The holidays are a time when generous older adults open their hearts and checkbooks to provide contributions to causes about which they care deeply.
Sadly, it is also a time when scam charities active yearlong go into overdrive to vacuum as many dollars as possible from unsuspecting donors’ pockets. Older adults are targets, and not just because many possess greater financial assets.
“We know scams tend to target the older population, because they may not be aware of some of the online research options that allow them to research charities before they give,” says Gabe Cohen, senior director of marketing and communications with Washington, District of Columbia-based charity information source Guidestar.
“One of the things we’re constantly saying at Guidestar is to be proactive rather than reactive in your giving,” he adds. “Go to Guidestar.org or other non-profit research sites, and do a little research before giving. You need to give with both your head and your heart. Use your heart to pick the cause, the location or the community you want to support. And use your head to find an organization doing the most effective work in that area.”
Another resource for donors is Chicago, Illinois-based CharityWatch.org, whose president and founder Daniel Borochoff is also adamant about the importance of researching charitable organizations before donating.
“Don’t give to organizations that play on your emotions,” he says. “You need to look beyond that and research what those charities are providing. And don’t take it at face value. A charity may say it provides job training, but you need to look beyond that. Is it training that helps the individual get on his feet, or training that ultimately helps the charity?”
Diligent inquiry
Donors can use the Guidestar.org site to search for and locate any one of 1.6 million organizations. If seeking to make a charitable gift to an IRS 501c3 organization, donors can research those organizations in particular.
“Through our non-profit search engine, visitors can search for a particular organization, or try to find a new organization using filters like location, size or cause,” Cohen explains.
Once they’ve drilled down to a specific organization, they can access information about that organization’s finances, operations and perhaps most important, progress it is making toward its mission, Cohen reports. “If you’re a homeless shelter, how many beds did you make available in the last year?” he says. “If you’re a soup kitchen, how many meals did you serve? If you’re an after-school program, how many hours of care did you provide, or how many students did you serve?”
Ultimately, donors should learn as much as possible about ways the charity is making a difference in the world. That may be via exploring average GPA increases of pupils in a tutoring program, or number of homeless for whom a charity found permanent shelter.
“It can be expensive to quantify and measure all these things,” Cohen says. “What you’re looking for is clarity as to how they’re making a difference in the world.”
In that vein, Guidestar.org also helps donors learn about charities’ transparency. “We see a strong correlation between how transparent they are and the difference they are making in the world,” Cohen says. “Transparency is our mission. In order to encourage charities to be transparent, we award Seals of Transparency for organizations based on how much information they update on their Guidestar Non-Profit Profile.”
Approximately 43,000 active non-profit organizations exist in the Chicago area. About 1,000 of them have earned Seals of Transparency. On Guidestar.org, donors can use the criteria “Chicago-area” and “Seals of Transparency” to find those organizations.
The site CharityWatch.org can also help charity-minded individuals give wisely. The organization rates more than 600 charities that solicit funds, Borachoff says.
“We’re most famous for our letter grades,” he adds. “We give letters A+ to F to charities, based on their financial efficiency and accountability. We don’t just pass along information the charity offers. We do a deep dive into their finances to give donors an idea of what happens to their money after they donate.”
In addition to identifying top-rated charities meeting its standards for both governance and accountability, the site offers giving tips, articles and advice. To alert donors to fraudulent charities, CharityWatch.org has a Hall of Shame, reinforcing the fact even well-publicized charities and their officials can be and sometimes are guilty of scams.
“People need to be on guard,” Borochoff says. “I don’t discourage people from giving. But they should know about groups they’re giving to so they don’t unwittingly end up giving to scams and helping elevate charities to future positions in the Hall of Shame.”
Watch for red flags
A number of warning signs can tip off donors that the charity they’re considering is disreputable. One of the most obvious red flags is the demand that a donor give right away. “If anyone pressures you to give immediately instead of doing research first, we would consider that a red flag,” Cohen says.
Borochoff urges donors to be wary of charities that solicit funds on behalf of better known charities. “Don’t give to organizations collecting for well-known charitable organizations,” he says. “Donate directly to groups like the Red Cross.”
Donors also should research whether a charity is audited, and how often. “If they don’t have audits or the audit is delayed, I’m suspicious,” he says. “Do they not want us to know something? If it’s 2017, the most recent audit is from 2015 and they’re not making us aware of what happened in 2016, why are they not disclosing?”
It’s worth restating the key to safe and wise holiday charitable giving is information, Cohen says. “We believe the more information that can be provided to donors and those in the non-profit philanthropic sector, the better educated people will be and therefore the better decisions that will be made,” he says.
