Charitable Donations, Give Wisely: Tips to Avoid Fraudulent Scams

The Association of Fundraising Professionals (AFP) is encouraging the general public to contribute to tsunami relief efforts, but urged donors to use caution when giving to avoid potential scams.


AccountingWEB is pleased to bring you tools that can help systematize the accounting department of a small company, corporate business or a public accounting firm. Over 200 accounting department policy templates, written in Microsoft Word format by PolicySoft, are available individually or in groups for immediate download.

Accounts Payable General Accounting Department
Accounts Receivable General Ledger
Credit & Collections Payroll
Fixed Assets Shipping & Receiving

"After this unprecedented tragedy, donations of money and supplies are greatly needed," said AFP President and CEO Paulette V. Maehara, CFRE, CAE. "Americans are a very generous people and always respond positively to these types of crises, but they should also be vigilant and informed in their giving."

Maehara stressed that potential donors should know two things before they give to any organization:

  1. Is the organization they're supporting legitimate; and,
  2. Will the funds they're giving be used in an appropriate way, consistent with their intent?

Regarding the latter point, some organizations might be concentrating on relief efforts only in certain countries, or emphasizing certain aspects of the relief efforts. In some cases, charities may have already received enough funding for their relief projects and may encourage giving to a general fund, where the money might be used for future disaster relief.

"There's nothing wrong with that as long as the charity tells you upfront how your money will be used," said Maehara. "If you want your money to go to a certain country or particular effort, make sure you know exactly what the organization is doing and who or how it is helping."

But first, donors should determine whether or not the charity they're supporting is legitimate. Many national and international charities are household names. However, the Internet has allowed individuals and smaller groups to organize local efforts that are equally worthy, but not as well- known.

"Ninety-nine percent of the organizations who are working on tsunami relief efforts, even those you haven't heard of, are legitimate," said Maehara. "But as we saw with the 9/11 relief efforts, there are always a few unscrupulous scam artists who would seek to take advantage of American generosity and make a quick buck at the expense of others."

To avoid fraudulent organizations and ensure contributions will be sent to a legitimate organization, Maehara recommended the following tips:

  • When giving at a website, make sure the site is secure and that your personal information cannot be seen or stolen by others. Make sure the website itself is legitimate; sometimes scam artists use similar but slightly different names or domain names.

  • When giving via the phone, obtain a phone number for the charity and call the number to ensure the number is legitimate.
  • Be aware of organizations with similar sounding names. 'United Wayfarers' for example, sounds similar to 'United Way' but it may be a completely different charity or simply a fraudulent organization.
  • Be suspicious of callers and organizations that talk about having 'tax i.d. numbers' or other official-sounding information. Lots of organizations have 'tax i.d. numbers' but that doesn't mean they are charities.
  • Do not give to an organization that promises to have a driver come immediately to your home or office and pick up a check. That's usually a sure sign of fraud.
  • Report suspicious activity to your local police and/or state Attorney General's office.

Maehara also suggests asking if the fundraiser is a member of AFP and follows AFP's Code of Ethical Principles and Standards of Professional Practice, or a similar code, and if they abide by the Donor Bill of Rights. "The vast majority of the fundraising profession practices ethical fundraising," stated Maehara. "If donors know that they're working with one of these fundraisers, then they'll know that they are giving to a legitimate organization."

More information on charitable giving and evaluating a charity can be found on the AFP website under "National Philanthropy Day -- About Giving."

You may like these other stories...

Event Date: May 29, 2014 In this presentation Excel expert David Ringstrom, CPA brings you up to speed on the Excel feature you should be using, but probably aren't. The Table feature offers the ability to both...
No field likes its buzzwords more than technology, and one of today's leading terms is "the cloud." But it's not just a matter of knowing what's fashionable. Accounting professionals who know how to use...
There is a growing trend of accountants moving away from traditional compliance work to more advisory work. Client demand is there, but it is up to the accountants to capitalize on that. What should accountants' roles be...

Upcoming CPE Webinars

Apr 22
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
Apr 30
During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.