Don't Fall for Charity Scams

When you've got some money you'd like to contribute to some worthy causes, it's easy to get confused. There are, after all, so many charitable organizations out there -- according to the National Center for Charitable Statistics, there are more than 1.3 million nonprofit organizations in the United States.

I've written before about how to go about researching contenders for your dollars. Here are a few red flags to you should be aware of, especially among "charities" seeking donations from you:

• Be wary of aggressive, high-pressure tactics. A charity organization shouldn't harass you for donations.
• Look closely at their 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 Organization, Habitat of Humanity, and Uniting Way.)
• Make sure the organization has a physical address. Charities that offer only a P.O. box as their addresses should raise your suspicions.
• Ask questions: Are the answers immediate and clear or evasive? If they called you, ask for printed material or their website address. If anyone insists on communicating only by phone, be suspicious.
• Sometimes you'll be called and asked for donations to a charity you know well -- but still be careful. Some organizations hire telemarketing companies to raise money, in which case the telemarketers might take for themselves a third or more of what you donate before passing on the rest to the charity. Consider contacting the charity on your own and donating directly.

Fool anthropy season
This is a special time of year for us at The Motley Fool. It's our Foolanthropy season, when we band together with our readers and raise money for some inspiring organizations.

This year we're focusing on financial literacy. To learn about some exciting charities, check out our Foolanthropy nook, where we offer information on five organizations that may knock your socks off. If you're so inspired, chip in a few dollars. If every Fool reader chips in just a few bucks, we can easily raise millions. Please click in to learn more.