Don’t fall victim to charity fraud!

There are plenty of people who will take advantage of the goodness of your heart. The U.S. is abuzz with news about cancer charities that embezzled over $187 million worth of funds which were earmarked for cancer care. Sadly, “the charities spent about 97% of donations they received either on private fundraisers or themselves. Only 3%… went to help actual cancer patients”. Closer to home, disaster-relief provider Goonj.. discovered that an entity not affiliated with them was collecting money and material using Goonj..’s name. In a different case, In Defense of Animals was surprised to find photos of their work being used by others.

On the street, you may have been accosted by individuals who claim to be working with NGOs. They show you patient or student details, medicines required or more. Hearing stories of people’s difficulties always puts us in a spot – how many of us can just walk away after hearing that a helpless 3 year-old needs a life-saving surgery? Yet are you sure that the cause you are opening your wallet for, is genuine? Do follow these steps to avoid falling victim to fraud:

  • What’s in a name? Ask for the name of the organisation and look it up for yourself. As in the case of the US charity fraud, fraudsters adopt names that sound similar to legitimate well-recognised NGOs, and there’s nothing to stop them from claiming details of programmes as well. Every NGO will have a formally registered name mentioned on their website or elsewhere online. Ensure that the entity is original. Consider calling the listed number and speaking to someone in the organisation.
  • Ask for details: Check if the organisation has a 12A and/or an 80G certificate. A 12A certificate exempts the NGO’s income from tax because of the charitable nature of its activities. An 80G certificate means that you can claim tax benefits for your donation. Watch out for NGOs that can’t offer you the 80G certificate, and can’t explain why. NGOs offer a receipt for your donation, be wary if you are being solicited for a donation without a receipt.
  • Where is the money going? This is another important question to ask, especially if you are giving cash donations. Earnest volunteers may assure you that they are going directly to the beneficiary, but it could be very easy to route the money elsewhere. Find out about the organisation’s work – does it match what is stated by the telemarketers/fundraisers.
  • Check an NGO’s financial history: HelpYourNGO has standardised the financial reports of over 550 NGOs, presented in an easy-to-read format. Use our website to see how much of an NGOs’ income is spent on beneficiaries. Anything above 70% is a healthy number. Similarly, you can check whether an NGO spends large sums of money on fundraising activities like telemarketing at the cost of beneficiaries.
  • Check the NGO’s Financial Score: Our financial score represents an organisation’s financial efficiency and sustainability. What is the strength of the NGO’s balance sheet? What are the sources of income? How has the organisation’s growth been in the past few years? The Financial Score presents this information in a simple rating.

We want to make sure your money goes to organisations who will spend it in the most productive way. As we always say, don’t forget to evaluate before you donate!