How to Avoid Getting Scammed When Charity Telemarketers Call
You just got home and were looking forward to having dinner with your family, when the phone rings. You hesitate and then take the call.
It’s a charity raising money for a cause, a disease, or a group somehow affiliated with the police or firefighters.
What should you do? Hang up? Get out your credit card? Tell them to call later?
Whatever you decide, be very, very careful. Scam by telephone has to be one the most common crimes these days.
That call may be from a legitimate charity, a telemarketer calling on behalf of a charity, or outright fraud.
What Is Telemarketing?
Telemarketing is ubiquitous. Businesses use it to sell their products or services. Charities use it to reach their existing or potential donors.
It’s just using the phone to reach consumers.
Unfortunately, telemarketing has been haunted by scammers of all kinds. And charities have often been caught up in those scams.
Is Telemarketing by Charities So Bad?
Telemarketing alone is not a bad thing for charities. Especially when a charity makes the calls using staff or volunteers. Problems arise when charities hire outside companies to do the telemarketing for them.
Many large charities, because they need thousands of donors, use telemarketing firms. You’ve likely been called by one of these companies working for your alma mater or one of the well-known national charities.
Often this is just fine. The companies earn a reasonable percentage of what is brought in and the nonprofit benefits from economy of scale. Even rather large portions received by telemarketing companies are defended by some experts since the cost of telemarketing is upfront and decreases over time.
For instance, perhaps much of the first $25 you give to a charity using a telemarketing company is paid to the company. But, since you are now a donor and may keep giving for several years, the cost per dollar given for the charity goes down.
But some charities hire companies that use questionable techniques to convince people to donate, and then the companies keep most of the money with a fraction of it going back to the charity.
Such practices lead to inefficiency. It costs too much per dollar raised by the charity. That’s one reason donors need to check into a charity’s efficiency statistics. However, just looking at those statistics may not tell you a lot.
Many donors are shocked when they learn that as much as forty percent of a charity's income goes to overhead. But they forget that overhead (or indirect costs) covers a lot of ground. It's not just about fundraising costs. There are also costs associated with just keeping the doors open, keeping equipment up-to-date, the upkeep of vehicles that help provide the charity's services.
Often we hold charities to an impossible standard, expecting them to solve societal needs on a bare bones budget. Efficiency scores alone don't tell the entire story. Donors should become familiar with the overhead myth before they judge whether a charity spends too much on running its operation.
A better measure of a charity is how effective it is. But that's not always easy to measure and is probably why donors resort to simple and misleading efficiency scores. Fortunately, charity raters such as CharityNavigator the Better Business Bureau have now developed more realistic models to use when assessing how well a charity is doing.
Charitable Telemarketing in the News
In recent years, many questionable telemarketing situations have been exposed by the press, bringing it to everyone’s attention and giving some charities painful black eyes.
A few well-known and respected charities have been in the headlines as well as smaller nonprofits unknown to most people. They have been linked with telemarketing companies that are notorious for the massive amounts of money they earn from charitable telemarketing.
While it's important to become aware of bad actors in charity fundraising, it's also wise to not paint all charities with the same black brush. Most charities can be trusted to spend your donor dollars the way they say they will. All donors should become familiar with the charities they support and over an extended period.
How Selling of Donor Lists Makes Charity Telemarketing Worse
Ever wonder why you got a call ( or a direct mail fundraising letter) from a charity you've never shown any interest in? How did they get your information?
Many of the nation’s largest charities either sell or share the names of their donors. Donor lists for many of the country's best-known charities are available for sale from online data brokers.
According to Charity Navigator, eight of the 25 largest charities listed by Forbes lack adequate donor privacy policies. They either lack a policy, state that they share information or share information unless a donor explicitly opts out. Only seven of those 25 largest charities receive the highest privacy rating from Charity Navigator.
Among the 25 largest charities, there are some that promise substantial donor confidentiality. They include Direct Relief, Boys & Girls Clubs of America, Compassion International, and Samaritan’s Purse. Smaller charities with high donor privacy policies include Wikimedia Foundation, Electronic Frontier Foundation, Room to Read and charity: water.
What Are Your Rights When Charities Use Telemarketing?
There is the National Do Not Call Registry, which most of us should use to cut down on unwanted phone calls. But, the Registry does not cover calls made by charities.
However, if a charity uses a telemarketing company, that company must maintain a “no call” list. You can request that your name is placed on that list. It will only cover that particular charity, however.
What Should You Do to Avoid Getting Scammed by Telemarketers?
- Hang up! If you hate telemarketing calls, the best thing to do is simply hang up immediately. Or hang up should the call go badly. I recently hung up on a political fundraising call because the caller deluged me with her pitch without even asking if this was a convenient time to call me.
- Ask the caller if he works for a telemarketing company or if he is a volunteer or staff member of the charity. You will likely feel more inclined to give to a volunteer than a professional telemarketer.
- If the call is from a company, ask the caller how much of your donation will go to the charity. The law requires that companies tell you. And they do know. If the caller says she does not have that information, then terminate the call.
- Say that you do not give over the phone. This is what I always do. Because I don’t give over the phone. It's just too dangerous to be sharing credit card numbers over the phone.
- Do your research. Use charity rating organizations to check out charities. Go to CharityNavigator or the Better Business Bureau site and look up the charity you're considering. If its score is high, consider donating. Don’t expect to find all charities on these lists. But large ones usually are.For smaller charities, it's wise to stick to your local area. It's easier to understand those organizations and to keep tabs on them.
- Give directly. Send a check to your favorite charity or drop it by the charity's office. Go to the charity's website and donate using its payment system. Purchase its tickets, attend its special events, and, especially if you are giving a significant amount, ask to visit with the fundraising officer personally.
- Do not give into badgering by the caller. Never give in to pressure. If you feel uncomfortable, end the call.
- Avoid sharing your credit card information, banking or any other kind of personal information over the phone. It’s simply not safe. If you do want to donate, tell the caller to send you a letter in the mail (scammers won’t do this) or that you will visit the charity website to make your donation.
- Beware of sound-alike charity names. Many scammers use names that sound familiar to rip you off. Just because the name has “cancer” in it does not mean that the call is a reputable cancer charity
- Check out any charity's privacy policies before donating. If you do not want your information shared with other groups, don't donate to any charity that does not promise privacy. Just doing this could cut way down on phone calls and direct mail that you do not want. Privacy policies should be right on any charity's website, and Charity Navigator rates each charity in its database for privacy.
- Educate yourself about charitable giving. Read articles on philanthropy and charities in your favorite publications, browse the articles at the rating sites, engage in conversations with friends about charitable giving, and share information.
- You would not buy a car, pick a gym, or choose a daycare without doing your research. Charitable giving deserves the same amount of care and attention.
- Telemarketing calls from charities are not inherently evil. And some charities just phone to check in, or even to thank you for a recent donation.
- Once you know that the call is for fundraising, do make sure you are talking with a legitimate company or with a volunteer or staff member of the charity. Stay generous, but don’t fall for a scam.