Giving to charitable organizations is a meaningful way to support causes you care about. Unfortunately, scammers often take advantage of people’s generosity by creating fake charities or using misleading donation schemes.
The IRS reminds taxpayers to be cautious when making charitable contributions and to take steps to ensure their donations are going to legitimate organizations.
This is especially important when donating after a disaster, during a time of crisis, or when a cause receives increased public attention.
How to Avoid Fake Charity Scams
One common scam involves fraudsters creating fake charities to collect money and personal information from well-intentioned donors.
Before making a donation, consider these steps:
• Verify that the organization is a qualified tax-exempt organization. The IRS provides a Tax Exempt Organization Search tool that allows donors to confirm whether an organization is eligible to receive tax-deductible contributions.
• Be cautious when someone asks you to donate directly to an individual. Donations made to individuals generally are not considered charitable contributions for tax purposes.
• Keep receipts and documentation for all donations, including cash contributions and donated goods.
Taking a few extra steps before donating can help protect your money and ensure your support reaches the organization you intended to help.
Be Careful With Non-Cash Donations
Some charitable contribution scams involve donated property or goods.
The IRS warns taxpayers to be cautious of schemes involving inflated valuations of donated items, including art, property, or other assets. Some schemes may promise large tax benefits by overstating the value of donated property.
If you donate goods or property:
• Keep detailed records of what you donated.
• Document the fair market value accurately.
• Avoid any arrangement that promises to eliminate or dramatically reduce your tax liability through questionable donation practices.
Accurate records help protect you and ensure your charitable contributions are properly documented.
How to Report a Suspected Scam
If you believe you have encountered a charitable donation scam or another type of tax-related fraud, you can report it to the IRS.
The IRS provides a way to submit suspected tax fraud, scams, identity theft, and other tax-related concerns through its reporting tools.
If you believe your personal information has been compromised, take steps to protect your identity and financial accounts.
Supporting Penny Forward
At Penny Forward, we believe financial education and independence should be accessible to everyone, including people who are blind or have low vision.
Penny Forward is a 501(c)(3) federal tax-exempt organization dedicated to helping people who are blind or have low vision build financial skills, confidence, and independence.
Now, more than ever, Penny Forward needs your support.
Your donation helps us continue providing financial education, resources, and community support to people who need them.
When you donate, you can feel confident knowing you are supporting a verified nonprofit organization working to improve financial independence for the blind and low-vision community.
Penny Forward’s Bottom Line
Charitable giving can make a meaningful difference, but it is important to make sure your donations are going to legitimate organizations.
Before giving:
• Verify the organization.
• Keep donation records.
• Be cautious of promises that seem too good to be true.
• Support organizations whose missions align with the causes you care about.
By staying informed, you can protect yourself from scams while continuing to support the organizations making a difference.
Leave a Reply