BBB Warns of Charity Scams / Offers Giving Tips in Wake of Boston Marathon Bombing

In light of recent tragic events in Boston, the Better Business Bureau (BBB) created a news release offering advice to help people differentiate between real charities and lowly scammers. As BBB members ourselves, (Better Business Bureau of Mississippi), we feel this information could be helpful to our readers. With BBB permission we have therefore included this release.

Arlington, VA – April 16, 2013 – At least one poorly-conceived charity scam has already emerged in the wake of the explosions at the finish line of the Boston Marathon yesterday, and more are likely. BBB Wise Giving Alliance (“Alliance”), the national charity monitoring arm of the Better Business Bureau, and BBB Serving Eastern Massachusetts, Maine, Rhode Island and Vermont (“BBB Boston”) cautions donors about potential red flags concerning tragedy-related philanthropy.

“Tragedies inspire people to give,” said H. Art Taylor, president and CEO of the Alliance, “but, tragedies – whether natural disasters or manmade catastrophes – also inspire scammers to take advantage of that generosity. Social media, in particular, makes it very easy to reach a lot of people quickly, when emotions are running high and people feel the need to take action, any action, to help.”

BBB Wise Giving Alliance urges donors to give thoughtfully and avoid those seeking to take advantage of the generosity of others:

BBB Wise Giving Alliance: Ten Tips for Giving with Confidence

1. Thoughtful Giving

Take the time to check out the charity to avoid wasting your generosity by donating to a questionable or poorly managed effort. The first request for a donation may not be the best choice. Be proactive and find trusted charities that are providing assistance.

2. Help Spread the Wise Giving Word

Remind your friends and family to be cautious about giving requests in the wake of such a tragedy and ask them to spread the word as well. People are emotionally moved by events like these and may react before they have time to carefully consider.

3. State Government Registration

About 40 of the 50 states require charities to register with a state government agency (usually a division of the State Attorney General’s office) before they solicit for charitable gifts. If the charity is not registered, that may be a significant red flag.

4. Respecting Victims and Their Families

Organizations raising funds should get permission from the families to use either the names of the victims and/or any photographs of them. Some charities raising funds for the Colorado movie theater and Newton school victims did not do this and were the subject of criticism from victims’ families.

5. How Will Donations Be Used?

Watch out for vague appeals that don’t identify the intended use of funds. For example, how will the donations help victims’ families? Also, unless told otherwise, donors will assume that funds collected quickly in the wake of a tragedy will be spent just as quickly. See if the appeal identifies when the collected funds will be used.

6. What if a Family Sets Up Its Own Assistance Fund?

Some families may decide to set up their own assistance funds. Be mindful that such funds may not be set up as charities. Also, make sure that collected monies are received and administered by a third party such as a bank, CPA or lawyer. This will help provide oversight and ensure the collected funds are used appropriately (e.g., paying for funeral costs, counseling, and other tragedy-related needs.)

7. Online Cautions

Never click on links to charities on unfamiliar websites or in texts or emails. These may take you to a lookalike website where you will be asked to provide personal financial information or to click on something that downloads harmful malware into your computer. Don’t assume that charity recommendations on Facebook, blogs or other social media have already been vetted.

8. Financial Transparency

After funds are raised for a tragedy, it is even more important for organizations to provide an accounting of how funds were spent. Transparent organizations will post this information on their websites so that anyone can find out and not have to wait until the audited financial statements are available sometime in the future.

9. Newly Created or Established Organizations

This is a personal giving choice, but an established charity will more likely have the experience to quickly address the circumstances and have a track record that can be evaluated. A newly formed organization may be well-meaning but will be difficult to check out and may not be well managed.

10. Tax Deductibility

Not all organizations collecting funds to assist this tragedy are tax exempt as charities under section 501(c)(3) of the Internal Revenue Code. Donors can support these other entities but keep this in mind if they want to take a deduction for federal income tax purposes. In addition, contributions that are donor-restricted to help a specific individual/family are not deductible as charitable donations, even if the recipient organization is a charity.

Other Resources:

BBB Wise Giving Alliance is asking anyone who receives a suspicious charitable solicitation to report it to BBB Report a Scam.

The FBI has the lead investigative role following the bombing. Anyone who has information, visual images and/or details regarding the explosions should call 1-800-CALL-FBI (800-225-5324), prompt #3. The FBI says no piece of information or detail is too small.

The American Red Cross says it has enough blood and financial resources committed to Boston at this time, but asks that people make appointments to give blood in the weeks and months ahead.

Boston Mayor Thomas M. Menino offers the Mayor’s 24-Hour Hotline at 617-635-4500 for anyone with concerns about their family members or friends who were at the race.

The Mayor’s office also suggested resources from the National Association of School Psychologists to help children deal with tragedies.