FTC FACTS for Consumers

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Helping Family and Friends

Avoid Charity Fraud

C harities perform so many vital services in our communities. And in today’s tough economy, many charities are dealing with a variety of ups and downs: increases in 

the demand for service, and decreases in funding, to name just two. To meet their challenges, 

many are asking for bigger contributions, asking for contributions more often, and looking for a 

bigger pool of donors. In addition, legitimate charities are facing competition from fraudsters who 

either solicit for bogus charities or aren’t entirely honest about how the so-called charity will use 

contributions. 

The Warning Signs of a Charity Scam

How can you tell whether someone you care about is the target of a charity scam — or whether 

you are yourself? The Federal Trade Commission, the nation’s consumer protection agency, 

suggests that donors should avoid any charity or fundraiser that:

•	 refuses to provide written information about its identity, its mission, its costs, and how the 

donation will be used;

•	 will not provide proof that a contribution is tax deductible;

•	 uses a name that closely resembles that of a better-known, reputable organization;

•	 thanks a potential donor for a pledge the person doesn’t remember making;

•	 asks a potential contributor for bank account or credit card information before the person has 

reviewed the organization’s information and agreed to contribute;

•	 uses high-pressure tactics to secure a donation before the potential donor has had a chance to 

make an informed decision about giving;

•	 asks for donations in cash;

•	 offers to send a courier or overnight delivery service to collect the donation immediately;

•	 guarantees sweepstakes winnings in exchange for a contribution. 
Facts for Consumers 

Charity Checklist

Consider the following precautions to ensure 

that your donation dollars benefit the people 

and organizations you want to help. They’re 

good practices — whether you’re contacted 

by an organization’s employees, volunteers or 

professional fundraisers — and whether they 

solicit donations by phone, mail, online, or in 

person.

Be wary of charities that spring up 

overnight in connection with current events 

and natural disasters. They may make a 

compelling case for your money, but as a 

practical matter, they probably don’t have 

the infrastructure to get the donations to the 

affected area or people. 

Ask for written information about the 

charity, including name, address, and 

telephone number. 

Check to see if the charity or fundraiser 

must be registered in your state by 

contacting the office that regulates charitable 

organizations and charitable solicitations. 

If so, check to see if the company you’re 

talking to is registered. For a list of state 

offices, visit the National Association of 

State Charity Officials at 

www.nasconet.org/agencies. Your state 

office also can verify how much of your 

donation goes to the charity, and how 

much goes to fundraising and management 

expenses. You also can check out charities 

with the Better Business Bureau’s (BBB) 

Wise Giving Alliance 

(www.bbb.org/charity) and GuideStar 

(www.guidestar.org). 

Don’t be shy about asking who wants your 

money. Some charities hire professional 

fundraisers for large-scale mailings, 

telephone drives, and other solicitations, 

rather than their own staff or volunteers. 

They use a portion of the donations to pay 

the fundraiser’s fees. If you’re solicited 

for a donation, ask if the caller is a paid 

fundraiser, who they work for, and the 

percentage of your donation that will go to 

the charity and to the fundraiser. If you don’t 

get a clear answer — or if you don’t like the 

answer you get — consider donating to a 

different organization.

Call the charity. Find out if the organization 

is aware of the solicitation and has authorized 

the use of its name. If not, you may be 

dealing with a scam artist. 

Watch out for similar sounding names.

Some phony charities use names that closely 

resemble those of respected, legitimate 

organizations. If you notice a small 

difference from the name of the charity you 

intend to deal with, call the organization you 

know to check it out. 

Make a note on your desk or wall calendar 

when you donate. That way, when a 

fundraiser contacts you again, you’ll have 

easy access to the date of your last donation. 

Trust your gut — and check your records 

— if you have any doubt about whether 

you’ve made a pledge or a contribution.

Callers may try to trick you by thanking you 

for a pledge you didn’t make. If you don’t 

remember making the donation or don’t have 

a record of your pledge, resist the pressure to 

give. 

