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Fake Charities Prey on Donors to Make Bank

July 1, 2016

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The relationship between donors and charities is based on trust. Donors trust the organizations they support to fulfill their stated mission and to use their gifts appropriately. They expect the charity to follow both IRS regulations and the law.

The vast majority of charities in the United States do follow these rules. However, a very small number of fraudulent entities and scams undercut the trust given to the social sector by donors. They prey upon the emotions and positive intentions of the public by posing as real charities. They are not registered with the IRS, and many are under investigation for fraud. Because of this, donations to these entities are NOT tax deductible.

These scams are in no way representative of the social sector as a whole, but their actions are damaging to donor trust for all charities. We strongly urge donors to research the legitimacy of organizations they wish to give to. Requesting a charity’s Employee Identification Number (EIN) is a great way to establish that the organization is registered as a 501(c)(3) nonprofit, although we still recommend digging a little deeper to learn more about the organization before deciding it is worthy of your support.

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