How to Make Sure Your Money Goes to a Legitimate Charity

Many Americans enjoy donating to charity each year and many other Americans benefit from their generous donations.  However, each year we also hear about dishonest people who have started an organization that is made to look like a legitimate charity but is instead a means for personal gain that doesn’t benefit any charitable group.  Therefore, it is important to investigate any charity to which you are thinking about making a donation.

Ask Questions

If you get an unsolicited phone call asking for a charitable donation then the first thing that you should do is to start asking questions.  Request that the caller send you written information.  A legitimate charity will be able to send you information about its mission and its work.  The caller should also be able to answer questions about how the charity’s money is spent.

Be aware that many illegitimate charities have names that are very similar to legitimate and respected charities.  This is designed to confuse you and to encourage you to send money without asking a lot of questions. 

It is especially important to exhibit caution if the charitable request comes via e-mail or comes right after a major disaster.  While some legitimate charities certainly solicit money after a disaster and do so via e-mail, remember that a legitimate charity will gladly accept money from you in the weeks to come and should not be putting immediate pressure on you to contribute right away. 

Research the Charity

    State Attorneys General have charitable divisions that maintain information about both legitimate charities and fraudulent entities that have posed as charities in the past.

    The Better Business Bureau (BBB) has similar information to the state Attorneys General offices and can answer questions over the phone or via their website.  The Philanthropic Advisory Service Reports is maintained by the BBB’s Wise Giving Alliance and has information on charities including a description of their programs, finances and fundraising methods.
    The American Institutes of Philantrhopy (AIP)
rates more than 400 different charities in the United States.  Its ratings take into account the amount of money that actually reaches the people or causes supported for the charity.
The Guide Star National Database of U.S. Charities
has Basic information about more than 600,000 legitimate U.S. nonprofit organizations.

Tax Donations

In order for you to take the tax deduction for your donation on your federal tax return, the charity needs to be operating as a charity pursuant to section 501(c)(3) of the Internal Revenue Code.  Also, it is a good idea to pay by check so that you have a record of the transaction for your file.  Further, a check prevents cash from being diverted from the stated charitable purpose and your credit card number from being used for unauthorized purposes.

Reporting a Fake

It is important that people consistently report solicitors that are actually fraudulent charities.  That way the groups can be forced to stop accepting money from well meaning Americans.  Complaints regarding possible fraudulent charities should be filed with the state Attorney General’s office.  Information can also be provided the BBB who will investigate the allegations and use the information to update its information for other concerned donators who are researching charitable causes.

For more information on legitimate charities, contact a consumer protection attorney today.

The information on this page is meant to provide a general overview of the law. The laws in your state and/or city may deviate significantly from those described here. If you have specific questions related to your situation you should speak with a local attorney.

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