If you're like most people, you enjoy doing a little good every now and then. Making the world a better place, and giving a little bit of cash to a worthy cause. You're just the kind of person this world needs… you're also the kind of person that charity scams absolutely love.
Charity scams are big business. Although exact figures are difficult to pin down (for obvious reasons), scams raise hundreds of millions of dollars every year.
How do they get you? Often, it will go something like this:
You'll be at home, about to sit down to dinner with your family. Your phone will ring. When you answer, you recognize the familiar opening script. “Hi there, how are you doing this evening…”
But unlike most telemarketers who want to sell you a product, or pollsters who want to grill you about every minute detail of your political preferences, this person calling you tonight is calling about a charity. Aha, you say. We'll give this person the benefit of the doubt.
The charity the telemarketer represents is one you're pretty sure you've heard of before. In fact, they remind you that you donated to them once, but it's been a few years. That seems likely, you think.
After refreshing you a bit about what the charity does, the telemarketer drops the bombshell: a recent natural disaster has wiped out half their operation. They are calling everyone, everyone who has ever donated in the past, and is there any way you can send a little donation to help during this crisis?
At this point, the family is about ready to start dinner without you. Satisfied that the person is who they claim, you make a quick one-time donation. The charity representative thanks you, and hangs up.
A few days later, something doesn't sit right. You start to research this natural disaster and find nothing.
You look through your statements to see when you donated the first time. Also nada.
Eventually you remember the charity's name, and run a Google search to see what you can learn.
And what comes up on your search?
“Do not donate!!!!!”
“FAKE CHARITY”
“Scammed me out of hundreds of $'s… block this number!”
And you're forced to realize what your gut was telling you a long time ago… you've been scammed.
What Sort of Racket is This, Anyway?
First, the good news: the vast majority of charities are completely legitimate. They raise funds honestly. They put their hearts into their work. They're run and operated by people who believe in the organization's mission, and they do their best to put donor funds to the best possible use.
So don't lose your faith in humanity! Charity scams are the exception, not the rule.
That being said, it's tough to know what's real sometimes, because there are multiple ways that scammers can exploit good-hearted folks who just want to help out. And because there's no one single way that charity scams work, it helps to know a bit about what they might be after.
They're Looking for a Quick Buck
One of the most basic types of charity scams is the most basic. You meet someone who tells you they're fundraising for a well-known charity, something like Goodwill or The Salvation Army or The Boys and Girls Club. They might even have a badge or vest or something that looks semi-official.
Of course, they're not involved with the organization at all. They're totally on their own, and the “fundraising” they're doing is for their own wallets.
Because you know the charity they're claiming to work with, you don't have to ask yourself if they're making it up. But that's the heart of the scam right there - they're using your trust in the organization in order to use it for themselves.
Typically, these folks will try to get you to pay in cash. They're not after your credit number, because they know a charge is traceable and could be reversed. They want to get what money they can now. They'll work one neighborhood or street corner for a bit, and then disappear.
They're After Your Personal Information
Image: by Free-Photos, via Pixabay
This is usually someone on the phone who is trying to get you to give up a credit card number, bank account information, or anything they can use in an identity theft.
They might try to contact you online, or send an email with a link embedded in it.
When you click on the link, it will take you to a charity website that looks like another real charity, but it's actually a little bit different.
They're hoping you'll pay online without noticing the difference between the two.
They Use Your Emotions Against You
Hurricanes in Texas or Florida. Wildfires in California. Tornadoes in the Midwest.
Natural disasters have a way of bringing out the best in some people, and the worst in others. Whenever some sort of disaster hits a region, real charities respond with increased fundraising efforts and support. But scammers will be on the prowl, too.
The media loves to cover fires and floods and storms. Disasters quickly are pushed to the forefront our collective consciousness. Scammers know this, which is why they flock to the most vulnerable regions of the country, ready to pounce on people's desire to help out.
Scammers will usually call you in this case. Typically they will also have a charity name that sounds like a well-known one, but is just a little different. Sometimes they'll even set up their phone number so it looks official on your caller ID.
They might be after your account number or they might want a wire transfer, but again the game here is to create something that looks like another charity, and get people to fall for it.
This method is not just used in times of disaster. It's popular around the holidays, too. People are feeling generous between Thanksgiving and New Year, and are more likely to give without questioning too closely.
