GIFT OR GRIFT? Ex­am­ples of char­ity scams

How to en­sure this hol­i­day season that you’re giv­ing to char­i­ties, not scam­mers

Chicago Sun-Times (Sunday) - - TOP NEWS - BY ALEXAN­DRIA JA­COB­SON For the Sun-Times

As the owner of a small busi­ness, Crys­tal Krause likes to give back to her com­mu­nity.

So when a sports mar­ket­ing com­pany asked for a char­i­ta­ble con­tri­bu­tion from her busi­ness, Power Moves Yoga in Batavia, to the lo­cal high school, she signed up to spon­sor the foot­ball team, which in­cluded an op­por­tu­nity to ad­ver­tise her yoga stu­dio on T-shirts and cups and re­ceive shout-outs at games.

“Be­ing a lo­cal yoga stu­dio, we vol­un­teer all the time,” says Krause, 34. “We give do­na­tions to all kinds of char­ity events. So to do­nate to the high school just seemed like, well, of course, we will. I didn’t think any­thing of it.”

Af­ter giv­ing more than $1,000, Krause got a low-qual­ity, smeared T-shirt in the mail that in­cluded a wrong phone num­ber for her stu­dio and a logo taken from the busi­ness’s Face­book page.

Un­happy, Krause un­suc­cess­fully tried to reach the spon­sor­ship com­pany. So she called the high school di­rectly and found out the school didn’t re­ceive any of the money and only ac­cepts do­na­tions through its ath­letic boost­ers.

Krause and her hus­band got their money back by dis­put­ing the credit-card charge. But now she thinks twice be­fore do­nat­ing when other fund-rais­ers ask.

“Now, I’m hes­i­tant,” she says. “Now, I have to do more re­search each and ev­ery time and ask for tax-ex­empt forms just be­cause I’m so skep­ti­cal of peo­ple try­ing to scam and just get free ser­vices or free money.”

Amer­i­cans gave more than $400 bil­lion to char­i­ties in 2017, ac­cord­ing to the an­nual Giv­ing USA re­port by the Giv­ing USA Foun­da­tion and In­di­ana Univer­sity’s Lilly Fam­ily School of Phi­lan­thropy.

Scam­mers try to tap into that giv­ing spirit with a va­ri­ety of schemes.

“Peo­ple want to give to vet­er­ans,” says char­i­ta­ble giv­ing ex­pert Sara Na­son, for­merly of Char­ity Nav­i­ga­tor and founder of the con­sult­ing firm Nan­ta­hala Strate­gies. “They want to give to kids who are un­der­funded. They want to help, but of­ten­times they can be taken ad­van­tage of be­cause peo­ple kind of as­sume that ev­ery­one asks for money out of the good­ness of their heart.”

One type of scheme in­volves cre­at­ing char­i­ties with names that are sim­i­lar to wellestab­lished non­prof­its, ac­cord­ing to Char­i­tyWatch. For ex­am­ple, the Amer­i­can Red Cross is not the same as “Red Cross of Amer­i­cas,” a name al­legedly cre­ated by a North Dakota man to pig­gy­back off the fa­mous re­lief or­ga­ni­za­tion. Last March, he was hit with a cease­and-de­sist or­der by of­fi­cials in that state.

In an­other case, four In­di­ana res­i­dents were charged last Fe­bru­ary with steal­ing more than $125,000 through the “Wounded Warrior Foun­da­tion” and “Wounded Warrior Fund,” which sound like the well-known Wounded Warrior Project.

Ex­pert ad­vice

“Peo­ple re­ally need to be care­ful that they’re giv­ing to le­git­i­mate or­ga­ni­za­tions or peo­ple and not just scam­mers,” says Daniel Boro­choff, pres­i­dent of Char­i­tyWatch. “[With] sob sto­ries, peo­ple have to be par­tic­u­larly care­ful . . . They get too emo­tional about want­ing to help, and they don’t think about it.”

Other frauds of­ten show up on crowd­sourc­ing plat­forms, es­pe­cially af­ter nat­u­ral dis­as­ters or tragedies. Scam­mers cre­ate fake sto­ries on sites like GoFundMe, but then the money doesn’t reach peo­ple in need.

Boro­choff ad­vises giv­ing to th­ese on­line cam­paigns only if you know or re­spect the or­ga­niz­ers.

“It’s far bet­ter to give to a non­profit or­ga­ni­za­tion be­cause they have in­ter­nal con­trols,” Boro­choff says. “They have checks and bal­ances. They have a board of di­rec­tors that over­see it.”

Ex­perts say the safest way to give is by check or credit card.

And ex­am­ine your billing state­ments to make sure the char­ity charged the agreedupon do­na­tion and not a re­cur­ring amount.

“If the char­i­ta­ble or­ga­ni­za­tion wants you to pay by gift card or a wire trans­fer, then that’s likely to be a scam,” says Todd Kos­sow, Mid­west re­gional di­rec­tor for the Fed­eral Trade Com­mis­sion.

More tips

Do your re­search. Check out char­i­ties on­line at, Char­i­, Char­i­tyNav­i­ga­ and GuideS­ Glob­alGiv­ re­searches or­ga­ni­za­tions over­seas.

Slow down. Scam­mers of­ten use high­pres­sure tac­tics to get con­sumers to send money quickly.

Ask for the Em­ployer Iden­ti­fi­ca­tion Num­ber, or EIN, and IRS Form 990. Check the EIN at to see if the or­ga­ni­za­tion is a reg­is­tered 501(c)(3) char­ity. The Form 990 shows how the non­profit spends money. Ex­perts say that, at the very least, 65 per­cent should go to­ward pro­grams.

Con­tact the char­ity di­rectly. Make do­na­tions through the char­ity’s web­site or by call­ing its di­rect phone num­ber, rather than giv­ing in re­sponse to a phone or email so­lic­i­ta­tion.

This is the fifth story in the se­ries “Be On Guard,” re­ported by the Chicago Sun-Times and made pos­si­ble through the sup­port of AARP Illi­nois. The AARP Fraud Watch Net­work can help pro­tect you from frauds and scams. Call this free helpline (877) 908-3360 to speak with vol­un­teers trained in fraud coun­sel­ing.

CRYS­TAL KRAUSE, owner, Power Moves Yoga in Batavia


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