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Federal Trade Commission

12/03/2021 | News release | Distributed by Public on 12/03/2021 13:20

How small businesses can up the impact of their charitable donations

As the holidays - and the end of the tax year - draw near, people are likely to approach small business owners with requests for charitable contributions. But scammers are hard at work with their own holiday rush. To protect your business from fraud and to amplify the impact of your donations on the charities that matter to you, these simple steps can help ensure that Giving Tuesday isn't followed by Regretful Wednesday.

A standard list of questions can help you make wiser decisions. Charitable contributions should come from the heart and the head. Bona fide charities are usually happy to discuss their mission and plans for the future. Before donating, ask for:

  • the exact name and address of the organization
  • a website you can review
  • the percentage of donations they spend on fund-raising
  • a clear answer on whether they're tax exempt
  • a recap of how long the group has been in operation and what they've accomplished
  • how they intend to use your contribution.

To avoid fly-by-nighters, put charitable appeals to the test. The holidays are the busy season for many legitimate nonprofits, but sound-alike scammers may contact you, too. Evaluate telemarketing pitches with heightened scrutiny. In an exercise of due diligence, search for the name of the group with words like "scam" or "complaint." Consult in-depth reviews from trusted charity watchdogs.

Pump the brakes if you're pressured for an on-the-spot contribution. Just as you avoid impulse purchases, it's wise to avoid impulse contributions. The best advice is that before you donate, sleep on it. That includes social media pleas, crowdfunding campaigns organized by friends and colleagues, and requests from local groups that you display a sign or collect contributions at the register. "Let us give it some thought" can get your small business the time you need to evaluate the merits of a request.

Looking for more advice on making your contributions count? Visit ftc.gov/charity.