The Organization Only Exists to Fund Raise for Itself
Of all the charity scams out there, this is one of the most devious. And one of the most lucrative (for the scammer anyway).
The way this scam works is that you have a charity that does exist. You also have them do a little bit of good, so that it establishes a track record and people trust it.
But the trick here is that while the organization is not a complete fake, the purpose is to drive fundraising. These charities might put 80% of their total expenses into telemarketing companies. If you donate $50, only $10 actually goes to helping people.
The rest? That goes into the pocket of whoever has been hired to raise the money (who is often conveniently a friend or relation of the person running the charity! Hmmm…)
So while this not technically an “invented” charity, it is absolutely a scam.
“Feel-Good” Stories: Kickstarters & GoFundMe
Image: by mohamed_hassan, via Pixabay
Crowdfunding sites are another way scammers can prey on people's emotions. While Kickstarter, Go Fund Me, and other similar websites have done a lot of good, there are also ways in which specific people can abuse them for nefarious purposes.
The idea here is simple. Create a heart-tugging story that brings people to tears. Or moves them to outrage. Get them feeling upset, or get them feeling good, and then sit back as hundreds of people impulsively chip in $10 or $20.
If your story goes viral, you can make a lot of money with this seemingly “small” operation.
Fortunately, the website operators are extremely pro-active in seeking out fraud, and in many cases have refunded people who have been duped. But that only works if the fraud is discovered, and sometimes people do get away with it.
These people have been at it for years, and some of the stories of past scams are truly mind-boggling…
Charity Scams Through the Years
Charity scams have been around since ancient times. Conmen and street hustlers discovered they could get more money out of people if they pretended like they were sick, or had a (non-existent) child to take care of.
Nowadays, many of these operate on the internet as a way of maximizing the number of people who might fall for the scam. Some of these are cons, some are “bad charities” and it can be very big business indeed.
Here are some of the more famous attempts at using people's altruism against them.
The Nigerian Prince
One of the best-known schemes in the book (or on your computer). A Nigerian prince emails you and claims that he has a great deal of money, but he needs to send it to a third party (you). If you reply with your bank info, he will give you a share of the funds once he is able to move it properly.
Sometimes this scam shows up as a fake charity that help Nigerian children. It's a variant of a tried and true method, one that keeps coming back. No matter how many people see right through it, there will always be that one person who doesn't.
Long story short, don't send money to strangers via email.
The 9/11 Charity Scams
There are few events in American history that carry the emotional weight of the ones that took place on the morning of September 11, 2001. The horrific attacks on the World Trade Center, Pentagon, and in Pennsylvania shocked the nation and changed the social and political landscape.
But that didn't stop scammers from coming out of the woodwork in order to take advantage of a stunned populace. Given that this was back in 2001, many average people had still not gotten used to the idea of cyber-fraud as a part of everyday life.
Emails, websites, and fake fundraisers started appearing right away in order to take advantage of people's good intentions.
Virginia Tech: 25 Different Charity Scams
In 2007, one of the worst mass shootings in U.S. history took place n the campus at Virginia Tech University. Only a day later, multiple charity sites appeared, each offering to collect and donate funds to those who were affected.
Of course, only one of these was the real one. Others may have been in earnest, but many of these were definitely created with the sole purpose of identity theft or robbery. Authorities moved quickly to shut down the sites, but this is exactly the sort of thing to watch out for.
This is a trick that has been repeated whenever there is a major crisis. Hurricane Katrina in 2005, the Haiti Earthquake in 2010, and the 2011 Tsunami in Japan all saw a surge of fraudulent “charity website” activity in the wake of the disasters.
The lesson is clear: if there's been a recent disaster or tragedy, be extra careful with doing your homework before donating.
The HonorBound Foundation
This organization claims to be about helping our nation's veterans. In reality, it spends the vast majority (over 80%) on fundraising and administration.
The Better Business Bureau has leveled charges against it, and it has responded only by changing its name multiple times (it has also gone by “Vietnam Veterans Agent Orange Victims” and “National Veterans Services Fund”).
One of the most common practices is for an organization to misrepresent how much of its resources goes directly to those in need.
If you want to know that a charity is doing the work it claims to be, check out the website Charity Navigator to be sure (Charity Navigator gives HonorBound 0 stars, by the way…)
The Wounded Warrior Fund
Another example of how one tiny name change can make a world of difference.
