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Charity or Cheat? Giving During Coronavirus

By Ashleigh, K-Staff

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This article was original published in February 2020.

Puerto Rico. California. Florida. Australia.

What do all these places have in common? They’ve all experienced a disaster or event that prompted an outpouring of donations and an influx of charity involvement in the recovery efforts. In the age of coronavirus, need is all around us. Closures have resulted in record unemployment, failed business, and unprecedented challenges in every corner of the country and the globe. Charities that have traditionally relied on annual walks and other fundraising events are facing a crisis, rapidly attempting to bring their fundraising efforts online—digital giving is the name of the game in 2020.

And there’s no question as to the willingness of people to give. In 2017, Hurricane Harvey became the second-costliest storm on record in the United States, causing an estimated $125 billion in damages. In the three months following the storm, at least $1.07 billion is estimated to have been donated to U.S. nonprofit organizations in response, according to a study by the Indiana University Lilly Family School of Philanthropy and the Center for Disaster Philanthropy. More than 30 percent of U.S. households made a disaster-related donation in 2017 through a variety of sources.

Image from U.S. Household Disaster Giving Report, Indiana University Lilly Family School of Philanthropy and the Center for Disaster Philanthropy. https://www.issuelab.org/resources/34757/34757.pdf

Hurricane Harvey relief workers hand out supplies. Photo courtesy of michelmond / Shutterstock.com

Give directly to reputable organizations
Well-established organizations are the most experienced in working with disaster relief and After a disaster, donations tend to explode. In fact, most donations are made in the first six weeks following a disaster and have all but tapered off six months later. The first few weeks after a disaster, especially one with high-profile news coverage, are prime season for fraudsters who capitalize on the disaster and peoples’ desire to make a difference by posing as a charity organization.

In August of 2019, as Hurricane Dorian approached the shores of Florida, the BBB Wise Giving Alliance and the Better Business Bureau offered advice on how to make the most of your donation in the face of a disaster and how to spot a fraudulent attempt to divert donations.  They often have strong local ties and will know how to work together with other agencies as well as governments.

Watch for look-alike charities
It’s not uncommon for organizations to pop up in an attempt to collect a portion of a massive volume of donations being made in the wake of a disaster. Many fraudulent organizations will create names that are similar to legitimate organizations. And even new, legitimate charities may be well-intentioned but not well-positioned to help immediately. Check with Give.org for a list of credible charities assisting with recovery efforts or with the IRS’ Tax-Exempt Organization Search to make sure you’re dealing with a legitimate organization.

Understand crowdfunding
The explosion of online crowdfunding—the collecting of money for a project or venture by raising many small amounts of money from a large number of people—has made it very easy for fraudsters to cash in after a disaster. If you’re going to donate via a crowdfund, it’s best to make sure you know the owner personally. The person running the crowdfunding campaign isn’t necessarily the person who you want your money ending up with, and you’re trusting that they’ll follow through on their promises.

Beware direct requests for money
If you’re contacted by someone you don’t know on social media or via e-mail in a direct request for donation funds, you should hear alarm bells in your mind. Legitimate organizations that you aren’t already affiliated with will likely not reach out to you directly to request help. Be even more concerned if that person is requesting gift cards or P2P payments (Apple Pay, Paypal, etc.) Likewise, do not click on links in unsolicited e-mails requesting donations. DO NOT give out personal financial information to anyone who solicits a contribution.

Do not send cash
A cash donation is a bad idea. Leave a paper trail for tax and security purposes by using a check or credit card to make a donation. If something goes wrong, you have avenues you can follow with your card company and documentation of the amount and where it was supposed to go. Checks have to be cashed somewhere. When you hand over cash or gift cards, the trail ends—and if you’ve given your donation to a fraudster, you have no path for recourse.

Report suspected fraud
If you receive an e-mail requesting donations and suspect it may be fraudulent, report it to the IRS.

These types of scams are not limited to disasters or charities: scammers often impersonate political organizations as well, purportedly seeking donations for a candidate or a cause.
We know the desire to help is nearly overwhelming in the days and months following a disaster. And with coronavirus pandemic causing a record need for charitable assistance, opportunities to help abound. By being aware of the dos and don’ts of donation, you’ll be able to avoid fraudsters and make sure your donation provides the maximum amount of relief in the right hands.

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