spending

How to Avoid Charity Scams

Several Web sites help you check up on charities that solicit donations for victims of the latest disaster.

I got a phone call asking for money from a group that says it’s helping the victims of the floods in South Carolina. How can I check out whether this charity is legitimate?

Don’t pledge money to an unknown charity over the phone or click on a link in an e-mail. The IRS recently issued a consumer alert about possible scams relating to the South Carolina floods. Scam artists have been making phone calls, sending e-mails and creating fake Web sites posing as charities that are collecting money to help victims of the floods. Some of these crooks won’t stop at stealing your money; if they get your credit card, bank information or Social Security number, they could also steal your identity.

Several Web sites make it easy to check whether the charities are legitimate and to find reputable ones that are doing similar work. Most of these sites also analyze the charities’ financial situations and rate their effectiveness.

CharityNavigator gives star ratings to more than 8,000 charities based on the charities’ financial health, accountability and transparency. The site highlights key information from each charity’s income statement and calculates the percentage of total expenses spent on programs and services, the growth of revenue and expenses, and other factors. You’ll also find tips for donors and lists of top-rated charities based on timely issues, such as the South Carolina flooding and the Syrian crisis.

The Better Business Bureau’s Wise Giving Alliance analyzes charities based on 20 standards, in categories such as governance and oversight, effectiveness, finances, solicitations and informational materials, privacy and complaints.

CharityWatch.org analyzes charities’ financial statements, tax forms, annual reports, state filings and other documents and grades charities based on the percentage of total expenses the charity spends on its program and the cost to raise $100. You can also find detailed reports on its top-rated charities.

GiveWell assesses charities based on the evidence that their programs produce results. It was created by former hedge-fund analysts. See How to Measure the Impact of Your Charitable Donations for more information.

Guidestar.org has the most detailed information about charities of all these organizations. It includes a searchable database of each charity’s Form 990, where it must report its financial information to the IRS. You can access basic information free, get more detailed information through its subscription service, or buy a detailed report about the charity. (You may be able to access the subscription service through a donor-advised fund.)

Most Popular

Election 2020: Joe Biden's Tax Plans
taxes

Election 2020: Joe Biden's Tax Plans

With the economy in trouble, tax policy takes on added importance in the 2020 presidential election. So, let's take a look at what Joe Biden has said …
October 15, 2020
11 Home Features Today's Buyers Want Most
home

11 Home Features Today's Buyers Want Most

Thinking about selling your house? Here are several home features potential buyers are coveting right now.
October 16, 2020
Will Joe Biden Raise YOUR Taxes?
taxes

Will Joe Biden Raise YOUR Taxes?

There's little doubt that, if elected, Joe Biden will try to raise taxes for some people. Will you be one of them?
October 16, 2020

Recommended

The Ways Pets Improve Our Retirement Well-Being
Empty Nesters

The Ways Pets Improve Our Retirement Well-Being

Getting pet-friendly when you leave the work world may give you a healthy boost.
October 14, 2020
9 Tips for Better Time Management in Retirement
retirement

9 Tips for Better Time Management in Retirement

These important time management techniques will help destress your life as you get busier -- yes, busier -- in your golden years.
October 14, 2020
The Ultimate Guide to Amazon Prime Day 2020: When It Starts, the Best and Worst Deals, Competing Events, More
spending

The Ultimate Guide to Amazon Prime Day 2020: When It Starts, the Best and Worst Deals, Competing Events, More

In a first, the giant retailer has pushed Amazon Prime Day this year from July to October, effectively launching the holiday shopping season weeks ear…
October 8, 2020
Retirees' Guide to Giving for the Greatest Impact
Making Your Money Last

Retirees' Guide to Giving for the Greatest Impact

The need for charity is climbing, particularly to combat the rising poverty, hunger and homelessness from the pandemic’s economic fallout. Here's how …
October 7, 2020