Monday, June 3, 2013

Be Aware! Some Tips vs. Natural Disaster Charity Fraud

by Gary Snyder

With the sudden and vivid destruction caused by tornadoes, tsunamis, man-made catastrophes, fraudsters are swarming to take advantage of these highly publicized emergencies and are pocketing donations with many bogus charities that pop up under the guise of helping victims. 

Performing due diligence checks by doing minimal research is imperative. Jacob Parks in Fraud Magazine suggests the following: 

  • Search a charity evaluation site for the organization, such as Charity Navigator or GiveWell. These sites use several factors, such as transparency and how funds are used, to rate charities. Additionally, you can find the charity’s authorized contact information to compare to what solicitors have sent you.
  • Check to see if the organization is tax exempt or has had its exempt status revoked using this IRS site (or check with the applicable tax authority).
  • Simply running an online search for “scam” and the name of the charity might bring up revealing results. Charity scams typically involve mass solicitations, and whistleblowers often identify potential scams online. 
  • If responding to a solicitation, call the charity using its official contact information to ensure that it is the true solicitor.
  • Check to see if the charity is registered with a state government agency (most states require registration with the State Attorney General’s office or similar agency).
Many charity scams send out mass emails, social media posts, letters and phone calls to attract donors shortly after a disaster occurs. It is suspicious for a charity to:
  • Request donations in the form of a wire transfer or cash.
  • Convey incorrect details in the solicitation, such as thanking the recipient for a donation that he never made.
  • Use high-pressure tactics, such as pressing for immediate donations over the phone or requesting an overnight delivery service for payment.
  • Have a name that closely resembles a recognized charity.
  • Fail or hesitate to provide information about organizational leadership, contact information or other identification.
  • Operate a social media account (e.g., Twitter) with little or no activity prior to a disaster.
  • Operate a social media account with multiple handles on the same site.
  • Fail to provide receipts for tax-deduction purposes.
  • Request payments to the solicitor as opposed to the beneficiary.

Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however. Cites in various media: Featured in print, broadcast, and online media outlets, including: Vermont Public Radio, Miami Herald, National Public Radio, Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), FOX2, ABC Spotlight on the News, WWJ Radio, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, B, USA Today Topics,, Responsive Philanthropy Magazine, New York Times...and many more Nonprofits: On the Brink (2006) Silence: The Impending Threat to the Charitable Sector (2011)
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