Charity Warning Signs

Not every outstretched hand belongs to a bona fide charity that deserves your dollars. Here are some tips to help you avoid being scammed.

For starters, be wary of aggressiveness or high-pressure tactics. The organization shouldn't be harassing you and urging you for donations. (If they're holding you upside down by your feet and shaking you, that's a bad sign.) Look closely at its name -- some unscrupulous outfits will choose a name extremely close to that of a well-known charity, and some careless readers will be conned. (For example, here are some organizations I just made up: National Lung Association, Proctologists Without Borders, and Uniting Way.)

If they're evading questions you ask, that's also a bad sign. If they've called you, ask for some printed material or their Web address. If they're not forthcoming, and insist on communicating by phone, hold on to your wallet.

Sometimes you'll get called by a charity you know well. You might still be careful, though. Sometimes these organizations hire telemarketing companies to raise money, in which case the telemarketers might be taking a third or more of whatever you donate before passing on what's left to the charity. Ouch.

If you're suspicious about a call, hang up and then look up the charity's number separately. Call and ask whether they authorized the call.

More red flags:

• The charity's address is a P.O. box, not a street address.
• You're thanked (by phone or mail) for a donation you don't remember making.
• Extremely emotional appeals and sob stories.
• You're guaranteed to win a prize if you donate.
• You'll need to make out the check to a person, not an organization. Or you're asked to just use the organization's initials.
• The caller is eager to pick up your donation instead of receiving it by mail.

To learn about some exciting charities, check out our current Foolanthropy drive, where we offer information on five organizations that may knock your socks off. You can still send them some money, if you're so inspired.

Learn about Wise Giving from the Better Business Bureau, and use Guidestar to check out various charities' finances.