The Wounded Warrior Fund is set up to look like a very real and very legitimate charity… The Wounded Warrior Project.
The Wounded Warrior Project is the real deal. It raises millions of dollars to help vets, and is a well-known and respected organization.
The Wounded Warrior Fund, however? Didn't give money to vets at all. A couple of criminals ran the con in order to fuel their lifestyle, and raised at least $150,000 in just a couple years (and that's just the money that authorities know about.)
Aside from the victims who are tricked by these charity scams, the copycats do damage to the real charities. The Wounded Warrior Project claims that people have second-guessed them as a result of the criminals' hustle, which they had nothing to do with.
These charity scams don't just steal from the average well-meaning individual. They also divert funds that would almost certainly be spent helping other charities instead. By scamming people out of the money they've allocated for charitable giving, scammers indirectly pick the pockets of the most vulnerable.
How to Recognize a Scammer
So now that you know a bit about how these folks operate… how do you avoid falling into their traps?
Some of these charity scams are pretty obvious. You'll know in your gut that something is wrong, or you'll see right through them.
But the subtler ones can make an entire career out of conning the public. There are a few telltale signs that separate charity scams from real operations.
They Aggressively Solicit Donations Over the Phone
Most legitimate charities value their professional image. They know that if they tarnish it, they'll be hurt in the long run. You should always be suspicious of a telemarketer who is pressuring you to spend money now.
Some may actually have be calling on behalf of a charity that really exists. But charities that rely heavily on fundraising services are often hiding dark secrets when it comes to how they're spending those donations they receive.
Thank the person for their call, and tell them that you will research the charity and make a decision then. Do not give out personal information if they push for it.
They Demand You Pay a Certain Way
Most scammers will be trying to get either your money or your info.
If their organization is completely made up, they'll often want you to pay in cash, or with a prepaid card. Possibly even bitcoin or some other cryptocurrency. Credit card charges can be reversed, but with these payment forms, it's harder.
If they're running a scheme to get your personal information, they may send an email that dupes the victim into entering a password or bank account.
If someone tells you about a charity that interests you, the best thing to do is to make notes and then follow up with your own research. Don't assume that a website, email, name or phone number is genuine just because someone hands it to you.
When you research on your own, you may discover that the actual charity uses a completely different site or phone number.
They Can't Tell You Basic Information
Image: by Free-Photos, via Pixabay
A representative of a real charity should be delighted to give you details about that charity. What does it do? Who does it help? Where does it operate and how long has it been in business?
Scammers will probably not have answers to these questions. Sometimes a good scammer will be able to make things up on the fly, so you should still keep your guard up. But if they can't tell you or don't want to tell you, it's an indication that something is off.
They Won't Leave a Number
Most legitimate representatives will also be glad to leave their contact info so you can get back to them. Say you're busy and ask for a number. If they can't or won't give you one, it's because they don't want you to be able to reach them.
That's a very bad sign.
How to Research a Charity
The internet has given scammers greater access to average people that they're looking to dupe. However, it's also given all of us the ability to do a little homework.
If you want to go about ascertaining that a charity is the real deal, you'll want to do a few basic things first.
Find the charity's home site. See if it looks legitimate. Does it even have a site? If not, that's a red flag.
Say someone contacts you with a charity called “Save the California Sparkle Ponies.” (We chose this name because we are confident that there is no such charity, and we don't want to accidentally besmirch the good name of a real charity).
So if you wanted to research this rather fake-sounding organization, the best thing to do would be to go to Google and type in: “save the California sparkle ponies scam”.
Try it with other similar words (such as fraud, fake, claim, or complaint). This is a good way of seeing if the organization exists, and if it has any outstanding complaints against it.
Try it with other similar words (such as fraud, fake, claim, or complaint). This is a good way of seeing if the organization exists, and if it has any outstanding complaints against it.
See if you can get a good idea of the organization's rating on Charity Navigator or Charity Watch. These sites will give ratings based on several criteria, from finance to trustworthiness.
You can also check with the IRS and run a search. This is a resource from the IRS that tells you if they are actually a tax-exempt organization. Many fake charities imply that they are, but they're actually not.
The Tampa Bay Times “Worst 50” List
Image: by mohamed_hassan, via Pixabay
A few years ago, the Tampa Bay Times published a list of the worst charities in America. The paper concluded that, in total, these charities collected $1.35 billion in funds, and kept three-quarters of it for themselves.
