Andrew Ticknor of Sioux Falls is a volunteer within his local community and for several charities. In the following article, Andrew Ticknor explains the importance of evaluating nonprofit organizations before donating to them to avoid scams.
Last year, Americans gave a whopping $499.33 billion to legitimate charities where every single cent went toward a worthy cause, according to the Giving USA 2023 Report. However, each individual must conduct thorough research into their chosen nonprofits so that they can avoid scammers posing as charitable entities.
Being particularly prevalent after far-reaching disasters, charity fraud happens all the time, stealing people's hard-earned dollars for selfish, personal gain.
Andrew Ticknor of Sioux Falls Says Sometimes, Nonprofits Aren't What They Seem
Nonprofit scammers aren't new, but they've certainly become more sophisticated as technology has advanced. They're able to pose as legitimate charities with relative ease, fooling many people into donating.
However, Andrew Ticknor of Sioux Falls says that it isn't always about wholly unscrupulous entities. Sometimes, legitimate nonprofits spend their money in unexpected ways a more common occurrence than most might believe. The worrying part is that it doesn't take much digging to unearth the facts.
ProPublica has detailed a bunch of charities with money-spending habits that didn't quite line up with how they had been advertising. Namely:
- St. Jude Children's Research Hospital keeps billions in reserves
- A nonprofit college splashed the cash on marketing rather than financial aid
- The Red Cross built only six homes after raising millions for disaster relief in Haiti
And these are just the tip of the iceberg.
Andrew Ticknor of Sioux Falls explains that the majority of charities are scrupulous, legitimate entities just trying to make the world a better place for underserved communities. Individuals just need to research properly to ensure that their money is going to the right places.
Avoiding Charity Scams by Thoroughly Researching
Whether they're operating entirely outside the law or simply being untruthful about their use of donations, donors can avoid these untrustworthy entities by using the expert-given advice below.
Knowing the Telltale Nonprofit Scam Signs
Andrew Ticknor of Sioux Falls says that without understanding the elements that reveal the truth behind a charity scam, people can't avoid them effectively.
While different unscrupulous organizations adopt all sorts of tactics, the most common signs of a nonprofit scam are as follows:
- They thank people for donations they can't remember making. It's a common tactic implemented by unscrupulous charities to trick individuals into thinking they've already given to a cause.
- Callers that pressurize individuals to donate immediately.
- They make many vague sentimental claims, but with very few details or specific stories. In other words, they're never specific about how donations are used.
- Illegitimate charities may request donations via wire transfer or gift card.
- They guarantee the donor will win a sweepstake prize if they donate.
Checking Registration
Andrew Ticknor of Sioux Falls notes that depending on the state, charities may need to register with their dedicated regulator. If they aren't listed with the regulator, then they aren't a legally owned and operated nonprofit business.
Experts recommend also establishing the entity's IRS status. Most nonprofits are classified as 501(c)(3) organizations. This category ensures the establishment is exempt from specific state and federal taxes.
However, if a charity isn't listed as this type of nonprofit, that doesn't necessarily mean it's a scam. The IRS has a variety of nonprofit organization classification codes. Social welfare organizations, for instance, fall under the 401(c)(4) umbrella.
Andrew Ticknor of Sioux Falls explains that individuals should carefully check a charity's IRS status before donating their hard-earned dollars.
Confirming Reputation
Google can easily be the best friend of a soon-to-be-donor, as it remains the perfect way to discover an entity's true reputation. Searching the charity's name plus "fraud," "scam," "review," "complaint," or "rating" tells people everything they need to know.
Any bad reviews shouldn't be taken lightly. Instead, take them to heart and look for a different organization that is worthy of support.
Be Wary of Phone Call Fundraisers
Andrew Ticknor of Sioux Falls also notes that sometimes, charities cold call even numbers on the National Do Not Call Registry. However, individuals
should always be careful about the information they provide and be sure to conduct thorough research before giving away any cash.
In this scenario, useful questions are as follows:
- What is the charity's exact name, mailing address, and web address?
- How much of the donation goes into the actual program?
- Are they fundraising for a charity or a PAC (Political Action Committee)?
- Is the donation tax-deductible?
Those providing succinct, truthful answers are simply trying to raise money for an important cause.
Find a Charity Scam? Report It.
Those who come across nonprofit scams during research should
report them to their state's charity regulator and the FTC.
