The ‘Ice Bucket Challenge” – How Do You Know A Charity Is Legitimate?

While the challenge is a great idea and is having great results – although there are a few grumbles out there from people who believe the stunt is unseemly or believe that there are other organizations that need money and support as well – it brings to mind how the average person knows if a charity is legitimate or not.

Scams Aplenty

Certainly there is no shortage of fund raising scams out there. For example, phony lottery scams and scams by people who claim they are ill and need help who are actually quite healthy and abscond with the contributions they receive. Even the ice bucket challenge has produced Internet scammers who are sending e-mails with titles that promise amazing videos of the Ice Bucket Challenge, but they're actually attempts to embed spyware and other data-stealing programs in your computer.

The U.S. Federal Trade Commission (FTC) maintains a website that offers tips about giving to a charity and how to do your research to avoid fraudsters who try to take advantage of your generosity. Of course many cyber-crooks operate from overseas locations making it more difficult to discover them and/or to get justice should you be a victim of a charity scam.

There are a number of organizations that can help you determine if a charity is legitimate or not. Moreover, several of these organizations provide information on how well charities do in terms of using your donations, whether the organization is legitimate or not. Organizations such as the Better Business Bureau’s Wise Giving Alliance, Charity Watch, GuideStar, the National Association of State Charity Officials, and Charity Navigator are some of the better-known charity watchdogs. Links to all are available at the FTC website.

In addition to scams involving the Ice Bucket Challenge, the FTC is warning about scams involving phony debt relief programs and services (a long-running problem), scammers taking advantage of families of migrant children, phony tax relief services, and many more.

6. In the U.S. you can visit the Internal Revenue Services’ website to find out which charities are eligible to receive tax-deductible donations (not that you are necessarily looking to donate for the deduction, but it does offer an idea as to the status of a charity).

7. Never send cash and when you pay by check or credit card never provide your credit or debit card number, bank account number or any personal information until you’ve checked out the charity and are satisfied with what you found.

Legit Charities Need Checking Too

However, even legitimate and well-known charities should require your close attention. While they may in fact be serving a cause or providing a service you believe in and may have been around for a long time, not all charities are managed well. That’s where organizations such as Charity Navigator come into play. The non-profit organization  is an unbiased source of information for making “intelligent” charitable donations. Going well beyond the legitimacy of a charity, Navigator delves deep into a charity or fundraising program to determine its financial health, how it reports its results and its degree of accountability and transparency. For example, in the area of financial health Navigator examines issues such as a program’s expenses, its administrative costs, how much it spends for fundraising, and how efficient its fundraising efforts are. Unless you are very familiar with a charity looking through Navigator’s information could be well worth you time and money.

Interestingly, scammers are so ever-present and brazen even Charity Navigator has been the subject of scams that suggest the scammer works for the organization and seeks donations on its behalf.

As the saying goes, buyer beware, and it’s as true today as ever. Don’t let your well meaning efforts be way laid by some crooks trying to separate you from your money and make your sincere efforts worthless. Spend some time following these tips and checking out the charity you are interested in. It’s one of the best investments you’ll ever make.