You've watched hours of coverage about the latest natural disaster on the news, and your heart aches for the people impacted by the storm. Suddenly your phone rings and the caller describes a way you can help the victims. The request is compelling, the organization sounds familiar, you want to help and you start to reach for your wallet. Hold on a minute! Hold on to that desire to take action. Otherwise, what seems like a very good deed could actually be a not-so-good thing.
We're all trying to be pretty smart with how we spend our money when it comes to personal purchases and investments. We take time to read product reviews, compare prices, and talk to friends. When it comes to investments we seek out articles, track trends, and do our own research. When it comes to giving, we should be equally as smart.
Charitable giving can be very emotional, but it's important to approach it calmly so that the emotions you end up feeling are positive, not frustrating, ones. It turns out that the aftermath of a storm is not only a vulnerable time for the victims of the catastrophe, but also for well-meaning givers who are surprisingly susceptible to being taken advantage of by fraudulent schemes. Here are some easy tips to help you navigate giving, whether it follows a natural disaster or not.
Hold the Phone on Telemarketers
When you receive an inbound phone call, it's never a good idea to give your credit card number or any personal information. In addition, commercial telemarketing companies working on behalf of charities retain 40% or more of pledged dollars.
An inbound phone call can serve as a reminder that it's an important time to donate. But hang up, do your research, and then donate directly to the organization of your choice, ensuring 100% of your donation achieves a charitable purpose.
Avoid Opportunistic Scammers
After Hurricane Katrina, shockingly, more than 4,000 fraudulent websites were launched. They employed effective tricks, like using names that were very close to legitimate charities. It became such a pervasive problem that the FBI issued tips on how to help you avoid the scams. Some of their advice includes:
- Do not respond to any unsolicited (spam) incoming emails or click on links contained within those messages.
- Be cautious of individuals representing themselves as victims or officials asking for donations via email or social networking sites.
- Beware of emails that claim to show pictures of the disaster areas in attached files, because those files may contain viruses. Only open attachments from known senders.
- Avoid cash donations if possible. Pay by debit or credit card or write a check directly to the organization.
- Keep in mind, most legitimate charities maintain websites ending in .org rather than .com.
Do Your Research
Only about a third of donors research the organizations they support. The good news is there are online resources that provide links to non-profits, compile financial information, identify non-profit scams and report on abuses. Three online resources are Charity Navigator, Charity Watch, and GuideStar.
Align Your Giving With Your Values
If you think about your charitable giving as a pie, you could look at part of the pie as going to non-profits that serve acute needs, such as those who provide direct services (food, medicine, etc.) to people who are effected by a natural disaster or acts of war. You can then take your time to look at the other pieces of your “charity pie.” For example, if your family has been touched by cancer you may feel strongly about supporting a non-profit in that area. You could decide as a family whether you want your money to go to an organization that does research, one that provides help to families living with cancer, or some other aspect.
You may also consider looking into giving circles. These have been gaining popularity over the past few years. A giving circle is a group of individuals who pool their money to support an organization. Frequently giving circles are connected to a non-profit. I recently began participating in one because I love the hands-on, democratic process and how well I can align my giving with my values. All contributing members review each grant application, discuss the applications, see how they compare to our pre-defined criteria, and then each member votes. One of the programs we funded is designed to teach finance, money, and budgeting to girls that were aging out of foster care. It's very fulfilling to be so directly involved in selecting the program that will receive the funds and also being able to follow up on their work.
When you do a little planning and take smart action on charitable giving, you’ll help others and keep yourself out of the storm.