Be cautious of promises of guaranteed 

sweepstakes winnings in exchange for a 

contribution. According to U.S. law, you 

never have to give a donation to be eligible 

to win a sweepstakes.

Be wary of charities offering to send a 

courier or overnight delivery service to 

collect your donation immediately. 

Discuss the donation with a trusted family 

member or friend before committing the 

funds. 
Facts for Consumers

Know the difference between “tax exempt” 

and “tax deductible.” Tax exempt means 

the organization doesn’t have to pay taxes. 

Tax deductible means you can deduct your 

contribution on your federal income tax 

return. 

Do not send or give cash donations. Cash 

can be lost or stolen. For security and tax 

record purposes, it’s best to pay by check — 

made payable to the charity, not the solicitor.

Checking Up

You can help a friend or family member locate 

legitimate charities by checking out the following 

organizations. They are good sources of free 

information about charities you may want to 

support. 

BBB Wise Giving Alliance

4200 Wilson Boulevard, Suite 800

Arlington, VA 22203

(703) 276-0100

www.bbb.org/charity

American Institute of Philanthropy

P.O. Box 578460

Chicago, IL 60657

(773) 529-2300 

www.charitywatch.org

Charity Navigator

1200 MacArthur Boulevard 

Mahwah, NJ 07430 

(201) 818-1288 

www.charitynavigator.org

GuideStar

4801 Courthouse Street, Suite 220

Williamsburg, VA 23188

(757) 229-4631

www.guidestar.org

For More Information and Complaints

To learn more about making charitable donations 

count, visit www.ftc.gov/charityfraud.

If you believe an organization may not be 

operating for charitable purposes, or is making 

misleading solicitations, contact your state 

Attorney General (www.naag.org) or your local 

consumer protection agency 

(www.consumeraction.gov). You can get the 

phone numbers for these organizations in your 

phone book, through directory assistance, or 

through Web directories.

You also may file a complaint with the Federal 

Trade Commission. The FTC works for the 

consumer to prevent fraudulent, deceptive, and 

unfair business practices in the marketplace and to 

provide information to help consumers spot, stop, 

and avoid them. To file a complaint or to get

free information on consumer issues, visit 

ftc.gov or call toll-free, 1-877-FTC-HELP 

(1-877-382-4357); TTY: 1-866-653-4261. 

The FTC enters consumer complaints into the 

Consumer Sentinel Network, a secure online 

database and investigative tool used by hundreds 

of civil and criminal law enforcement agencies in 

the U.S. and abroad. 
Facts for Consumers

1-877-FTC-HELP FOR THE CONSUMER

FEDERAL TRADE COMMISSION ftc.gov

May 2009

Federal Trade Commission

Bureau of Consumer Protection

Division of Consumer and Business Education

The Federal Trade Commission (FTC) is the nation’s consumer protection agency.

Here are some tips from the FTC to help you be a more savvy consumer.

1. Know who you’re dealing with. Do business only with companies that clearly 

provide their name, street address, and phone number.

2. Protect your personal information. Share credit card or other personal 

information only when buying from a company you know and trust. 

3. Take your time. Resist the urge to “act now.” Most any offer that’s good today 

will be good tomorrow, too. 

4. Rate the risks. Every potentially high-profit investment is a high-risk 

investment. That means you could lose your investment — all of it. 

5. Read the small print. Get all promises in writing and read all paperwork before 

making any payments or signing any contracts. Pay special attention to the small 

print. 

6. “Free” means free. Throw out any offer that says you have to pay to get a 

gift or a “free” gift. If something is free or a gift, you don’t have to pay for it. 

Period. 

7. Report fraud. If you think you’ve been a victim of fraud, report it. It’s one way 

to get even with a scam artist who cheated you. By reporting your complaint to 

1-877-FTC-HELP or ftc.gov, you are providing important information to help 

law enforcement officials track down scam artists and stop them!