How to Choose a Legitimate Charity

Although many charities are reputable, there are plenty of scammers out there as well. These con artists create the illusion that they run a legitimate charitable organization in an attempt to scam cash donations from unsuspecting people. There are a few things that you can do to help you separate legitimate charities from scams.

Things You'll Need

• Internet

Instructions

1. Ask for literature. It doesn't matter if you've gotten a phone call from a charity or you're researching a charity on the Internet -- always ask the organization to send you literature in the mail. This gives you the opportunity to investigate the charity before you make a donation.

2. Review the charity's financial reports. Every legitimate charity should make its financial reports available to potential donors. This report may be available upon request, or it may be posted on the organization's website. The report should tell you how much of the charity's money is actually being donated to the cause and how much goes toward operating expenses such as administrative salaries. The best charities tend to give a large percentage of their funds to the actual cause and use a smaller percentage for administrative costs.

3. Ensure that the charity is non-profit. An organization must submit Form 990 to the IRS to be considered a non-profit. Ask the charity for a copy of this form. Choosing a non-profit organization helps ensure that your donation is tax deductible.

4. Check with your local Better Business Bureau. The national Better Business Bureau rates some of the larger charities, but if the charity you're considering is local, find the local Better Business Bureau (BBB) in your Yellow Pages. The BBB will tell you if the organization has any negative reports.

Tips & Warnings

• The best charities tend to give a large percentage of their funds to the actual cause and use a smaller percentage for administrative costs.

• Choosing non-profit organization helps ensure that your donations are tax deductible.

• The national Better Business Bureau rates some of the larger, national charities.

• In many cases, choosing a local charity will allow you a chance to learn more about the organization. You'll be able to ask friends and neighbors about their experiences with the charity.

• Never give out your credit card or bank information to a charity solicitor who calls you on the phone. This is a common scam tactic.

References

• BBB: U.S. and Canada