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Before You Give: Charity Scams - By Kyla Hunt

Good-hearted people across the country give their money and time every year to charitable causes. This willingness to help is admirable; however, if these good citizens are
not careful, their urge to give can end with money going to decidedly
uncharitable scams.


Often these charity scams come in one of two packages:

  1. A charity scam that uses the name and reputation of a well-known, existing charitable organization, or

  2. A charity scam that uses a well-known tactic or organizational structure.


Over the past week, two charity scams have been in the press that readers should be aware of. Each one is a perfect example of one of these two types of charity scams.


The first is a scam that has been using the name and reputation of the Make-A-Wish Foundation (http://www.wish.org/),
a well known charitable organization that tries to fulfill the dreams
of children with life-threatening illnesses. According to the
Make-A-Wish Foundation website, “A number of individuals have
reported to us that they, or a family member or a friend, have
received a phone call informing them they have allegedly won hundreds
of thousands of dollars (e.g., $350,000) in a sweepstakes or
lottery associated with the Make-A-Wish Foundation. These individuals
have been told that, in order to claim their “prize,” they must
first wire money to cover taxes, insurance and courier services on
the supposed winnings” (http://www.wish.org/about/fraud_alerts).


The Make-A-Wish Foundation urges you to remember that they are not involved in a sweepstakes or lottery of any kind, and that they do have very strict policies
regarding the solicitation of funds. If you are contacted by someone
claiming to be a Make-A-Wish Foundation representative, keep these
warnings in mind, and always verify with the Make-A-Wish Foundation.
You can find their contact information here:
http://www.wish.org/about/contact.


Tip: It is important to note that those involved in this scam may alternately claim to be representatives from the Federal Trade Commission or Lloyd’s of
London. You can view the Consumer Alert issued by the Federal Trade
Commission here:
http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt099.shtm.
Remember, scammers are highly adaptable creatures – if people
start being too aware of a scam affiliation with one name, they will
start using another. Before giving out money, always do
research on the organization to which you are giving money.


The second charity scam in the news last week involved a fraudulent car donation operation, a well-known charitable donation tactic. New York State Attorney General Andrew
M. Cuomo filed a complaint against an organization called Feed the
Hungry
, a group that had been urging people to donate their cars
for charity. The complaint is also directed against Feed the
Hungry’s director, Nicholas J. Cascone, Jr. You can view the
verified complaint online here:
http://www.ag.ny.gov/media_center/2010/june/FTH_Complaint.pdf


Car donation programs are fairly common, and many of these are legitimate. It works like this: you donate your car, in return getting a tax deduction. The organization
then sells your car, usually at auction, and the profits are supposed
to go to a charitable or non-profit organization or cause.


In the case of Feed the Hungry, however, it appears that only 1.8 % of the profits were going to charity
(http://www.ag.ny.gov/media_center/2010/june/FTH_Complaint.pdf).
Also according to the complaint, Feed the Hungry sought further
donations by falsely claiming to have funded thousands of charitable
meals.


Looking at this scam, remember that no matter if the schema or methods of a specific charity or nonprofit seem legitimate and common, always do your research into the
organization. You can do so by visiting the Federal Trade Commission
(www.ftc.gov)
or the Better Business Bureau (http://www.bbb.org/).
Another great resource is The Charity Navigator, a site that provides
evaluations of charitable organizations (you can find them here:
http://www.charitynavigator.org/).

To summarize, regardless of the type of charity scam you may come up against, keep these tips in mind when considering whether to give:


  • Always contact the parent organization to verify if a representative of a charitable organization is indeed an affiliated and legitimate representative
    of the said organization.

  • If you can find no information on the charitable organization’s existence, stay away.

  • If the charitable organization is not well-known, make sure you can find information about the organization somewhere other from their representatives. A great
    place to start is www.charitynavigator.org.


Remember, giving to others is commendable. Make sure the money or time you give gets to those who need it.

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