Beware of scams
You’re hanging holiday decorations in your home when the phone rings. A friendly voice explains that he’s with the local police association, and asks for a donation to send neighbourhood kids to the circus, an outing it organizes each Christmas. Filled with yuletide generosity, you contribute $50.
Most of us have received a phone call like this. And more than a few of have been scammed.
“I can just about guarantee that kids will not be going to see a circus just because you gave these guys money,” says Douglas Boufford, a certified fraud examiner and chartered accountant in Kingston, Ont. He explains that callers claiming to be with police or fire organizations often deceive generous Canadians by using deceptive names. He recalls one caller who said he was with “the OPP,” which anyone in Ontario would associate with the provincial police force. “It probably stood for Other People’s Pockets,” he jokes.
Supporting good causes shouldn’t make you paranoid, but it’s worth being cautious; by taking time to donate thoughtfully, you’ll ensure your money goes to people who really need it, not to fraud artists. And by being aware of our tax laws, you’ll also keep more of your money away from the Canada Revenue Agency (CRA, formerly known as Revenue Canada), our friendly federal tax gatherer. Before you open your heart and your wallet, here are 10 things to consider.
Beware of scams
Nothing turns a philanthropist into a cynic faster than a charity scam. Unfortunately, these are common, especially after high-profile natural disasters or other tragedies. “There are more people involved in fraud now,” says Boufford, “because even if you get caught, the penalties in Canada are peanuts. And most police forces don’t have the time or money to investigate them.”
There’s a simple way to protect yourself from charity scams: Never give on-the-spot donations, either at the door or over the phone, even if the caller protests that the appeal is urgent. “There’s usually no rush to donate,” Boufford says. “If they come to your door, say, ‘Leave the pledge form and I’ll send a cheque.’” Never give cash or your credit card information — always pay by cheque made out to the charity, never to the individual doing the fundraising.
That said, the Heart and Stroke Foundation (in February) and the Canadian Cancer Society (in April) still use door-to-door canvassers. They’re usually volunteers from the community, they always carry ID, and they can hand you a tax receipt immediately. Of course, you can still donate later by mail if you’re uncomfortable giving at the door.
Do your research
Before you donate to any organization, make sure it’s legit: Ask for its full name and registration number, and look it up on the CRA’s list (cra-arc.gc.ca, click on Charities). If the organization doesn’t appear here, it’s not a registered charity. This site also lists any group that’s had its charitable status revoked — and there are more of these than you might think. Boufford also suggests taking a few minutes to Google the name of the charity. You may turn up news stories or discussion forums that can tip you off to potential problems.
Give proactively
Many of us donate only when we’re approached by fundraisers, often giving $20 or $50 to several charities without ever really feeling we’re making a difference. Instead, take the initiative and figure out how much you’re comfortable donating each year; then divide that among whichever charities truly fire your passion. “That’s the most rewarding,” says Andrea Seale, a consultant and owner of Blueprint Fundraising and Communications in Vancouver. “It’s a way to make sure you give to what you care about.”
