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Giving Back: Avoid Scams and Make Your Dollars Count

Jul 24, 2020 4 min read Donna Freedman

Key Takeaways

  • Before you donate, investigate! Choose charities wisely.
  • Give directly, rather than to a professional fundraiser.
  • Beware of scams on social media and crowdfunding platforms.


Whenever a natural disaster strikes, it reminds us of how much we have to be thankful for: our homes, our livelihoods, our families. And often that gratitude takes the form of wanting to help. Post-hurricane and post-earthquake pictures and videos break your heart: grieving families, ruined homes, abandoned pets. You want to DO something!

The first “something” you might want to do? Your homework.

It's so easy to respond to a phone call, email or social media request for donations. But it's also potentially frustrating and maybe even dangerous. In the aftermath of a disaster — or during an ongoing crisis like the COVID-19 pandemic — scammers and bogus charities come out of the woodwork. People's hearts are touched by the needs of others, making them anxious to help — and crooks are counting on that.



That’s why it's important to do your due diligence on any relief efforts you choose to support. Suppose that a charity you chose is actually a scam? Not only did your hard-earned money not go where it's needed, but you've also handed over your credit card info to a bunch of thieves.

Colleen Tressler, a consumer education specialist for the Federal Trade Commission, notes that some charities let you designate a specific relief effort. But you should always donate to known groups with a proven track record. That can be especially hard when the need seems urgent — scams have soared during the coronavirus Opens in new window, with fraudsters peddling fake cures and gouging on masks and cleaning supplies. But even when they’re caught, Tressler notes, “scammers don’t take a break.”

Charitable giving experts suggest giving directly to a reputable relief agency rather than responding to a telephone solicitation. These are likely conducted by paid fundraising agencies, which keep a piece of your donation. (Some charge up to 50% in fees, the FTC reports.) Instead, call your preferred agency directly or go to its website to give.


Due diligence, made easier

Not sure about an organization? Start by doing an online search of its name and the word “scam," “complaint,” “review” or “rating.” (If nothing pops up, that doesn't necessarily mean the group is on the level. It could be that the scam is just getting started, or that no one has reported it to authorities.)

Besides, a charity with little online background isn't always fraudulent. It could simply be a new group that formed in response to a specific crisis. Think long and hard before sending money, though; the FTC notes that such groups might be well-intentioned but lack the infrastructure to be effective.

Another way to vet a relief agency is through sites like Charity Navigator (charitynavigator.org) and CharityWatch (charitywatch.org). These groups collect info on humanitarian groups, including their actual impact on communities and how much money goes to fundraising and salaries.


Give generously, give joyously — but, above all, give carefully.


Some of these organizations provide regular updates on relief efforts in hurricane- and earthquake-stricken regions, along with suggestions on where your dollars will do the most good.

You can also visit the website of the National Voluntary Organizations Active in Disaster (nvoad.org), a coalition of groups that help after catastrophic events. Some are well-known organizations like the Red Cross; many are affiliated with religious groups or with specific causes (for example, animal welfare).


Other red flags

As noted, your money will go the furthest if you donate directly to an agency vs. through a third party. The FTC Opens in new window also suggests avoiding:

  • A group that uses a name very similar to a well-known organization.
  • Any organization that won't provide detailed information on its mission, its costs and how your donation will be used.
  • An agency that won't provide proof that your contribution is tax deductible.
  • Any group that asks for cash or requests that you wire money.
  • A fundraiser who pressures you heavily to donate right away.

When you're contacted by phone by a group you're not familiar with, try this script: “I don't donate over the phone. But if you'll give me your organization's website or send me an information packet, I'll consider sending money."

If the caller still pressures you, try using this reply: “I've told you what I need in order to give, and now I am hanging up." Incidentally, when you get a call like this you can also simply say, “I've already given what I can afford to this relief effort. Goodbye."


High-tech scams

Social media and email have made it easier than ever to give — which can actually be a problem. That includes crowdfunding platforms like GoFundMe and Kickstarter. The national office of the Better Business Bureau reports “dubious" appeals in the wake of recent natural disasters. During 2017’s Hurricane Harvey, for example, Washington Post personal finance columnist Michelle Singletary noted that one family’s dramatic televised rescue resulted in “multiple" GoFundMe pages being created. Only one of them, however, was legit: the page created by the family itself.1

Donation through text messaging is easy, and many national relief efforts accept money this way. Keep in mind that some of your money will go toward processing fees, and that it can take up to 120 days for the funds to arrive. If you do decide to donate via text, the FTC suggests confirming the number with the charity before hitting “send."

A wonderful thing about the U.S. is how willing its residents are to reach out to those affected by disaster. Expressing our gratitude by being generous to others is part of who we are as a nation. It's great to be a part of that.

But be sure to make your dollars count by having them go where the need is real, rather than into the pocket of some scammer. Not only when a natural disaster strikes, but also in the weeks (or even months) of recovery that follow, give generously, give joyously — but, above all, give carefully.


What you can do next

It's natural to want to do something for others when we have so much to be thankful for. Once you've identified those you want to help, do your homework — starting at the FTC Opens in new window — to see which charities will apply your dollars wisely and well.


Veteran personal finance writer Donna Freedman authors the “Your Playbook For Tough Times" series. She has been a staff writer for MSN Money and Get Rich Slowly; currently she writes for Money Talks News, among others, and blogs about money and midlife.


1Michelle Singletary, “Don’t be fooled by Hurricane Harvey flood scams,” The Washington Post, Aug. 29, 2017


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