Here is a list of the charities they named. Some of these are no longer active, but many are still out there.
If you are contacted by any of these organizations, please be advised that there are almost certainly other better options.
1. Kids Wish Network
2. Cancer Fund of America
3. Children's Wish Foundation International
4. American Breast Cancer Foundation
5. Firefighters Charitable Foundation
6. Breast Cancer Relief Foundation
7. International Union of Police Associations, AFL-CIO
8. National Veterans Service Fund
9. American Association of State Troopers
10. Children's Cancer Fund of America
11. Children's Cancer Recovery Foundation
12. Youth Development Fund
13. Committee For Missing Children
14. Association for Firefighters and Paramedics
15. Project Cure (Bradenton, FL)
16. National Caregiving Foundation
17. Operation Lookout National Center for Missing Youth
18. United States Deputy Sheriffs' Association
19. Vietnow National Headquarters
20. Police Protective Fund
21. National Cancer Coalition
22. Woman to Woman Breast Cancer Foundation
23. American Foundation For Disabled Children
24. The Veterans Fund
25. Heart Support of America
26. Veterans Assistance Foundation
27. Children's Charity Fund
28. Wishing Well Foundation USA
29. Defeat Diabetes Foundation
30. Disabled Police Officers of America Inc.
31. National Police Defense Foundation
32. American Association of the Deaf & Blind
33. Reserve Police Officers Association
34. Optimal Medical Foundation
35. Disabled Police and Sheriffs Foundation
36. Disabled Police Officers Counseling Center
37. Children's Leukemia Research Association
38. United Breast Cancer Foundation
39. Shiloh International Ministries
40. Circle of Friends For American Veterans
41. Find the Children
42. Survivors and Victims Empowered
43. Firefighters Assistance Fund
44. Caring for Our Children Foundation
45. National Narcotic Officers Associations Coalition
46. American Foundation for Children With AIDS
47. Our American Veterans
48. Roger Wyburn- Mason & Jack M Blount Foundation for Eradication of Rheumatoid Disease
49. Firefighters Burn Fund
50. Hope Cancer Fund
What to Do If You've Been Scammed
None of us likes to admit when we've been conned. But if it does happen, there are a few steps you'll want to take as quickly as possible. The scammers may not have used your stolen identity yet, or cashed funds, so there may be time to prevent the worst damage.
Contact Your Bank
If you're not in any immediate danger, this is probably the first thing you'll want to do. Especially if you think the scammers have gotten a hold of your financial information.
Let the bank know by calling directly. Change passwords, put a hold on your card, and follow whatever advice they give.
Contact the Police
Then you're going to want to let the police know. File a report and give as much detail as you can.
Let the IRS Know
We get it. No one actually wants to go out of their way to talk to the IRS even more than we absolutely have to. But in this case, it could be very helpful.
If you're dealing with an issue of identity theft, having the IRS be aware of it early may prevent your identity from becoming tarnished in various public records. Once those get out into the open, it's a lot harder to get them all back under control again.
Let the Better Business Bureau Know
The BBB is an excellent resource in this case. If the charity in question has an established profile on any of the charity watchdog sites (charitynavigator.org, give.org, charitywatch.org) then you should file a complaint with them as well.
Contact the FBI
The FBI monitors crimes of this type and has a complaint center set up on line for problems of this nature.
If your scammer is located overseas, they may not be able to pursue direct justice, but they can use the data in order to understand the pattern and help protect others from being targeted.
The Do's and Don'ts of Donating
DO: Look Up a Charity
Check out charitynavigator.org, charitywatch.org, or give.org.
DON'T: Give Out Personal Information
Especially over the phone, or using a link from an email.
DO: Pay with Credit
There will be a record of the transaction, and this will help protect you in the case of a scam.
DON'T: Give Via Cash or a Wire Transfer
This is much harder to reverse.
DO: Examine the Effectiveness of the Charity
Make sure the majority of their funds are going toward programs you want to support.
DON'T: Assume that Every Charity is Honest
Not every charity has great administration. Many do! But investigate.
DO: Make Your Personal Giving Plan
Plan your finances with charity in mind, and make it part of your budget.
DON'T: Give Big During Emergencies
Emergencies often raise more funds than needed, and also bring many scammers.