(WTNH) — If you are looking to help those impacted by the raging wildfires in Australia, it’s important to avoid fake charity scams. Luke Frey with the Better Business Bureau shares his advice.
Investigate before you consider a crowdfunding donation. Some crowdfunding platforms do a better job of vetting postings and projects than others, and they typically also charge various processing fees that may reduce donation amounts. Check to see who is behind the crowdfunding appeal and consider whether that person or group might legitimately represent the named charitable cause. Also, see if the posting is claiming to be helping a specific individual/family/group or whether it claims to be passing on funds to a designated charity or charities. If a charity is named, consider making a direct donation to that organization rather than relying on a third party to carry out your giving intentions.
How funds will be used. Vague descriptions of how the collected funds will be used should be a yellow caution light. For example, will the funds be used for firefighting activities, temporary housing for displaced families, food, medical expenses, reconstruction, or other relief activities? Thoughtful requests for funding will identify genuine disaster needs and response abilities, and communicate clearly about intended donation uses and plans for funding distributions.
Don’t assume pictures are used with permission. Unfortunately, some crowdfunding postings may be using pictures of victims without the permission of their families. As a result, you can’t assume the poster has an official connection. Again, each site has different rules on what they allow. As a donor, it is up to you to approach with caution, especially after a disaster or tragedy.
Your contribution may not be deductible as a charitable gift. If a crowdfunding posting or a charitable appeal is claiming to be helping a specific named individual or family, donors in the U.S. generally cannot take a federal income tax deduction, even if the individual or family is in need. On the other hand, if you are giving to a charitable organization that is helping a group of needy individuals and you are not restricting your gift to a specific person, then you can generally take a deduction. Keep in mind, if the charity is not located in the U.S., in most cases a gift would not be deductible even though a charity is receiving the contribution. See IRS Publication 526, page 6, for more information on this subject.