By Jocelyn Baird, NextAdvisor.com
Throughout the year, but especially in the months of November and December, people across the U.S. make charitable contributions to those in need. Some people donate money and time, while others donate food and clothing. Although you might not want to believe that people take advantage of this goodwill, the holidays are a big time for scammers, especially when it comes to charitable donations. Since people are more likely during this time of year than any other to open their hearts and wallets, it's easier to pull the wool over their eyes and convince them that they're making donations to a legitimate charitable organization. Sadly, as residents of New York and Connecticut recently discovered, scamming doesn't only involve cash and checks. Sometimes, it involves goods donated to charity thrift stores as well.
According to prosecutors in New York, a company calling itself Thrift Land USA of Yonkers placed more than 1,300 clothing bins labeled with the logos of two different nonprofit charities throughout both states. The company paid fees to the nonprofits to use their logos, but none of the clothing collected was donated to the needy. Instead, the thrift store made at least $10 million from selling the donated items. Since masquerading as a charity to trick people into making donations to a for-profit company is illegal, the New York Attorney General forced Thrift Land USA to pay a $700,000 settlement. Sadly, this is just one case among many of the people and organizations scamming others out of donations.
How can you tell if your charity thrift store is legitimate?
Whether you're mailing a check, donating goods directly to a store itself or dropping gently used clothing in one of those ubiquitous bins, it's important to know how you can be certain your donation is going where you intend. While it is possible for anyone to be scammed, you can do some things to try and stay one step ahead of potential scammers.
1. Research the organization. Anytime you wish to make a donation to a nonprofit organization, it pays to do some research beforehand. You want to be certain that your charity is going to benefit those in need, not line the pockets of the greedy. Doing a web search and visiting the organization's website are good first steps, but many scammers are smart and capable of setting up convincing websites. You can take things a step further by utilizing the website Charity Navigator, which contains a searchable database of charitable organizations with ratings and information to help you decide whether you want to donate or not. It even features a Donor Advisory page with details on organizations that have received low ratings or had government action taken against them.
2. Find out where the money goes. If you haven't had time to research the organization, or you weren't able to find the information you need to determine whether a thrift store is legitimate, there's no harm in asking. You can try either contacting the company directly or inquire when you're in the store. It's important not only to ask where the profits go, but also what portion of the proceeds the store receives go to the charity or charities it claims to support. Many donors might be shocked to learn that in some cases, only a small percentage of what a store earns from reselling donated items goes to help those in need.
3. Consider only donating to the source. As the case with Thrift Land USA shows, you can't always trust bins and donation boxes set up in parking lots or at store entrances. Instead, consider donating directly to a brick-and-mortar charity thrift store location -- or skip the middleman altogether and take your gently-used products or monetary donation straight to a charitable organization of your choice. Many shelters and other organizations designed to help people in need gladly accept direct donations, and by doing so you can be sure your goodwill is reaching those it's intended for.
It's not always possible to avoid scams, especially when the perpetrators are savvy and appealing to your heart. However, you can make yourself less likely to fall for a scam by paying attention and taking time to research and ask questions before handing over money or anything else of value. To learn more about avoiding scams during the holiday season as well as all year round, you can follow our blog.
This blog post originally appeared on NextAdvisor.com.