You want to give to charity. How to do it smartly and not be scammed

We’ve all heard stories of charitable giving scams.

The national organization that solicited money to fund veterans’ suicide prevention programs but instead used donations to line the pocket of its founder. Or the secretary of a group convicted for funneling donations for his personal gain. Or most recently, the couple who conned well-meaning givers into donating to a GoFundMe page to rescue a homeless man, who also happened to be in on the scam.

Donating can be fraught with all kinds of fraud — but it doesn’t have to be. The key is research. A smart donor, experts say, scrutinizes the intended recipient as carefully as she studies vacation venues or 401(k) investment possibilities.

“A smart donor has nothing to do with how much or how often you give,” says Ashley Post, spokesman for Charity Navigator, a charity evaluator that rates thousands of charities by evaluating their financial health and accountability. “A smart donor is someone who does his due diligence before giving.”

Catherine Hollander, a senior research analyst for GiveWell, another charity evaluator, puts it this way: “We tell people to give proactively, not reactively. Don’t give just because you got a call or because you read about a disaster. You need to do your research.”

By and large, most organizations are trying to do the right thing, but some do it more effectively than others.

“We think it’s important for givers to look at organizations with clarity,” explains Gabe Cohen, senior marketing director of Candid, the new organization that resulted from a recent merger between the Foundation Center and GuideStar, known for its trove of reports and tax forms for charities.

“You want to make sure your money is making the maximum impact.”

Individual donations matter

As a society, we’re a charitable lot. In fact, for many donors, writing out a check, or two or three, is an annual rite. It’s often part of a deeply held belief that giving is good karma, that sharing good fortune is what truly makes us more human and humane. What’s more, charity plays an important role in most religions, a basic tenet that forms community.

Giving also makes us feel good, according to science. Published studies have shown several health benefits associated with the giving of our time or treasure, including lower blood pressure and stress levels, less depression and increased self-esteem.

While foundations and uber-wealthy philanthropists get lots of media attention, many donations actually come in smaller amounts. In fact, the largest source of charitable giving in 2018 came from individuals, at $292.09 billion, or 68 percent of total giving, according to the National Philanthropy Trust. This was followed by foundations ($75.86 billion/18 percent), bequests ($39.71 billion/9 percent), and corporations ($20.05 billion/5 percent).

This kind of generosity holds true even at the local level. The Miami Foundation, founded in 1967 to guide the giving of people passionate about Miami, considers “everybody as a potential philanthropist,” says Rebecca Mandelman, the foundation’s vice president for strategy and engagement. “We’re not into a specific donor type or number. There’s no minimum to set up a fund.”

The foundation manages assets earmarked for the community’s needs and it has awarded millions in grants. It works with corporations as well as families and individuals to create personalized funds or to direct money to already existing funds. The foundation has more than 1,000 personalized funds under its stewardship.

Give Miami Day

One of its signature programs is Give Miami Day — scheduled this year for Thursday, Nov. 21 — a 24-hour online event to encourage donors to support local nonprofit organizations. Last year, Give Miami Day raised $11.5 million from 20,795 donors, topping the previous year’s fundraising record of $10.1 million by more than a million dollars.

“We sometimes hear that Miami is not a generous community,” Mandelman says, “but that hasn’t been our experience. It’s tremendously generous.”

The foundation, she adds, has been steadily growing since its inception, a result of a young city maturing and evolving. “Those who have built their wealth in Miami are giving back,” she says.

But it’s not just the wealthy. People with strong ties to the community often donate to their favorite charities. “People want to invest in the community they love and live in,” she says.

The key, though, is to give wisely and in a way that means something to you. “You can pretty much always find an organization that is working on something that you feel passionate about,“ says Charity Navigator’s Post. “They’re certainly out there.”

While many donors are enrolled in monthly giving programs, most of us wait for the end of the year, keeping an eye on tax deductions for those who itemize on their federal forms. About 30 percent of annual giving happens in December — 10 percent in just the last three days of the year.

Be wary of natural disaster pitches

Disasters are also a big catalyst for donations. About 30 percent of U.S. households made a disaster-related donation in 2017 and in 2018, according to a study by The Center for Disaster Philanthropy (CDP), Candid and the Indiana University Lilly Family School of Philanthropy. More than a fifth of those donated to disaster aid efforts in both years.

