The good news? It turns out Americans are a charitable bunch, donating $471 billion to charities in 2020 according to Giving USA. Only a fraction of that money, about 20%, came from corporations. People making less than $50,000 a year gave more in relation to their total income than all but the top earners.
The bad news? Some investigations have shown scam charities are taking in up to a billion dollars a year, all from people trying to do the right thing. How do these scams work? And how can you avoid them?
Here & Now's Deepa Fernandes talks to Laurie Styron, executive director of CharityWatch.
Tips to avoid charity scams from CharityWatch's Laurie Styron
- Be on higher alert when donating to popular causes. Scammers often choose charity names that sound like those of well-known legitimate charities. Some of these charities might even be registered, but that doesn't mean they're using the money efficiently.
- Donate proactively, not reactively. Don't just donate where you're asked to; research charities that work with causes you care about and see where their money goes.
- Be wary when you receive frequent direct solicitations from the same cause. It's expensive to send direct mail — particularly with gifts — and could indicate that money is being spent primarily on overhead.
- Avoid crowdfunding sites when possible, even for legitimate causes. They don't have to follow the same regulations as most charities and there's no way to know where your money is really going.
- Beware of long lists rating charities. Since the data is often self-reported by the charity, the information is not necessarily accurate. It's safer to go to watchdog sites like CharityWatch or Charity Navigator.
- Donate with a credit card so you can dispute fraudulent charges easily, if necessary.
This segment aired on November 24, 2022.