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Charitable giving grew in 2021. According to Blackbaud Institute, a social good innovator, giving not only increased after COVID-19, but actually rebounded more than it had in a decade – increasing in the United States by 9% overall.
Annual private philanthropy as a percentage of GDP is about 1.44% in the United States. Philanthropy Roundtable reports that rate in Canada is 0.77%.
People tend to give the most to charity at the end of the year. While legitimate organizations may step up their solicitation of donations at this time, scammers also realize the months of November and December is prime giving season. So many scammers increase their deceptive tactics to cheat unsuspecting individuals at this time of year.
Here are four common charity scams that every prospective donor should be aware of.
1. Impersonating another charity: Most philanthropic groups have an online presence in some shape or form. Scammers will replicate the look of the charitable group’s website or social media account, or may contact you through email or text to solicit funds. Thinking it is a legitimate charity, you may follow a link to enter donation information.
To avoid this scam, do not click on any links. Rather, enter the exact email address of a charity, if you know it, or use a trusted resource like Charity Navigator for contact information. If you’re still leery about online transactions, call the charity and ask to be sent a donation statement in the mail, which you should be able to mail back postage-paid.
2. The hard sell: A legitimate charity is happy to welcome a donation any time you’re able to give it. A scam operation may employ a hard sell or a deadline by which the donation must be made. In addition, a fraudulent “charity” might ask for payment only by cash, gift card or wire transfer (because it is difficult to trace), and this should raise a red flag that something is amiss.
3. A thank-you for your donation: AARP warns that some scammers will send you a thank-you for a donation that you supposedly already made to entice you to give again. This is designed to lower your inhibitions about a soliciting charity. It’s always a good idea to keep records of charitable giving, especially for tax-related reporting, so you can easily verify if you gave to a group in the past.
4. Cryptocurrency wallet: As methods of making payments change, scam groups often ride the wave. The Federal Trade Commission learned that when the government of Ukraine announced it would be accepting donations to support their efforts via a cryptocurrency wallet, scammers started getting in on the action. But instead of the funds getting sent to the government’s wallet, the donations headed to a private wallet.
Always conduct an online search of the wallet address to confirm that money is being sent to the right place. Typically, you can’t reverse cryptocurrency payments, so due diligence is required.
Individuals need to be extra cautious with charitable giving to avoid common scams.