How to spot a phoney charity
In the aftermath of recent global disasters, Canadians can be proud that residents from coast to coast are donating money to charities at an unprecedented rate. Scam artists lurk in the shadows however – and many are ready to take full advantage of the national goodwill by posing as representatives of charities, or soliciting money for fake ones. Often, it is only at the time of filing an income tax report that we realize the charity to which we gave money is not legitimate.
To guard and protect yourself from charity scams, take a look at the guidelines posted on the Canadian Consumer Information Gateway, a federal/provincial/territorial and non-government partnership initiative (ConsumerInformation.ca).
Click on Fraud/Deceptive Practices then link to several sources offering tips on charity fraud including various consumer ministries, the Canadian Revenue Agency (CRA) and regional Better Business Bureaus. CRA provides a list of registered charities for crosschecking and also posts a list of charities whose status has been revoked.
What to do
When you are asked to contribute to a charity, here is a sampling of the course of action the Better siness Bureau suggests:
If solicited by phone, mail, or in person, ask for details about the organization: name, address, telephone number, etc.
Know the difference between “tax exempt” and “tax deductible”. Tax exempt means the organization doesn’t have to pay taxes. Tax deductible means you can deduct the contribution on your federal income tax return. Even though an organization is tax exempt, your contribution may not be tax deductible.
Call the charity. Find out if it is aware of current solicitation and if it has authorized the use of its name.
Ask if the solicitor is a paid fund-raiser and what percentage of the donation the fund-raiser will keep. Look for other options if you are not comfortable with the amount.
Be wary of charities offering to send a courier to collect your donation immediately.
Refuse high-pressure appeals. Legitimate fund-raisers won’t push you to give on the spot.
Watch out for similar sounding names. Some phoney charities use names closely resembling those of respected, legitimate organizations.
Be sure your cash gift cannot be lost or stolen. For security and tax record purposes, it’s best to pay by cheque. Use the official, full name of the charity – not initials – on your cheque.
Complete details on charity fraud, alongside countless topics of consumer concern, can be found on-line at http://www.ConsumerInformation.ca.