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Ways to avoid local and global charity scams

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As we have become more globally interconnected, worldwide tragedies affect more of us. We have family and friends scattered across the globe. We want to support and help them, especially in troubled times.

But those connections can have a dark side.

Crooks take advantage of our goodwill. Fraudsters tout fake charities to worldwide victims, seeking to divert much needed help into their own malicious pockets.

After disasters, the Internal Revenue Service regularly reminds taxpayers to be alert for such cons. Fake charity scams also are, sadly, a perennial on the IRS' annual Dirty Dozen list.

Convergence of anti-fraud efforts: Today, Giving Tuesday 2023, the U.S. tax agency reiterated its continued support of international efforts to fight fraud and charity scams. This week, Nov. 27 through Dec. 1, also is the IRS' and its Security Summit partners' eighth annual National Tax Security Awareness Week, as well as Charity Fraud Awareness Week.

The week-long charitable fraud focus is helmed by the Fraud Advisory Panel, a United Kingdom-based organization that describes itself as "the voice of the counter-fraud profession, committed to tackling fraud and financial crime." The panel is itself a registered charity in England and Wales.

International crime schemes that target donors to nonprofit organizations are not new. They also continue to evolve globally.

In addition to hurting donors, charity-focused fraud is costly to the legitimate nonprofits. Charities that work internationally face an increased risk of fraud, theft and looting because of the complexity of working across borders, where there may be fewer controls or where local conditions make it more challenging to apply controls, says the Fraud Advisory Panel.

Individual anti-fraud efforts: When it comes to those of us who are targets of chartable scams, the basic advice still holds. Verify before you give.

"Unfortunately, charity scammers look for opportunities to take advantage of situations, such as natural disasters, when exempt organizations are making an effort to help," noted IRS Director of Exempt Organizations and Government Entities Robert Malone in a statement of the U.S. tax agency's support for the international Charity Fraud Awareness Week.

"Donors and charitable organizations alike should remain vigilant to protect their assets from fraudsters," added Malone.

In an earlier post about how global disasters mean even more charitable scams, I list some ways to avoid becoming a fraud victim. Here are three key anti-scam tips.

  1. Take your giving time. Yes, those affected by disasters need immediate attention and help. But you want to make sure your gift is going to do that. Scammers typically pressure people for an immediate donation. Don't do it. Don't feel rushed. Legitimate charities are happy to get a donation at any time.
  2. Be wary about how a donation is requested. In addition to applying pressure to donate, con artists also ask that gifts be made in unusual ways. Typical criminal requests are for donations by giving numbers from a gift card or by wiring money. The safest way to give, and which is accepted by all genuine nonprofits, is by credit card or mailed check.
  3. Verify the charity first. Of course, you never want to give without first confirming that the charity if real. Scammers frequently use names that sound like well-known charities to confuse people. Ask for the charity's exact name, website, and mailing address so you can independently confirm the information. Then use the IRS' online Tax-Exempt Organization Search (TEOS) tool to verify that the organization is a legitimate, IRS-approved 501(c)(3) charity. You also can use private philanthropy trackers, like those provided by Candid/GuideStar and Charity Navigator, before making any donations.

My aptly titled post Don't fall for disaster charity scams, published following Hurricane Ian's lashing of Florida in September 2022, has more on how to avoid being a charity con victim.

Safely giving internationally: As for giving to those in other countries that need help following a disaster or other tragedy, check out my aforementioned global disasters post. It details ways to give, notably a U.S. tax law workaround that could allow you to deduct your donation if you itemize instead of claim the standard deduction.

Basically, you should give to an IRS-approved U.S. organization with tax-exempt status and which has a special fund designated for overseas relief efforts. These include —

Charity Fraud Awareness Week 2023

And if you're an international reader, hello, and check out the Charity Fraud Awareness Week's page of resources. It has links to charitable resources in Australia, New Zealand, the United Kingdom, and the United States.

Thanks for giving, domestically and globally, generously and wisely.

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