How to tell if a charity is legitimate, responsible, and trustworthy

Photo of a charity box. Image Credit: Steven Depolo, via Flickr/CC.

“For the Poor Charity Box Basilica of St. Adelbert Grand Rapids.” Image Credit: Steven Depolo, via Flickr/CC.

Wanting to help people in your community and to make the world a better place is an admirable goal. Though finding the right charity to support can be challenging. Beyond finding a charity that is doing work that you feel is relevant and meaningful, you now have to consider if the charity is legitimate or not.

Charity fraud is a growing problem

The opportunity for bad people to commit charity fraud has increased along with the growth of the Internet. Misuse of charitable donations occurs on both large and small scales.

A New York couple will serve two to six years in prison and pay a $1.5 million (U.S.) fine for falsification of business records for their fake Coalition for Breast Cancer Cures charity. Donations were used by the couple for trips to Las Vegas and Amsterdam, purchasing expensive name brand merchandise, and payment of their daughter’s sorority dues.

The Chicago AIDS awareness organization Working for Togetherness spent more than $45,000 of public funds on a luxury SUV.

Checklist for finding a trustworthy charity

There are five simple things you can do to avoid becoming a victim of charity fraud.

  1. Get informed: familiarize yourself with the charity standards and regulations by reading the Internal Revenue Service’s Life Cycle of an Exempt Organization and the Better Business Bureau’s Standards for Charity Accountability.
  2. Test your fraud awareness: federal law enforcement and an industry task force use LooksTooGoodToBeTrue.com to provide tips, share victim stories, and to enable the public to become more informed about Internet fraud.
  3. Research the charity: verify that the charity is listed on the Better Business Bureau’s National Charity Report Index or purchase a copy of the Charity Rating Guide from the American Institute of Philanthropy. Review the GuideStar database to verify that the organization is a legitimate non-profit.
  4. Check for electronic scams: the Federal Bureau of Investigation provides information to the public about current e-scams and warnings.
  5. Trust your instincts: if you feel uncomfortable or uncertain after having done research on the organization, then select other charitable organization to work with.

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