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12/21/2010 06:01 PM

NY1 For You: Beware Of Holiday Charity Scams

By: Rocco Vertuccio

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Before New Yorkers reach deep into their hearts and wallets to give to the less fortunate this holiday season, they should make sure their good will is going to the intended place. NY1's Rocco Vertuccio filed the following report.

It's the season for giving, but make sure to give wisely, as some people may be trying to take advantage of New Yorkers' holiday cheer.

Find Out More About Charities

Better Business Bureau: bbb.org/charity

American Institute of Philanthropy: bbb.org/charity

Guide Star: guidestar.org

State Charities Bureau Registry: bartlett.oag.state.ny.us

"With the holidays coming, people are in a giving mood. They want to give back to the community, so the fraudsters prey on that," says Northeast Regional Office Director Leonard Gordon of the Federal Trade Commission. "Another reason that charity scams seem to pop up is that it’s the end of the year, so that people are looking to make deductions that are tax-deductable. They need to do that before the end of the calendar year, the fraudsters are aware of that."

High-pressure sales tactics on the phone or e-mail are red flags. Donors also need to do their research into the charities.

"The Better Business Bureau has a wise giving alliance, you can go to that at bbb.org/charity," says Gordon. "There’s the American Institute of Philanthropy, something called Charity Navigator which ranks charities and there’s also an institution called Guide Star that gives you information on how efficient charities are. But the state also has information and many charities have to be registered with the state and provide that type of information.

Donors should make sure their money is getting to where they want it to go.

"It’s never a good idea to make significant charitable donations in cash," says Gordon. "First off, you don’t have a receipt for tax purposes. Secondly, it’s impossible to figure out if your money is going where you think it’s going if you just give somebody some cash."

Also pay attention to whether the organization is "tax exempt" or "tax deductible." "Tax exempt" means the organization does not have to pay taxes, and "tax deductible" means donors can deduct their contributions on their federal income tax returns.

Those who feel they have been victimized by a charity scam can go to FTC.gov to file a complaint.

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