Consumer Corner: Be wary of charity scams during times of humanitarian crisis

From the Desk of Kansas Attorney General Derek Schmidt. We all have been touched in some manner by the events unfolding across the globe in recent weeks and the level of human suffering. From Hurricane Ida to an earthquake in Haiti to the evacuation of thousands in war-torn Afghanistan and the struggles of some of our nation’s veterans, the needs of those less fortunate are apparent. And while we all would like to give generously to ease their pain, it is important to exercise caution when calls for help arrive by phone, email or text.

Our office has seen all too often the tricks that scammers and fraudsters play on generous Kansans, asking for a contribution that purports to be going to help those who have lost their homes and belongings, or who are in need of food and medical supplies. Recently, our attorneys assisted with shutting down some scammers based in Michigan, purporting to be fundraising in support of homeless veterans, children with autism, victims of house fires and breast cancer patients, and getting the funds in the hands of the bona fide organizations doing that work.

Here are some tips to help you give safely:

  • Support local, established charities. While there are many large, international organizations that do great work, your donations can often have a greater impact when they support a cause close to your community, where you can see the results of your donations.
  • Watch out for names that sound alike. Scammers often make their organizations’ names sound very similar to other well-known charities.
  • Be careful with telemarketers requesting contributions. Oftentimes, the telemarketer keeps a substantial portion of the donation. If you have questions about a solicitation, don’t be afraid to reach out to the charity directly.
  • Ask questions to find out where your donations go. Ask for written information, including how much of the money raised is actually used for charitable purposes and how much will end up in the hands of the professional fundraiser.
  • Ask if your donation is tax deductible. Not all donations to charities are tax deductible. You can check a charity’s status with the IRS at www.irs.gov. When in doubt, double-check with your tax preparer before assuming a donation will be tax deductible.
  • Document your donation. Make the donation by credit card or check – not cash, wire transfer or gift card. A solicitor that asks for payment by wire transfer or gift card is a red flag for scams. If something doesn’t feel right to you, consider donating to a different cause. If you pay by check, make the check payable directly to the charitable organization, not to the fundraiser soliciting the donation. Ask for a receipt to show the amount of the donation and if you specified your donation toward a specific project.

The safest way for Kansans to avoid charities fraud is to take control of their own charitable giving. Rather than responding to solicitations for money that arrive by telephone, in the mail, by email or otherwise, Kansans who wish to support charitable causes should develop their own proactive giving plan and give directly to the charities of their choice. Not only can this help avoid fraudsters but it also eliminates the costs charged by professional fundraisers, instead ensuring every penny of a contribution goes to the charitable purpose itself rather than fundraising expenses. In addition, giving to well-established local charities can maximize the benefit of each contribution and help avoid scams.

The Kansas Charitable Organizations and Solicitations Act (KCOSA) requires most charitable organizations to register with the state prior to soliciting. Examples of those exempt from registration include religious organizations, fraternal, patriotic, social, educational, alumni organizations and historical societies. Professional fund raisers and solicitors working for the charitable organization also must register. Consumers can call (785) 296-3751 or visit the charities registration page at www.ag.ks.gov/charities to check whether a charity is registered.

The Office of the Attorney General is responsible for enforcement of the KCOSA and protecting consumers from fraudulent charitable and solicitation activities. More information on staying safe from scams is available on the attorney general’s consumer protection website at www.InYourCornerKansas.org. If you suspect a charity scam or fraud, or any other violation of charitable solicitation laws, you can file a complaint with our Consumer Protection Division online at the aforementioned website or by calling (800) 432-2310.

Fraudulent charity shut down in Kansas, ordered to pay damages

A Georgia man and his Kansas charity have been banned from doing business in Kansas and ordered to pay more than $11,000 in damages for violating the Kansas Charitable Organizations and Solicitations Act, Attorney General Derek Schmidt said today.

Steven Beck of Ludowici, Georgia, and A Ride for the Wounded, Inc., a Kansas charity, were permanently banned from doing business in Kansas. Shawnee County District Court Judge Thomas Luedke this week approved a default judgment after Beck and the charity failed to respond to a lawsuit filed by Schmidt’s office.

Luedke ordered Beck and the charity to pay $11,029.05 for funds that were used for personal expenses in violation of the Kansas Charitable Organizations and Solicitations Act.

Schmidt urged Kansans to do their homework when donating to charities and offered the following tips to keep in mind when making charitable contributions:

  • Ask for written information, including how much of the money raised is actually used for charitable purposes and how much will end up in the hands of the professional fundraiser.
  • Be careful with telemarketers requesting contributions – oftentimes the telemarketer keeps a substantial portion of the donation.
  • Do not be pressured into making a contribution or pledge.
  • Do not feel obligated to send a donation to charities that send token gifts such as key chains, greeting cards, mailing labels, etc.
  • Make certain the charitable organization actually serves the need it claims to serve.
  • Ask for financial statements of the organization to determine who will benefit from the donations.
  • Make a personal giving plan and support well established charities on your terms, not in response to marketing solicitations.
  • Check out the charity at www.kscharitycheck.org to assess whether it is registered to solicit in Kansas and to see important aspects of its financial filings, including how much of any money you give will be spent on the charity’s overhead expenses rather than going to support the charitable purpose, such as disaster-relief efforts. However, note that some charities are exempt by law from registration.