Tough economic times and trends in holiday giving are leading to unethical requests for donations from illegitimate charitable canvassers.
BBB serving Vancouver Island has recently received reports of suspicious individuals knocking on doors late in the evening, claiming to be collecting donations on behalf of legitimate charities. When asked to produce identification solicitors have been unable to, and have quickly moved on.
“The holiday season is the time of year many legitimate charities use to solicit donations for various fundraising campaigns,” says Rosalind Scott, President and CEO of the BBB serving Vancouver Island. “Unfortunately, this is also the time of year that many people are financially desperate themselves, and it is a great season for scammers to play on people’s desire to give and to take advantage of unsuspecting victims.”
This particular charitable scam is only one of many the BBB expects to receive reports about this time of year. You may have also heard recently about the RCMP public warning issued earlier this fall, related to a scam artist going around door-to-door, pretending to be from a well-known charity and claiming to sell gift cards as part of a fundraising campaign. Interested donors were given what looked like a hand held point of sales machine, for credit or debit card payment, and given a receipt. In reality the donors were having their financial account information skimmed off the machine.
“There are literally hundreds of charitable giving scams out there,” says Scott. “The scams themselves may take many different forms, but they all generally tend to contain similar elements.”
Beware of requests for donations that involve:
- Claims that 100 percent of the donation will go to those in need. All charities have fund-raising and administrative costs.
- High-pressure “sales/closing” tactics. Don’t succumb to pressure to give money on the spot. A charity that needs your money today, will welcome it just as much tomorrow.
- Requirements to pay by cash or to have cheques made payable to an individual rather than the organization.Legitimate charities will want to have a paper trail under the organization’s name.
- The use of names that look impressive or that closely resemble the name of a well-known organization.
- Failure of the solicitor to provide you with adequate identification, information or documentation about the charitable cause. Legitimate charities will be able to provide you with contact information, detailed explanations of how your funds will be used, financial statements, annual reports and answers to all your questions.
The key to protecting yourself from charitable giving scams is to take your time and to do your research before you donate to any cause. Most people fall victim to such scams when they give on impulse rather than after careful consideration.Consider the following tips:
- Before you donate to any charity be sure to check out the organization with both the Canadian Revenue Agency and with your BBB. The CRA has a database of registered Canadian charities and the BBB has reports and Business Reviews available on both businesses and charities across North America.
- Do your research to make sure you understand what percentage of your donation will actually go to the cause versus administrative costs. BBB recommends that at least 65 per cent should go towards the intended cause.
- If possible do not give cash. Always make contributions by cheque and make your cheque payable to the charity, not to the individual collecting the donation.
- Keep records of your donations including receipts, canceled cheques and bank statements.
- Be cautious when giving online to unfamiliar charities. Many fraudulent websites are created overnight by scammers after disasters and during the holiday season.