Whether they are providing supplies to help the victims of a disaster or simply want to support a cause they believe in, Canadians donate to charities each year to help those in need. And while most charities are trustworthy and work hard to provide for the less fortunate, there are dishonest groups of people who prey upon the good intentions of others.
By creating fake charity campaigns or abusing donations, scam artists take advantage of those who want to help. To ensure that your donations directly support your intended cause, it’s important to learn some best practices for avoiding scams and choosing a trustworthy charity.
How to Avoid Charity Scams
Despite the urge to help a cause as soon as possible, it is important to do some research before donating to any charity. Consider the following best practices to ensure that your donations go to a legitimate charity:
- Never wire money to someone who claims to be a charity. Legitimate charities do not ask for wire transfers. Once you wire the money, you’ll probably never get it back.
- Be cautious about bloggers and social media posts that provide charity suggestions. Don’t assume that the person recommending the charity has fully researched the organization’s credibility.
- Donate through a charity’s official website only and never through emails. Scammers have a knack for creating fake email accounts that seem legitimate.
- Ensure that the charity explains on its website how your money will be used.
- Be wary of charities that claim to give 100 per cent of donations to victims. That is often a false claim, as well-structured organizations need to use some of their donations to cover administrative costs. Be sure to review the charity’s financial information, which can often be found online.
- Never offer unnecessary personal information, such as a copy of your driver’s licence. However, it is common for legitimate charities to ask for your mailing address, and it is safe for you to provide it.
- Ask for written information about the charity, including its name, address and telephone number. Legitimate charities will be able to provide you with information about its mission, how your donation will be used and proof that any contribution you make is tax deductible.
- Confirm the charity’s registration information through the Canada Revenue Agency (1-800-267-2384).
- Write cheques to specific charities and not individuals. Whenever possible, avoid providing cash donations as it is not traceable and cannot be cancelled. It’s also important to ensure that your online payments are secure.
- Be wary of organizations that use free emails from Google, Yahoo and similar services, strange phone numbers or names that are similar to popular charities.
- Be cautious when using online donation platforms. For example, GoFundMe is an up-and-coming crowdfunding service that allows people to raise money for a wide variety of circumstances. Despite its popularity, visitors to the site should be cautious about the campaigns to which they donate. Visitors can report suspicious campaigns directly to GoFundMe via its official website.
Above all, it’s important to avoid being forced into donating. Reputable charities will rarely pressure individuals into donating on the spot. If you come across a charity scam, you should report it to your local police department, as well as the Canadian Anti-Fraud Centre.
How to Choose a Charity
Even legitimate charities need to be considered with care. To ensure that your donations are going to a worthy cause, search a list of qualified charities, which can be found on the government of Canada’s website.
Donors can use this database to see if a Canadian charity is registered, revoked, annulled, penalized or suspended. In addition, this service makes it easy to view a charity’s contact information, general activities and financial information. Together, donors can use this tool to help guide their donation decisions.
When choosing a charity it’s also important to consider if your donation will qualify for a tax deduction. In order to qualify, your donation must go to one of the following:
- A registered charity, Canadian amateur athletic association, national arts service organization or municipality
- A housing corporation resident that is registered in Canada and created to offer low-cost housing for the elderly
- A municipal or public body that is registered and performing a function of government in Canada
- The United Nations and agencies affiliated with the United Nations
- Her Majesty in Right of Canada
And what about those “checkout charities” that are becoming more and more prevalent? Here’s how those work:
If you are concerned about how your donations will be used, it’s always a safe bet to choose a reputable, registered charity. Popular choices include the Canadian Cancer Society, World Vision Canada and the Canadian Red Cross. Just be sure to cross-reference these charities with the government of Canada as registration status can change suddenly.
Remember that there are other ways to provide relief that don’t involve monetary donations, especially if you live near an impacted area. Local food banks and blood centres commonly ask for donations during relief efforts.