.org/content/jason-halek-%C7%80-christmas-donations-children. I deeply researched them & found they are good & use money for children’s welfare.
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