How Military Officers Can Avoid Charity ScamsManaging Your Finances
Many military officers support charity through the CFC. Many also support charities directly. In December the combination of the tax savings associated with charitable giving and the general "mood" of the season can increase the desire to give. But before you do, ask yourself this question.
Are they trying to scam me?
Unfortunately, a stream of fake charities continuously pop up during the holiday season and in the wake of national and international disasters to take advantage of good-hearted people who want to help. Reports of mismanaged charities and outright charity fraud often make the news and leave many people with doubts about which charities are legitimate and which ones are run only to help the scammers behind them.
Is the solution to stop giving?
No. It is critical for the members of the military to financially support real charities which are doing good works around the world. It only takes a few extra minutes of time to ensure your money is going towards a real cause. Here's four things you can do to lower the risk of charity fraud next time you want to give back.
1. Utilize Charity Watchdog Groups
Before donating to any new charity, check the organization out at a charity watchdog website. These watchdogs can help you to separate official charities from potential scams. There are several watchdog groups online, and each one uses different criteria to rate charities. Watchdog groups do not cover every real charity in the U.S., so you may want to search on a couple of sites before making up your mind. Four of the most well-known and trusted charity watchdogs are:
2. Always Donate via the Charity's Official Website
It is not unusual for a person to approach you on the street to solicit a donation for a well-known charity. Often the person is wearing a shirt from the organization and may even be distributing literature with the charity's name on it. However, that doesn't necessarily mean you are not dealing with a scammer.
In this situation, it is best to avoid giving directly and instead ask for the website of the charity so you can contribute online later. If the person is reluctant to provide the information or pressures you to donate immediately, it is most likely a scam.
Also, never follow a link from a social media post to donate. Many scammers create links to spoof website which resemble the real charity's site to fool people into contributing.
3. Confirm They're Doing What They Say They're Going to Do
Many worthwhile local charities won't appear on any watchdog safe lists because they are just too small to monitor. That doesn't automatically mean that are not real charities or that you should not support them. However, before giving money to any local charity which is not on a watchdog safe list, do yourself a favor and double check with the people the charity claims to be helping. Besides making sure the charity is legitimate, you may discover that bypassing the charity and donating directly to the local organization is the better option.
4. Verify the Charity's Nonprofit Status
Donating money to a worthy cause is a great way to assist other people in need, but, as mentioned above, it can also help reduce your tax bill. When you contribute to a nonprofit charity which is a registered as a 501(c)(3) tax-exempt organization, you can write off your contribution. However, be careful. Some scammers will tell you that donations to their organization are tax deductible even when they are not, resulting in a situation which may cause trouble when you try to take deductions on your taxes. You can find out more about which types of donations are tax deductible by contacting the IRS directly.
To verify the 501(c)(3) status of any charity in the US, use the Tax Exempt Organization Search tool on the IRS website.
With a little additional effort, you can prevent scammers from profiting by exploiting your goodwill.
If you enjoyed this article, you might also enjoy the following blog posts:
5 Questions Military Officers should ask before becoming a Cosigner
Military Finances 101: Understanding Gifts and Gift Taxes
4 Things Every Junior Military officer should know about Money
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