When disaster strikes, it’s natural to desire helping those affected, especially when it hits home. Last year’s natural disasters tugged at many hearts. A record-breaking three hurricanes--Harvey, Irma, and Maria--brought devastation to Texas, Florida, Puerto Rico, and the U.S. Virgin Islands in August and September. The government approved over $50 billion in disaster relief, yet soon afterward, California experienced the Thomas wildfire that became the state’s largest fire in modern history.
By the end of the year, disaster damages totaled $306 billion, making 2017 the most expensive year for natural catastrophes in the U.S. Disaster relief first responders from FEMA, AmeriCorps, and the Coast Guard, along with well-known charities including the Salvation Army and American Red Cross, joined efforts in preparing shelters, distributing food, and providing cleanup services to affected areas. Many compassionate citizens volunteered alongside them, and those who couldn’t donate their labor sought to donate monetarily.
Rise of Scammers
However, fraud is prevalent where there is human generosity and urgent need. Scammers take advantage of natural disasters. Well-intentioned people are vulnerable to their appeals for funds and are more likely to make emotionally-driven decisions. Nowadays, anyone can easily create a crowdfunding account online to raise money. GoFundMe and Facebook pages are commonly used to spread the word and solicit funds. Many scammers use these platforms to create fake organizations with names similar to those of popular, legitimate charities. They develop a social media following and appear realistic. In these cases, when people are eager and willing to donate money, they send money through popular easy-to-use apps such as PayPal without thoroughly investigating the charity and its background. Scam charities promise to provide disaster relief, but never follow through with their promises, using the monetary donations for personal gain instead.
Some scammers have been able to successfully run their phony charities for years. In a yearlong investigation to identify America’s 50 worst charities, the Tampa Bay Times and The Center for Investigative Reporting (CIR) discovered numerous charities that passed through less than 4% of their donations to their cause. One outfit, the Kids Wish Network, was listed as the worst charity in America. According to CNN, the Kids Wish Network has spent less than three cents per dollar donation on helping children over the past decade. The majority of its funds were, instead, paid to its corporate staff and professional fundraisers.
Charity Fraud Prevention
Fortunately, there are several consumer protection agencies that monitor and verify charities, helping consumers find legitimate, reputable organizations. The Federal Trade Commission (FTC) is a government agency and a trusted online source that provides consumers with information about charitable corporations and identifies those that are deceptive and fraudulent. The FTC also enables consumers to report scams and file complaints about questionable business activities on its website. The BBB Wise Giving Alliance is another helpful resource for consumers. As part of the Better Business Bureau, this agency produces reports on national charities and helps donors make informed decisions about their giving. Consumers can search for accredited charities on the BBB Wise Giving Alliance website, where they can also read reviews and file complaints.
Warning Signs of Fraudulent Charities
Assessing charities is not an easy task. On the one hand, donating to older, larger, more well-established groups can be a good strategy to prevent money from getting into the hands of unscrupulous opportunists. But on the other hand, there are also many small and unknown groups that spring up immediately after disasters that are more agile, responsive, and efficient than the larger, more bureaucratic charities. This makes the process of figuring out where a donation will do the most good difficult.
Keep in mind that not all charities have a strong digital presence. While many people rule out the smaller, unfamiliar organizations, many local and newly-founded charities, especially those created during a recent natural disaster, may not have as many followers or mentions online. Some may not have a digital presence at all. To help avoid fraud charities, here a few signs to look out for:
- Groups that lack a digital presence (a website and social media pages) and have no activity online;
- Charities that request donations be made by mailing cash or via wire transfers;
- Outfits with names that are similar to those of well-known charities; and
- Organizations that don’t present sufficient information about who they are, what they do, and how they use donations.
Once you’ve zeroed in on one or more organizations to donate to, it’s a good idea to do some online research. The Internal Revenue Service’s irs.gov site can confirm an organization’s 501(c)(3) status. Call the charities and speak with a representative about their history, teams, and services. Give.org, Charity Navigator, and GuideStar are excellent private analysts of charities and other non-profits. Last, but not least, ask around. Word of mouth is still an effective way to learn about local non-profits and fundraisers and receive ideas and feedback from trusted associates such as friends, neighbors, and co-workers.
Thankfully, there are many legitimate organizations that do an excellent job of helping those in need. Here at ConsumersAdvocate.org, we know this firsthand. We’re headquartered in Puerto Rico, so last year’s hurricanes literally hit home for us. Our team helped raise over $80,000 using YouCaring.com and donated to local charities we knew and supported, such as Unidos Por Utuados and Por Los Nuestros. Both of these charities worked selflessly to distribute water filters and solar lighting systems to families throughout Puerto Rico.
Our company was confident that our donations were in good hands and were utilized honestly and effectively. And for those who are interested in coming to Puerto Rico themselves to help out with the ongoing relief effort, we created a list of the best volunteer opportunities in Puerto Rico, all of which are reputable, trustworthy charities and disaster relief organizations with the experience to prove it.
“To know even one life has breathed easier because you have lived. This is to have succeeded.”
~Ralph Waldo Emerson