Charity Scams: How to Donate Safely and Avoid Fraud

Americans are generous, and scammers exploit that generosity deliberately. Fake charities appear within hours of major disasters, using names similar to established organisations and emotional appeals that mirror legitimate fundraising. The FTC reports charity fraud among the top consumer scams by reported incident volume.

How Charity Scams Operate

Fake organisations. A scammer creates a charity with a name similar to a well-known one, "American Cancer Society" becomes "American Cancer Fund," for example. They solicit donations online, by phone, or door-to-door. No money reaches any charitable cause.

Disaster relief fraud. Within hours of a hurricane, earthquake, or mass casualty event, fake charity websites and crowdfunding campaigns appear. They use images from the disaster and promise direct aid to victims.

Phone solicitation fraud. Callers claim to be collecting for a police or firefighter charity, a veterans organisation, or a children's hospital. Some of these operations are legal but misleading, they are for-profit fundraisers that keep 80 to 90 percent of donations and send almost nothing to the stated cause.

Crowdfunding fraud. Fake individuals or families appear on GoFundMe and similar platforms claiming to need help with medical bills, disaster recovery, or personal emergencies.

How to Verify a Charity Before Donating

Check the IRS tax-exempt database: Go to apps.irs.gov/app/eos to confirm the organisation is a registered 501(c)(3). Legitimate charities are listed here.

Check Charity Navigator: CharityNavigator.org rates charities on financial health, accountability, and transparency. Use it to see how much of donations go to programmes versus overhead.

Check Candid/GuideStar: Candid.org provides financial documents and ratings for nonprofits.

Search the name plus "scam" or "complaint." If others have raised concerns, it will surface quickly.

Red Flags in Charity Solicitation

• Pressure to donate immediately before the appeal ends
• Vague descriptions of how money is used
• Requests for cash, wire transfers, gift cards, or cryptocurrency only
• A name closely resembling a well-known charity
• Caller cannot provide the charity's legal name, EIN, or website
• Emotional manipulation without specific information about programmes

Donating Safely After a Disaster

After a major disaster, give to established organisations with a track record in disaster relief rather than newly created funds. Well-established organisations with disaster response infrastructure include the American Red Cross, Direct Relief, and local Community Foundations in the affected area.

If you want to give to a local effort, verify the organisation has a legitimate web presence established before the disaster and check for IRS registration.

Where to Report Charity Fraud