Unfortunately, disaster giving also tends to attract fraudsters, who take advantage of people’s goodwill. Usually within hours of any catastrophe, hundreds of websites and telemarketers will spring up in hopes of grabbing a piece of the giving pie. The Federal Communications Commission typically warns consumers of fraudulent charities posing as legitimate disaster relief organizations.

After Hurricane Dorain decimated the Bahamas, Florida Agriculture and Consumer Services Commissioner Nicole Fried — and her counterparts in other states — issued a press release to alert consumers about potential scams, including more than 140 new Hurricane Dorian-related charities soliciting on online platforms like GoFundMe.

“We tell people, yes, give with your heart,” says Cohen of Candid, “but also give with your head.”

Charity watchers, however, say fraudsters shouldn’t stop you from giving — but they should make you more careful about who and how you donate.

“The overwhelming majority of organizations do good and important work,” Post says. “We want to encourage donors to think about them.”

How to be a smart donor

Want to be a smart giver? Here are some tips about making your donation count.

▪ Do your homework. This means spending time researching before you open your wallet. You can do most of this online. Start by visiting CharityNavigator.org, which rates and analyzes thousands of charities of all sizes. Then try GiveWell.net, which focuses on how well programs work and how they impact the people and causes they serve. Another very useful site: Candid.org, which is the result of a recent merger between Foundation and GuideStar. It has reports and tax forms for charities. A last stop should be the Better Business Bureau’s Wise Giving Alliance.

▪ Google the name of the charity as well as the organizer or founder and any board members listed. New stories — good or bad — should come up. Are there complaints? Irregularities? Pending investigations? In Florida, go to the Department of Agriculture’s Check-a-Charity tool (https://csapp.800helpfla.com/CSPublicApp/CheckACharity/CheckACharity.aspx_ or phone the toll-free hotline, 1-800-HELP-FLA (435-7352)

▪ Ask questions. Watchdogs say you can get answers online or, better yet, by calling the charity. Are they a registered public 501(c)(3) organization? What is the charity’s EIN, a nine-digit employer identification number assigned by the IRS? (You can use this number to do research on charity watchdog sites.) If the organization doesn’t have one, don’t donate. Also ask: What is the organization’s mission? Specific programs? Successes? “If they’re dodgy on the phone, that’s a red flag right there,” says Post of CharityNavigator.org.

▪ Look for programs that have the most impact in relation to the money donated.

▪ Don’t donate over the phone. Confirm, confirm, confirm the plea’s legitimacy first. “Don’t give just because you get a call or you get an email with a request,” says Hollander of GiveWell. “You shouldn’t feel pressured to give that very moment.

▪ Choose charities that have a proven record of disaster relief when one happens. “You want them to have boots on the ground,” Cohen says. “Organizations that are already connected and can get resources to people who need it as quickly as possible are the best. They’re less likely to encounter the logistical problems of getting the aid where it belongs.”

▪ Give cash instead of goods such as clothes and household items. Cash gives a charity more options. Besides, shipping and sorting the items can be a big expense for the organization — and it may not address the need anyway.

▪ Investigate how much a charity spends on overhead, but don’t equate low overhead with impact. It certainly shouldn’t be the only factor that determines where you’re going to give. “It takes money to run an organization,” Post says, “so it’s not helpful to focus on just the overhead.” She suggests a benchmark of 75 percent or more of donated money going directly to programs.

▪ Give without restrictions. “It’s possible to earmark for a particular cause,” says Hollander, “but we suggest giving with no strings attached, to be used where it’s needed most.”

▪ Widen your donation possibilities. Not every worthwhile cause grabs headlines. Look at local possibilities. If you do plan to give within your community, consult your local community foundations, where staffers can guide how and where to give.

▪ Contact the Federal Trade Commission or your state attorney general’s office if you suspect fraud.

▪ FTC: Consumer Response Center: 877-382-4357

▪ Florida Attorney General Hotline: 866-966-7226

Or the Consumer Protection Division website:

http://www.myfloridalegal.com/pages.nsf/Main/18A7753257FE439085256CC9004EC4F7