When deciding to make an arrangement for planned giving, you need to research the organizations that are taking advantage of your support. If you decide to make a beneficiary of your life insurance policy a charitable institution, make sure your choice is not an ongoing scam.
The Federal Trade Commission suggests being aware of the following to avoid organizations that are not legal.
Be suspicious when an organization:
• Refuses to provide detailed information about its identity, mission, costs and how the donation will be used
• Will not provide proof that a contribution is tax deductible
• Uses a name that closely resembles that of a better-known, reputable organization
•Thanks you for a pledge you do not remember making
• Uses high-pressure tactics like trying to get you to donate immediately, without giving you time to think about it and research
• Asks for donations in cash or asks you to wire money
• Offers to send a courier or overnight delivery service to collect the donation immediately
• Guarantees sweepstakes winnings in exchange for a contribution. By law, you never have to give a donation to be eligible to win a sweepstakes.
Get as much information about the charity as possible and study their reputation online and complaints to learn about their reputation. Find out if the charity is registered in your state by contacting the National Association of State Charity Officials – organizations such as the BBB or Charity Navigator or Watch. Visit the Internal Revenue Service to find out if the organization is eligible to receive a tax-deductible contribution. Do not provide a check, bank account or credit card number until you know for sure.
If you think you have been a victim, you can file a complaint with the Federal Trade Commission. Your complaints can help eliminate the scam and lead to prosecution.
Want to learn more about life insurance? Read our article The Most Frequently Asked Life Insurance Questions.