Donating to a cause should feel rewarding, knowing your money is going to make a real difference. But what happens when a fundraiser misleads you about how your donation will be spent? Unfortunately, this happens more than you might think.
In a recent FTC investigation, Kars-R-Us.com, Inc. (“Kars”) raised millions of dollars for a supposed breast cancer charity, only for less than 1% of the funds to go toward the cause it promised to support. Between 2017 and 2022, Kars raised $45.5 million, claiming that all proceeds would fund United Breast Cancer Foundation (UBCF) screenings. However, the FTC reports that UBCF spent less than 1% of that amount on breast cancer screenings.
This is a reminder to always verify the legitimacy of charities before donating. Below, we outline practical steps you can take to ensure your generosity goes toward the cause it was intended for.
How to Protect Yourself from Charity Scams
Before clicking “donate,” here are some ways to verify that your contribution will be put to good use:
1. Research the Charity
Start by researching the charity’s name along with terms like “scam,” “review,” or “complaint.” You can use websites like Charity Navigator or GuideStar to verify whether the charity is legitimate and transparent about its finances.
Be extra cautious if the charity is listed on crowdfunding platforms, as these can sometimes be the breeding grounds for fraudulent campaigns. Always confirm the organization’s details before giving.
2. Choose Safe Payment Methods
When making a donation, opt for secure payment methods like credit cards or checks. These methods offer better protection and a trail of documentation should something go wrong.
Avoid any charity that pressures you to pay via:
- Cryptocurrency
Wire transfers
Gift cards
Cash appsThese payment methods are major red flags, as they are often used by scammers because they’re difficult to trace and nearly impossible to reverse.
3. Review the Charity’s Website
A legitimate charity should provide detailed, clear information about:
Its mission
How donations are used
Annual reports and financial statements
If the charity’s website lacks transparency or doesn’t provide any concrete information about how donations are spent, consider this a major red flag. A trustworthy charity will be transparent with its supporters.
