Giving to your favorite charity or nonprofit feels great. But as online giving has become easier than ever, online charity scams have become more prevalent. With only a couple of clicks, you could find yourself giving your hard-earned money or personal information to someone capable of causing considerable damage to your bottom line.
Although there's a learning curve to identifying these scams, with a careful eye you can mitigate your risk. Here are some pointers to help you give online safely and effectively.
Verify where you are giving
It may sound obvious, but make sure to verify any organization or donation site before donating. We recommend verifying 3 different aspects: legitimacy, nonprofit status, and tax-exempt status.
Even if you are donating to a well-known charity or nonprofit, make sure to check the legitimacy of the website hosting the transaction. Scammers often use a common tactic of making a look-alike website that can be a near exact copy of the charity or nonprofit's site. These are typically shared via social media and email. Make sure to look carefully at the URL of any site you are giving money on to confirm it's legitimate and not a fake look-alike. The URL can be difficult for scammers to fake.
Additionally, it's a good idea to verify the nonprofit status of any organization you're donating to. Anyone who donates their money wants to ensure that those funds are being used responsibly, and that there could be a tax benefit (if it applies). There are great independent resources you can use to verify nonprofits, including GuideStar a database of over 1.8 million nonprofit organizations that summarizes each one's mission, programs, and financials. Because not all nonprofits are eligible to receive tax-deductible contributions, you can use the IRS Tax Exempt Organization Search tool to verify their tax-exempt status. Fidelity Charitable has content dedicated to helping you research charities, with additional information on how to evaluate a charity, and more tools and resources to make the most of your charitable dollars.
Be careful how you choose to pay
Online payment platforms vary greatly from site to site, but we came up with a few tips to help ensure your safety when transferring money for a donation.
Make sure you're on a secure website. Some browsers indicate a secure website with a small lock symbol near the URL, and some don't, but either way secure sites are identified as “https://” before the website URL. Secure websites encrypt your data on their site, which further protects your information against cybercrime.
Consider paying by credit card, not debit card. Credit cards often have different liability standards than debit cards. If your personal information is stolen, using a credit card may offer some additional protection compared to using a debit card. Scammers will often prompt you to donate by a gift card or money wire. Be skeptical if a charity or nonprofit asks for payment in either of these 2 forms.
Keep good records. Once you've donated, keep a copy of the confirmation screen and any emailed or mailed confirmation you receive for your donation. If you don't receive any confirmation, call the charity or nonprofit to inquire. It can be wise to keep both a digital and paper copy of any donation confirmation or receipts for your records, and for when you're doing your taxes, if it applies. Note: For donations of $250 or more, the IRS specifies that you must obtain "contemporaneous written acknowledgment" of the contribution, meaning it must be received no later than the date you file your taxes for the year the contribution was made.
Protect your digital footprint
Before entering personal or financial information on any website, we suggest searching for and reading its privacy policy. Reading the fine print can help you understand if your personal information, or even your credit card number, will be used for any other purposes, or even if information like your email address will be sold to other companies.
Also, be mindful of vendors and third-party payment companies within a nonprofit's website that may have different privacy policies than the nonprofit itself. Be especially careful with links to payment sites from pop-ups, social media, or email, particularly when they directly prompt you to enter personal information.
Finally, remember when in doubt, it's always a good idea to double-check that where you're donating is legitimate, and not a scam. To help make the most of your money when donating, consider visiting Fidelity Charitable.