As we move through October, we are getting closer to the season of giving when many of us look to give back after a year of success. While there are endless charities individuals and businesses can give to, each of us also needs to take proper precautions to make sure we are protecting ourselves while looking to do good for others.
Scammers and bad actors are always looking for a quick buck so you’ll want to ensure you’re dealing with legitimate charities. Here are a few tips from the cybersecurity professionals at ORAM Corporate Advisors for keeping yourself and your business safe as you give to others during the upcoming giving season.
Tip Number 1: Stick to Websites You Know and Trust
When you are “shopping” for a charity to give back to this year, stick to giving on websites that you know and trust. While you may be tempted to click on links in emails requesting donations, don’t do it! Clicking on links in emails soliciting donations can end up with your computer, systems, or network being hacked.
Unless you’re familiar with the charity and know the sender, don’t click links until you look up the charity online and make a call. If you’ve never heard of a charity before, be sure to do your homework before giving any funds. Visit a charity online before giving financial details. Look at their social media sites and ensure that the organization’s website has an SSL certificate, which means that they have an added layer of security where you intend to give donations. You can tell if a website has an SSL certificate because there will be an HTTPS in front of the web address rather than just HTTP.
Tip Number 2: Check Your Charity Before Giving
Fake charities are easy to set up. Avoid being victimized by Grinches this giving season by doing some easy research before you make any donation. The Federal Trade Commission (FTC) strongly recommends checking with organizations such as the BBB Wise Giving Alliance, Charity Navigator, CharityWatch, or GuideStar before you make any charitable donation. These consumer organizations will help you best understand how much of a charity’s donations go towards their mission versus expenses and overhead costs.
Additionally, after you identify a charity you wish to give to, do a search adding the organization’s name with words such as “complaints,” “reviews,” “fraud,” and “scam.” If you find more than one or two negative reviews, it may be best to find another charity. Additionally, does the organization’s website explain how it uses donations? Is it open about what percentage of donations go toward its mission? If there is no detailed information about a charity’s mission and programs on the website, find another place to donate your hard-earned money.
Some states also require that charities register with a state charity regulator. You can find a list of state charity regulation divisions on the National Association of State Charity Officials website. Charities must also register with the Internal Revenue Service (IRS). If they’re not, then donations made to them will not be eligible for tax deductions. You can search for a charitable organization using the Tax Exempt Organization Search tool at irs.gov. If a charity is legitimate, it will have an Employer Identification Number (EIN) and most charities will post this information on their website. If a charity fails to register with the IRS each year, its tax-exempt status will be automatically revoked after a period of time.
Tip Number 3: Make a Call
When in doubt about the legitimacy of a charity, pick up the phone. A simple phone call will help you verify whether an organization is the real deal. If you can find a phone number online, you can call and ask questions about the charity such as what its mission is and what percentage of donations actually are applied to achieving that mission.
If you receive a call asking for a donation, be sure to ask questions. What is the charity’s exact name, web address, and mailing address? How much of the donation goes directly to the program you’re wanting to support? Ask if the funds are being used for a charity or for a political action committee (PAC)? Also, inquire as to whether your donation is completely tax-deductible and ask for the organization’s EIN. Double-check it online with the IRS to check for the legitimacy of the organization before giving over any financial information.
Tip Number 4: Enjoy the Tax Deduction
Though it’s the season of giving when most donations are made, you will want to make the most of your donation by enjoying the tax deduction. This is true for individuals and businesses alike. Be sure that when you make a donation, it is to a legitimate, nonprofit, 501(c) 3 organization so you can enjoy the tax deduction. If you donate to an individual person, you won’t see that benefit.
You’ll also want to check with your certified public accountant before you make donations to find out what you are able to give and deduct from your tax liability. Your tax professional can tell you exactly what you can write off as a tax deduction as an individual and what you can deduct as a business each year.
Finally, be sure to get a receipt for your donation. Any legitimate charitable nonprofit will provide you with a receipt for your taxes. Be sure to ask about a receipt before making the donation to ensure you will get one with the organization’s EIN as your tax prep professional will need it.
Tip Number 5: Signs Something Isn’t Quite Right
There are red flags that an organization may not be on the up and up. If you receive a phone call soliciting a donation before 8 a.m. or after 9 p.m., something isn’t right. The caller must also tell you the name of the charity they are calling on behalf of and must tell you if they are calling to seek a donation. Charities are also not allowed to use robocalls or prerecorded messages unless you are already a member of the charity or have made a previous donation.
The charity must also be truthful about the fundraiser’s connection to the charity (i.e. if they are a volunteer, staff member, or paid caller). They also must tell you the mission of the charity, whether donations are tax-deductible, and how the donation must be used. Finally, the caller must also be honest about its affiliation with the government such as if they have an EIN or not. Be sure to ask plenty of questions.
If a charity asks you to make a donation via wire transfer using companies such as Western Union or MoneyGram, this should also raise suspicion. The same is true if you’re asked to make a donation by purchasing gift cards and sending the charity the codes from the gift cards. Thieves like these methods of payment as they are difficult to track. Never pay through these methods. Also, be suspicious if they insist that you make a donation using cryptocurrency as it is likely a scam.
Other signs that something may not be right are if the charity tries to rush you into making a donation, your caller ID doesn’t show who is calling, or if the organization pushes sentimental claims to get you to donate. If someone guarantees you’ll win something in exchange for a donation, it’s a scam. Finally, if your gut tells you something isn’t right, listen to it and don’t make a donation.
Please feel free to share this blog with friends, family, and colleagues as well as on your social media. It might help save someone from being scammed or getting hacked. It might even just save your own business! If you have questions about cybersecurity best practices, contact ORAM Corporate Advisors today at (617) 933-5060.