Debt Free

Donations – Look Before You Leap, or Give Even One Red Cent!

You work hard for your money, and many of you like to give back by donating some of your earnings to charity. That's one area where Americans can be legitimately proud. According to the organization Giving USA, Americans donated over $260B to charity in 2005. A huge number to be sure, and an increase of over 6% from 2004, so we're getting even more generous at a level that outpaced inflation. Where's the problem? For many there's no problem, but some of your money went to line the pockets of some rather shady individuals, instead of helping those whom you intended. Nothing brings the hucksters out of the woodwork like a major disaster ala Hurricane Katrina or the SE Asia Tidal wave of 2004.

How can you be sure that the money you're giving to help legitimate charities or disaster victims is actually helping those in need and not buying the latest from Delta Marine for some scam artist? The easiest way is to only give your money directly to the charity itself. Make sure it's a recognized, national or international charity. Mail (how quaint!) the donation directly to them or donate on their website. If giving on the website, type in their URL directly into your browser's address bar, instead of clicking on a link. This is especially true with regards to email links. Don't trust email links. They are a favorite weapon of scammers worldwide. If you're unsure of how to give money to help specific disaster or terrorist attack victims do some checking first.

Major charities such as the Bill and Melinda Gates Foundation are well known for carefully scrutinizing the recipients of their donations, so these types of charities are safe if you just want to give a donation to a general charity and let them distribute it as they see fit. Others such as Mercy Corps and the Red Cross are well known for ensuring that the money gets to where it's supposed to.

What about giving money through your church? That can be fine, but churches are notorious targets of scam artists and swindlers. See this recent article in the Washington Post 

There was a famous case a few years ago where some enterprising young gamblers sold $21M worth of non-existent cars (at a great discount!) to parishioners. The cars were supposedly part of a large estate of a wealthy car collector. I even had one offered to me as a gift. I never got to go pick it out and then found out why. It was never there. Church goers have been scammed for years, either by criminal pastors directly (remember the Bakkers?), or by thieves that first con the pastors, who then get donations from the congregation. You may think it can't happen at your church, but it's estimated that between 1998 and 2001, over $2B (source:Christianity Today, “The Fraud Buster,” January 2005 )was taken in church related cons.

The bottom line is: You worked hard for your money. If you've gotten to the point where you feel you should give something back, bravo! You just need to be sure your money goes where you point it.