Fraud Watch: End-of-the-year giving

HELENA- The end of 2017 is almost here, and for a lot of people, that means it’s time to donate to nonprofits.

Montana’s Office of Consumer Protection says 11 percent of all online donations to nonprofits come during the last three days of December, which means this time of the year is also a big target for scammers.

“The scammer is either posing as a legitimate nonprofit, or they’re creating a fake website and a fake nonprofit, and they are trying to steal money and personal information from the donor,” explained OCP Investigator Marcus Meyer.

There are many options when it comes to donations; including simply writing a check to your favorite organization or giving to an endowment. An endowment falls under the category of a planned gift, which according to the Montana Community Foundation, a planned gift is, ‘a way of giving that allows donors to maintain access to income during their lifetime, provide estate and tax planning tools, and build permanent wealth for Montana’s charities, nonprofit organizations and local community foundations.Things like git annuities, charitable trusts and some estate gifts all fall into this category.’

Executive Director of the Montana Community Foundation Mary Rutherford said, “Individuals or businesses that pay any kind of income tax in the state of Montana can give a gift to a qualified endowment, which all of our endowments are qualified endowments, and then take not only a federal deduction but a state tax credit.”

Rutherford is referring to the Montana Charitable Endowment Tax Credit. MCF says this offers a donor the opportunity of 40 percent of a qualifying planned gift’s federal charitable deduction, up to a maximum of $10,000, per year per individual. This also offers a credit of 20 percent of a gift’s federal charitable deduction for a direct gift by a qualified business up to a maximum of $10,000 per year.

But if you want to take advantage of these opportunities this year, it must be done soon.

“Technically the deadline for all gifts, for this year’s tax season, is December 31, but don’t wait,” Rutherford said.

Scammers will likely call you and try to use high-pressure tactics, like insist on a donation right then using a prepaid debit card; scammers will do anything to get you to give up money or personal information. If scammers do get you on the phone, Rutherford said, “Trust your gut. Frankly, a lot of scammers out there make a lot of money with $10 gifts so do your homework.”

Doing your homework means being proactive; make a list of who you want to give to throughout the year and make a timeline for the year, request information from the organizations you’re interested in giving to, ask where the donations are going to go and ask if the money raised is for a specific purpose like a new program.

“So if they are able to gather that information than they can make that educated decision if they want to donate or not,” explained Meyer.

More information about the Montana Community Foundation can be found here.