The Federal Trade Commission and state and charity regulators announced in July a crackdown on charities that pretend to aid veterans and current service members.
If you’re looking to donate to a charity that helps veterans, current service members and their families, follow these recommendations:
Check out an organization online. Enter the charity’s information with words like “complaint,” “scam,” “report” or “review” to see what others have to say. According to the FTC, you can look up ratings and reports about how charitable organizations spend donations and conduct business on Charity Navigator, Charity Watch and GuideStar.
Look at Form 990. Most tax-exempt organizations and nonexempt charitable trusts must file this form with the IRS. Form 990, Return of Organization Exempt From Income Tax, requires an organization to describe its mission or other significant activities, then disclose financial details on its revenues, expenses, assets and liabilities. By law, tax-exempt status is revoked when an organization does not file required Form 990-series returns or notices annually for three consecutive years. Forms 990, 1023 and 1024 (applications for exemption) are open for public inspection via IRS Form 4506-A.
Use the IRS’s Tax Exempt Organization Search. This online search tool allows users to search for certain information about an exempt organization’s federal tax status and filings. It can tell you if your donation would be tax deductible. Only gifts made to charitable organizations recognized as such by the IRS are deductible. Donations to an individual or individuals are not.
See if a charity is registered with your state charity regulator. Most states require the charity or its fundraiser to register to ask for donations. The National Association of State Charity Officials has a list of state regulators.
Never pay by cash, gift card or wire transfer. Scammers usually ask victims to pay using these means. To be on the safe side, insist on making an in-person payment by check or credit card at an organization’s physical location.
Scammer tactics include:
- Spoofing caller IDs to make calls look like they’re coming from your area code, Washington, D.C., or an organization you know.
- Misusing real pictures and stories of veterans to get you to donate on social media and crowdfunding sites.
- Using names that include words like “hero,” “operation,” “wounded,” “veteran” or “disabled.” (Legitimate charities also use these terms.)
- Claiming that you will win a sweepstakes or prize if you donate, which is against the law.
- Pressuring you to act now or guilting you into giving money.