You Just Gave Money to Charity, Here's How to Tell if Your Cash is Going to the Right Place

April 20th 2017

Ethan Simon

Twitter users reacted Thursday to a story about a sham charity, which claimed to help veterans, published in a series of tweets by Lachlan Markay, a reporter at the Daily Beast.

However, there's a way to make sure you don't fall victim to a similar fraudulent scheme.

Where was all that spending going? To raise more money, of course.

Markay noted that — assuming Outreach Calling was responsible for 100 percent of the donations, they were making 86 cents on the dollar for their services— a steep price.

And things only got worse from there.

In fact, not very much money, at all, was going to actual veterans.

Even the $6,000, which was mentioned in the tweet above, was headed to a shell company that was doing the exact same scam — paying for telemarketers, pocketing a salary, and little else.

Sham charities are surprisingly common.

Charities claiming to help veterans, the homeless, and even cancer patients have all been found fraudulent. And while it's all well and good to see these phony operations brought to justice after the fact, it would be better to avoid giving them your money in the first place.

It can be hard to tell, sometimes, where your money is actually going. And even if outright scams are at one end of the spectrum, even well-meaning charities can be inefficient.


Here are three things you can do so you can know how much of your money is going to the cause you're donating to:

1) Look up the organization's ratings.

This one is by far the most important. There are a number of sites that you can use to do a little research on the charity to which you're donating. Charity Watch, GuideStar, Charity Navigator, and Give.org (run by the Better Business Bureau) are all recommended by the Federal Trade Commission (FTC). These sites can give you information on the charity in question, and many will even give you a star rating or letter grade for the organization. Just make sure you get the name right — scam charities will often deliberately use names that are similar to more reputable organizations.

2) Watch out for charities that spring up overnight.

After a big natural disaster, or another disastrous event, charities often get to work repairing the damage. But watch out for charities that seem to appear overnight, it could be a scam. And as the FTC writes, "Even if they are legitimate, they probably don’t have the infrastructure to get the donations to the affected area or people."

Homeless Man

3) Don't click on links.

Direct yourself to a charity's website. Don't click through an email to donate, or follow a link on social media. You might be directed to a fake website that looks similar to that of a real charity.

4) Pay with a credit card.

If you've done all your homework, you shouldn't run into any problems at this point. But as ABC News reports, paying with a credit card — as opposed to a check or wire transfer — ensures that you have proper theft protection, should you want to get your money back.

Giving to charity is incredibly noble and fulfilling. Just make sure your money is being spent on the people who need it.