Magid: ‘Tis season of online giving, but watch out for scams

The period between Thanksgiving and New Year’s eve is a time
of giving. One reason is, of course, the holiday spirit. Another is
that many charities reach out during this period, beginning on
“Giving Tuesday” — the day after Cyber Monday. Another
reason, for many taxpayers, is that it’s the last chance to get a
tax deduction by giving to a federally recognized tax-exempt
non-profit.

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A family affair

For families, consider getting everyone involved. Your children
may not know the name of a good charity to support, but they may
have a cause or interest that is promoted by a legitimate charity
that you can research together.

If your kids are old enough to do online research, have them
help you vet the charities to make sure they’re using your money
wisely. You might want to divide your donation budget into smaller
chunks and give to more than one charity or you might want to
encourage your children to donate some of their own money to raise
money for a charity through something like a bake sale.

You can also donate and raise money via social media, subject to
the cautions below. I’ve been supporting my friends’ Facebook
fundraising campaigns. Even if it’s a small amount, not only does
it help, but it also shows your support for the charity and your
friends’ efforts.

There are some very good causes that advocate political action
which are not tax-exempt. That doesn’t mean they’re not worth
giving to, but you won’t get a tax deduction. Donations to
political candidates or parties are also not deductible. As with
charities, if you do donate to a political cause, do some research
to make sure it’s doing work that you feel good about.

An alternative to charitable giving is to invest in microfinance
through a service like Kiva. When you invest, what you’re doing
is loaning money to an entrepreneur or group of entrepreneurs,
typically in a developing country. The borrower will pay back the
loan over time and usually pay interest to support Kiva’s local
field partners, however neither Kiva nor individual lenders receive
any interest. Still, Kiva points out that it has a 96.9 percent
repayment rate so “when you’re repaid you can use the money
again.” I like giving children Kiva gift cards (in increments of
$25) so that they can decide where to invest the money, knowing
that they’ll later be able to use it for college or some other
purpose after it’s been repaid.

Legitimacy

You will undoubtedly get a lot of pitches via email but, before
you donate, make sure they are from a legitimate charity and be
very careful before clicking on any links in email or a social
media post. It’s safer to type in the name of the charity
directly. One possible exception is Facebook’s Donate button. If
a friend is raising money for a nonprofit on Facebook, you can
safely donate as long as you are sure that you support the charity
listed. Do be careful about the amount. Sometimes it will default
to a specific amount so, if you’re not comfortable donating that
sum, click on a different amount or enter the number yourself.

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Safe Donation Tips

  • Donate only to organizations you know and trust and do some
    research. Make sure you know the charity’s purpose and consider
    taking a look at financial records, including the percentage of its
    budget that goes into fundraising. CharityNavigator.org and GuideStar.org have
    information on nearly every federally recognized charity. There is
    also Give.org and CharityWatch.org, that rate many but
    not all charities. All federally tax-exempt nonprofits must file a
    public tax return called a “990.” You can sometimes find these
    forms on CharityNavigator or GuideStar or can do a search with the
    name of the charity followed by 990.
  • Make sure the donation is going to the right charity. Scammers
    can use a similar name or cause that you assume to be a legitimate
    charity.
  • Don’t be pressured by telemarketers. You may get calls during
    the holiday season asking for a donation. There is a good chance
    that a substantial portion of that donation will go to the
    telemarketing company. If you are told that the money is going to a
    local agency, such as a hospital, animal shelter or program of a
    police or fire department, check with the agency before donating
    and consider donating directly to that agency.
  • Be very cautious before donating based on a link in an email
    or social media post. It could be a scam or even take you to a
    website that looks like a legitimate charity. It’s best to go
    directly to the charity’s website. Look at the web address
    carefully to make sure it is the site of the real charity.
  • Guard your personal information. Never give out your Social
    Security number to a charity. They don’t need it. Be sure
    you’re dealing with a legitimate charity before giving out your
    credit or debit card information or your name and address. Look for
    the organization’s privacy policy to see if it shares its donor
    lists.
  • Never donate cash, by wire transfer or gift cards: Legitimate
    charities will accept credit or debit cards, payment services like
    PayPal or allow you to pay via Facebook. Credit and debit cards
    come with some fraud protection.

And thank you in advance for your generosity this holiday
season.

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Larry Magid is a tech journalist and internet safety
activist.

Source: FS – All – Interesting – News 2
Magid: ‘Tis season of online giving, but watch out for scams