At a time when charities seek year-end contributions, scams can interrupt good giving plans and deprive legitimate organizations of needed funds. To protect Ohioans this holiday season, Ohio Attorney General Mike DeWine, the Better Business Bureau, and the Ohio Association of Nonprofit Associations are offering guidelines to help charities, businesses, and donors avoid scams.
“We know many Ohio families will make charitable contributions in the coming weeks, and we encourage them to do so,” Attorney General DeWine said. “We also want to help ensure that their donations end up in the right hands. Too often con artists deprive legitimate charities of needed funds. Awareness and prevention are critical.”
“Take the time necessary to research charities before giving to ensure that your generous contributions are going to trustworthy organizations,” said Kip Morse, CEO of the Better Business Bureau Serving Central Ohio.
“Ohio nonprofit organizations are dedicated to the public good; their work improves lives, strengthens communities and the economy, and lightens the burdens of government, taxpayers, and society as a whole,” said OANO Executive Director Marcy Williams. “During this time of giving, once you select the cause or causes that you want to support, find out what organizations address these needs the most efficiently. Charity rating sites such as Charity Navigator, Guidestar and the BBB's Give.org can help. And you should also consult the ‘Research Charities’ information on the Attorney General’s website.”
Charities throughout the country use the last month of the year to seek support from potential donors. They use letters, online appeals, phone calls, in-person requests, and other methods to solicit contributions. Efforts such as “Giving Tuesday” (the Tuesday after Thanksgiving) encourage donors to give to charities amid the holiday shopping season.
At the same time, scammers compete for these contributions. Con artists pose as reputable charities and collect donations. They claim the money will support a good cause, but ultimately they keep it for themselves. In other cases, charity volunteers or employees steal funds from their organizations.
Charities, businesses, and donors all have a role in detecting and curbing charitable fraud. Here are guidelines that can help.
For charities:
- Review board governance and fiscal practices. Board members can help protect the integrity and resources of charitable organizations. For a refresher on the legal obligations of board members and tips for deterring fraud, review the Ohio Attorney General’s “Guide for Charity Board Members” and “Avoiding Theft in Your Nonprofit” publications. Also consider signing up for a board governance webinar.
- Beware of scams. Some con artists target charities and try to convince them to send money. In one ploy, a scammer poses as a donor who “accidently” sends a check for too much money. The donor asks the charity to send back the extra amount using a wire-transfer service before the charity finds out the check is bogus. In another scam, a con artist poses as a charity’s utility company, demands immediate payment, and threatens to shut off the charity’s power if it refuses to pay.
- Report questionable activity. Whether you discover potential problems outside of your organization or within it, report questionable activity to the Ohio Attorney General’s Office. For self-reported problems, the Ohio Attorney General’s Office provides a Leniency Policy for charities and other organizations that disclose violations of certain laws at an early stage.
For businesses:
- Set a policy for handling charitable requests. Many businesses partner with charities to promote their causes. For example, a retailer may allow a group to set up a donation table near a store’s entrance. This is a generous act that can greatly assist a charity. Unfortunately, some groups that collect contributions this way are shams. To protect your business and your customers, establish a plan for handling charitable requests in advance so you can be prepared to evaluate and respond to requests.
- Get details. Ask a charity to complete a basic approval form before allowing the group to ask customers for donations. (A sample approval form can be found in the Ohio Attorney General’s “Charitable Guide for Businesses.”) Once the group has submitted the form, independently verify the information it has provided. Check with the Ohio Attorney General’s Office, IRS, Better Business Bureau Wise Giving Alliance, and other resources. Also contact local charity leaders. Ask if they are familiar with the group. If your search turns up negative information or no information at all, think twice before granting approval to the group.
- Report scams. Contact the Ohio Attorney General’s Office if you suspect a scam or questionable charitable activity. File a complaint online or by phone at 800-282-0515.
For donors:
- Develop a giving plan. A well-planned approach eliminates the pressure of making quick decisions. Identify organizations that appeal to you and stick to your plan. Respond to unexpected or unwanted requests by explaining that you already have a giving plan. Invite other groups to provide you with written information so you can evaluate their requests.
- Research charities. Find out if an organization is registered with the Ohio Attorney General’s Office, verify its tax-exempt status with the IRS’s Exempt Organizations Select Check, and gather data from the Better Business Bureau Wise Giving Alliance. View the organization’s IRS Form 990 on Guidestar. Review program descriptions, expenses, compensation levels, and other details. Conduct a basic Internet search to review a group’s accomplishments or questionable activity. Contact the organization itself and find out how your donation will be used. Get information in writing. Compare the charity’s materials with information you gather from other sources.
- Watch for red flags. Be wary of high-pressure tactics, requests for checks made out to an individual (instead of a charity), and people who are unable or unwilling to answer questions about their charity. Don’t provide your credit card number or other personal information to callers who contact you unexpectedly.
Additional guidance can be found on the Ohio Attorney General’s website.
The Ohio Attorney General’s Charitable Law Section provides oversight to make sure donations are not misappropriated and that charitable proceeds are used for charitable purposes.
Concerns about a potential sham charity or questionable fundraising activities should be reported to the Ohio Attorney General’s Office at www.OhioAttorneyGeneral.gov or 800-282-0515.