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

by TheWritingCowboy

The Ice Bucket Challenge is raising lots of money for ALS, but how do you know whether a charity is legitimate or not? This article offers you tips and 'how to's."

Have you taken the ‘ice bucket challenge?” That’s the charitable activity that has taken the world by storm. Initiated by supporters of the ALS (“Lou Gehrig’s Disease”) Association, it entails people having buckets of ice water tossed on their heads. It’s a means of getting attention for ALS research and services, with the option of donating instead of being drenched (some people have opted to do both).
So far the ice bucket challenge has garnered tons of publicity and a phenomenal amount of money (as of this writing in 2014 almost $80 million this year, far more than the association typically raises). Celebrities like Oprah Winfrey and Steven Spielberg have done it, athletes like basketball star LeBron James have done it, and even former U.S. President George W. Bush has done it.

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.

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Tips For Testing Donation Requests

Before donating to a charity you should be aware of certain clues that suggest a request for a donation is not legitimate. For example the requestor won’t provide detailed information on how the donation will be used, won’t provide proof that the contribution is tax deductible (in the U.S.), uses a name that closely resembles another better-known and reputable charity (Charity Navigator has revealed this problem with scammers suggesting they are Disabled American Veterans by using a similar name), asks for cash donations, and more. A favorite ploy is to thank you for a donation you don’t remember making and asking for more money (designed to make you feel that you already have a connection to the false charity). Other tip-offs to scammers is their offering to send a courier to pick up your monetary donation or asking you to wire money to them and using high-pressure tactics to pester you into making a donation.

So, what should you do? You don’t want to not give to charitable causes, but you don’t want to be taken advantage of either. Here are some tips:

1. Ask for detailed information about the charity, including name, address and phone number. If they are not willing to provide the information, just say ‘no thanks.’

2. Call the charity (look up the number yourself, don’t rely on a number the caller might give you) and ask them if they know of the person who called you.

3. Many states in the U.S. require that a charity is registered. Check the charity out with the appropriate state agency.

4. Contact one or more of the charity watch groups mentioned above. They all have online services that allow you to check out the charity of your choice.

5. Ask the caller the following: Are they a paid fundraiser (this might suggest a charity, even though legit, is spending more on fundraising than on its services); how much money the fundraiser gets and how much goes to the charity, etc.

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.

Updated: 08/25/2014, TheWritingCowboy
 
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Telesto on 08/27/2014

I agree, very good advice. I don't take kindly to "cold calls" on my home 'phone as it's XD, so no matter who calls me, I always tell them I will call back. I flatly refuse to give out any personal info to someone I don't know. If they don't like it, tough. In England and Wales, most legit charities (except those that are very small) must be registered and they should be able to give you a number, which can be checked through the charities commission.

AngelaJohnson on 08/26/2014

Good advice. None of us want to donate money and then find out it was a scam.

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