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"Operation Phoney Philanthropy" Launched to Fight Charity Fraud

Scam artists, beware. "Operation Phoney Philanthropy" is underway. A law enforcement and public education campaign, Operation Phoney Philanthropy was launched this May by the Federal Trade Commission (FTC). Thirty-four states, the Better Business Bureau's Wise Giving Alliance, and GuideStar have all been enlisted in the effort to stop fraudulent fundraising and help donors avoid phony charities.
"Phone-y" refers to deceptive fundraising calls made to individuals and businesses. Dishonest telemarketers take advantage of the public's generosity, often by using names related to police or firefighters. Fraudulent nonprofits with such names as "Firefighters' Assistance Foundation" and "Police and Sheriffs' Support Fund" have collected millions of dollars in donations from unsuspecting contributors.

In another case reported by the FTC, scam telemarketers encouraged businesses to purchase children's activity books to be donated to local hospitals for use by sick children. In actuality, the businesses were victims of a deceptive for-profit operation.

"By diverting donors' charitable dollars," explained Howard Beales, director of the FTC's Bureau of Consumer Protection, "these scam artists undermine the public's confidence in legitimate charitable fundraising, and injure legitimate nonprofit organizations competing for charity dollars."

Consumers are being urged to verify the charitable claims made by telemarketers. The FTC recommends asking how much of the donation will go to the described programs, calling the nonprofits being represented, and verifying the charity's legitimacy by researching it on GuideStar.

"GuideStar is proud to be a donor's first line of defense against fraudulent charities," stated GuideStar president and CEO Robert G. Ottenhoff. "All of the nonprofits in our database are legitimate organizations recognized by the Internal Revenue Service. In addition, the information available on GuideStar enables donors to determine whether they want to support a particular charity."

Solicitations that appear to be fraudulent or deceptive should be reported to the appropriate state charity office or to the FTC at 1-877-382-4357.

"Operation Phoney Philanthropy" also includes a nationwide public education campaign. Educational materials, including a publication for caregivers of older consumers, a brochure for nonprofit organizations considering hiring a professional fundraiser, and a one-page Charity Checklist, are available from the FTC Web site.
Topics: Law and Regulations Nonprofits Operation Phoney Philanthropy