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Scam alert: Earthquake relief

How to make sure you're donating to a legitimate charity

Created date

May 27th, 2015
Earthquake in Nepal
Earthquake in Nepal

On April 25, 2015, a devastating earthquake hit the country of Nepal. Known as the Gorkha earthquake, it measured 7.8 on the Richter scale. The quake left a death toll upwards of 7,000, tens of thousands injured and a country in ruins. There is no question that Nepal is in dire need of aid and many Americans are ready and willing to give what they can to help.

Unfortunately, there are plenty of scammers out there counting on people’s willingness to donate money. They may purport to be collecting funds for Nepalese earthquake relief but, in the end, divert most or all of those funds into their own pockets. 

Before you blindly give away your hard-earned money, do your homework to be sure that you are donating to a legitimate charity. Ask for detailed information about the charity, including name, address, and telephone number. 

If you have been contacted by telephone, ask if the caller is a paid fund-raiser. If they are, ask how much of your donation will go to the charity and how much goes toward paying the fund-raiser. 

Research the name of the organization by doing an online search. Type the organization’s name with the word “complaint” or “scam” in your search and see what turns up. 

Look for long-established groups

Donate to charities you are familiar with. Does the charity have a proven track record when it comes to dealing with disaster relief? Be especially wary of charities that seem to have sprung up overnight. 

Never send cash donations and, above all, never wire money to a charity. If you are asked to wire money, take that as a red flag. Legitimate charities won’t ask people to wire money. Instead, they rely on credit cards and checks for their donations. Wiring money is like sending cash in the mail. Once it leaves your hands, there’s no telling where it’s going or who is going to get it.

If you have any doubt, check the charity out on a website like the Better Business Bureau’s Wise Giving Alliance (give.org), Charity Navigator (charitynavigator.org), Charity Watch (charitywatch.org) or GuideStar (guidestar.org). These sites gather information about thousands of charities, including IRS records and complaints. 

Know the difference between “tax-exempt” and “tax-deductible.” In the United States, there are about 1.5 million tax-exempt organizations and about 1.1 million organizations eligible to receive deductible contributions. Tax-exempt means the organization doesn’t have to pay taxes. Tax-deductible means you can deduct your contribution on your federal income tax return. To make the deduction, your money needs to go to a genuine charity, not a scammer.  

If you believe you’ve been the victim of a charity scam or if a fund-raiser has violated Do Not Call rules, file a complaint with the Federal Trade Commission. Visit FTCcomplaintassistant.gov or call 1-877-382-4357. Your complaints can help detect patterns of wrongdoing and lead to investigations and prosecutions.

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