Be Wary of Charity Fraud Associated with the Ukraine Crisis

The devastating news coming out of Ukraine has led many Americans to contribute to humanitarian relief charities and collection drives in recent weeks. But with such a rise in high-profile donations also comes an increase in charity fraud attempts. Alloy Silverstein and the New Jersey Society of CPAs (NJCPA) warn well-meaning taxpayers to protect themselves by being wary of who exactly they are contributing to.

Is the organization legitimate?

Taking the time to research charities can help donors make certain that their donations are being used for the intended purpose.

The first step is determining whether the charity is a Sec. 501(c)(3) not-for-profit organization. The IRS’s exempt organization search can assist with that. You can also search for a charity via the New Jersey Division of Consumer Affairs.

The GuideStar and Charity Navigator websites offer additional information. GuideStar provides access to recent IRS Form 990, Return of Organization Exempt From Income Tax, filings, which can be used to gauge how much a not-for-profit spends on programs.

Charity Navigator and other organizations rate charities on a number of criteria, but if you’re researching this carefully, it’s worth a careful check of their methodology to make sure you know what the ratings are based on.

Be careful of phishing attempts

Experts advise that money should never be donated over the phone, links in email solicitations should not be clicked, and high-pressure tactics seeking to get you to pay immediately are a sign of danger.

Additional fraud protection tips

Other tips include:

• Slow down. You don’t have to give immediately. It’s worth repeating that doing some upfront research can potentially spare you headaches down the road.
• Make sure you’re visiting the correct website when donating. . Again, GuideStar and Charity Navigator can help. Double check any URL before you click. Or, rather than clicking on a link, it would be wise to go to a reputable site to get the URL and then type it in manually.
• Know who’s asking. Don’t assume a request to donate is legitimate because a friend posted it on social media. Your friend might not personally know the charity or how it spends money.
• Don’t pay with cash or a debit card. A credit card provides more security.
• After donating, check your accounts regularly. Look for any suspicious activity or unauthorized charges and set up notifications, through your bank or a banking app, that will track your credit card transactions and alert you to account activity.

What happens if you think you are a victim of a charity scam?

If you believe you are the victim of a scam, contact your financial institution to put a hold on your credit card and notify the attorney general in your state, then file a complaint with the FBI’s Internet Crime Complaint Center, https://ic3.gov. You can also turn to an Alloy Silverstein Accountant and Advisor to discuss your Identity Theft Defense options.

Further Reading:

• Avoid Falling Victim to a Charity Scam
• Dirty Dozen: Be Aware of the Most Popular Tax Scams
• Tips to Keep Your Parents Safe from Scams
• Beware of Coronavirus Scams
• COVID-19 Schemes and Scams

For more information on types of fraud and what to look out for, check out Alloy Silverstein’s Fraud Prevention resources.

Content provided by the NJCPA.