Markets Wired

The holiday season is a time for giving – especially to those in need – and many charities are hard at work this time of year. The Federal Trade Commission, the nation’s consumer protection agency, offers the following tips to help you make the most of your charitable donations this season:

• Donate to recognized charities with a history. Charities that spring up overnight in connection with a recent natural disaster or news story may disappear just as quickly with your donation. Even if the charity is well-meaning, it may lack the infrastructure to provide much assistance.
• Be wary of charities with names that are similar to the names of well-known organizations. Some phony charities use names that sound or look like those of respected, legitimate organizations to gain your trust.
• Give directly to the charity, not to paid solicitors who contact you on the charity’s behalf. Some charities hire professional fundraisers, who then keep a portion of the money they collect. That leaves less money for charitable work. Ask whether the person is a paid fund-raiser and, if so, what percentage of your donation goes to the charity. If you’re not comfortable with the amount, you may consider donating to a different organization or sending your gift directly to the charity.
• Don’t give out personal or financial information – including your Social Security number or credit card and bank account numbers – to anyone who solicits a contribution from you. Scam artists can use this information to commit fraud against you.
• Check out the charity before you donate. You can look it up at charity-rating sites, such as the Better Business Bureau’s Wise Giving Alliance at www.give.org, www.charitynavigator.org, www.charitywatch.org, or www.guidestar.org, but keep in mind that many small or local charities may not be included.
• Don’t give or send cash. For security and tax record purposes, contribute by check or credit card. Write the official name of the charity on your check. You can contribute safely online through many official charity Web sites. Look for signs that the site is secure – such as a closed padlock on the browser’s status bar – before you enter any personal information. When you are asked to provide payment information, the Web site URL should change from http to shttp or https, which indicates that the transaction is encrypted or secure.
• Ask for identification and written information when you’re approached in person. Written materials could include the name, address, and telephone number of the organization, and information about the charity’s mission, how your donation will be used, and proof that your contribution is tax-deductible. When in doubt, call the charity to make sure it is aware of the solicitation and has authorized the use of its name.

Copies of the documents mentioned in this release are available from the FTC’s Web site at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Call toll-free: 1-877-FTC-HELP.