Common Charity Scams

The public can be generous with charities and some people will try to take advantage of that generosity.

Charity scams affect us all. They hurt charities who do not get money they are supposed to get. They hurt the beneficiaries who don’t get the services or help they need. They hurt morale of volunteers and employees at the charity. They hurt donors who lose their funds. In some cases they hurt government revenues in that a tax receipt is issued with no charitable benefit and this means we all have to pay higher taxes or get less government services.

Here are some common charity scams that you should be aware of:

You receive an e-mail from a group or person that you have not had a prior relationship making a request for your support. In some cases the group is not legitimate or the person is not as described or the e-mail is phishing for financial information from you. If unsure about an e-mail do not click on any links.

A tax preparer suggests that you can reduce your taxable income by including a tax receipt for a donation that you did not make or for an inflated amount. Don’t participate or the consequences could include jail time. Let CRA know if you ever made such an offer.

A promoter of a complicated scheme involving pharmaceutical donations says that you can invest $1000 and get an official donation receipt for $5000 and thereby you will have made money off your donation/investment. CRA is denying all such claims and charging interest and penalties which can be quite substantial.

A person calls you from a nice sounding organization that supports police, firefighters, kids with cancer or some other nice sounding endeavour. If you have never heard of the organization before, have had no previous affiliation with the organization or it sounds sort of but not exactly like a well known charity, it may or may not be a registered charity, . The person making this unsolicited call may be a third party and may be taking up to 95% of the funds by way of commission or otherwise. It is best to just say no and donate to a charity that you are knowledgeable about and can verify the work that it is doing.

The best way to avoid charity scams is to think about what charities are most important to you, make a list of those charities, do some research and then donate directly to the charities. This is the safest and most efficient way to donate to charity. Do not wait for some person to call you or knock on your door from some charity you have never heard of.