3 Dangers of Giving Online

Be Careful Who You Give To…

The holiday season is often referred to as the most wonderful time of year.

It’s also the most generous. Charities receive almost half of all their annual donations during the month of December alone.

During the Christmas season, you’re more likely to open your wallet to extend a little help to those less fortunate. And you should be commended for doing so. But I also want to offer a word of caution.

The Internet has made it easier than ever to donate to your favorite charities. Unfortunately, it’s also made it easier for unscrupulous individuals to take you for a ride, stealing the money you meant to give to a good cause… and worse.

5 Ways to Protect Yourself From Charity Scams

The average American household donates $2000 per year to charities. In some cases, that money goes to a good cause. In other cases, only a tiny portion makes it to the cause in question while administrative fees eat up the rest. In the worst cases, the money isn’t used for charity at all – instead dishonest scammers pocket your money for themselves.

To make sure that doesn’t happen with your money, use these five strategies…

Be wary of crowdfunding. Crowdfunding has made it possible for small nonprofits to reach out and receive help through the Internet. Unfortunately, scam artists will happily set up a non-profit and then accept your donation with no intention of putting it toward their “good” cause.

Type your URLs carefully. One trick that scam artists use is to set up domain names that are similar to real charities. If you mistype the web address, you may never realize your donation went to someone other than the organization you intended.

Clicking a link that you received in your email or through Facebook is also a bad idea. It may take you to a site that looks legitimate, but is really just a scam. Your donation may line the pockets of thieves and you may unknowingly download malware to your computer. Always go directly to the site or the organization you wish to donate to, and take extra care when typing the online address.

Do your research. Even legitimate charities may not be using as much of your money toward their cause as you think. Some organizations put only 5 percent toward the cause they claim to support, keeping the rest for “administrative” purposes. These are probably not the types of outfits you want to be donating to.

Use a charity monitor like Charity Watch or Charity Navigator to help you decide which charities meet your own financial standards. These sites will help you find charities for causes close to your heart and will also give you a breakdown of how those organizations spend the donations they receive. You’ll be able to learn how much goes to executive pay versus how much reaches people in need.

Keep the need to research in mind when receiving phone calls asking for donations. Legitimate organizations will accept your donation when you’re ready to give it. Don’t hesitate to say that you’re going to look into the charity further and you’ll call back. If they keep pressuring you, hang up, and look elsewhere to make donations.

Give close to home. Some of the best charities to donate to are the ones that you can see working. When you give to a charity whose work you’ve witnessed in your own community, you’ll have a lot more confidence that your dollars are ending up where you want them.

Careful with your information: When you’re making a charitable donation, you may not be as careful with your personal information as when you’re making a purchase. That’s a mistake. Fake charities can work as a front for identity thieves. Such thieves will make a strong argument for why they need your personal information. If a charity asks for your birth date to send you a card, politely decline or give them a fake date. If you ever encounter a charity that asks for your social security number, walk away.

Also make sure the charity is using a secure system to receive your online donation. The page should start with “https.” And it’s a good idea to look for secure certifications before offering up your credit card information.

One final note. Keep good records of your charitable donations. I know you don’t necessarily make donations for the purpose of getting a tax write off. But you should be taking advantage of every tax break Uncle Sam offers… goodness knows the government takes enough of your money as it is!

With just a little precaution, you can be as generous as you like during the holidays. And you can do it with the peace of mind that your money is actually reaching people in need.