Wise money management goes well beyond estate planning. All of us also need to be smart about how we decide which causes to support.
 
Nowadays, in addition to those established charitable organizations (which can be investigated through such useful services as Charity Navigator), many causes are turning to so-called “crowdfunding” or “crowdsourcing” to raise money. It might be an appeal to help pay medical expenses for somebody facing a serious illness. It could be an entrepreneur looking for start-up capital for a new business or to develop an invention.
 
And as we’re seen locally this fall, it could involve helping someone recover from a natural disaster like Hurricane Florence.
 
Before you venture into this intriguing, but potentially perilous, form of fundraising, you should ask yourself – Is this appeal legitimate or is it a scam?
 
Unfortunately, one thing that hasn’t changed as technology advances is good old human nature. There will always be crooks who find a way to abuse your good nature. Crowdsourcing scammers will try to cheat you when you think you’re helping someone who really needs a hand.
 
Fortunately, common sense is an effective first line of defense against these newfangled scams.
 
Maybe you’ve been approached by someone you know and asked to pitch in to a crowdsourcing campaign. If you trust the person – and trust their judgment – that may be sufficient grounds to help their cause.
 
But if you don’t know the person who created the campaign, whether for themselves or for someone else, it’s wise to see what you can learn about them online. Fortunately, crowdsourcing platforms usually include links to social media accounts for the creator and, often, the person who would benefit.
 
Look at the person’s profiles on Facebook and other social media platforms. Signs that an account may not be on the up-and-up include having just been created. Look at the person’s posts, each of which includes a date stamp. If you don’t see anything more than a few days or weeks old, consider that a red flag.
 
On the other hand, an account that looks stale and unused, with nothing posted recently, may not be legit, either.
 
Another danger sign is a shortage of “friends” or followers. Another way to feel more confident about a person’s legitimacy is to see that the details of their profiles on multiple platforms (such as Twitter, Instagram, etc.) jibe with each other.
 
Then there’s the crowdsourcing platform itself. Some of these – GoFundMe is an example – are well-established. Others may be brand-new and haven’t developed a reputation yet. Either way, check out the site’s terms and conditions, so you know how it operates and what its rules are. Does the platform vet the campaigns it hosts or can anybody ask for money without being evaluated? What are its refund policies? Does it offer any guarantees to protect donors if a campaign should turn out to be a scam?
 
Also, just as with any website that asks for money or such financial details as credit card numbers, be sure it’s secure. With modern web browsers, that’s easy.
 
First, look at the site’s address at the top of the page. Be sure it starts with the all-important letters “https.” The “s” stands for “secure,” meaning crucial data is encrypted before being transmitted across the internet. Browser software also shows a closed padlock symbol, sometimes right next to the address, sometimes in the lower right corner of the screen, if the site’s security certificate is legitimate and up to date. If the padlock symbol is open, the site is not secure. Don’t enter any personal data!
 
For those of us who have endured a recent disaster, it’s no surprise to know that con artists often try to exploit people’s sympathy for victims of floods, fires and other calamities. It’s always safest, and usually the most efficient use of your money, to donate through reputable non-profit organizations. That’s most important when you’re a long way off from where the need lies.
 
Considering a local relief organization for hurricane victims in Wilmington? You probably know somebody on its board! But want to help victims of fires in California? Due diligence won’t be so easy. If in doubt about how well a charity uses donations, CharityNavigator.org provides helpful ratings and other information.
 
That’s not to say crowdsourcing is necessarily a bad thing after a disaster. Right here in eastern North Carolina, for example, plenty of people and communities remain in real need even months after Florence. The closer you are to the need, and to the fundraising campaign, the better able you’ll be to assess whether it’s a worthy recipient of your gift. If you’re asked to help with a local crowdsourcing effort, it’s worth inquiring to see if people you know and trust are involved, or can vouch for the cause.
 
So. what if, despite your precautions, you think you have been cheated? Or just have suspicions about a campaign?
 
First, contact the crowdsourcing platform itself. Their reputations depend on keeping the scammers away, so they have their own internal security systems. On an official level, the Federal Trade Commission oversees web-based fundraising operations,and will take complaints at its website, https://www.ftccomplaintassistant.gov. (Note that all-important “https” in the address!)
 
Need more guidance on how to be generous but smart about your donations? The financial-planning experts at Old North State Trust are experienced and knowledgeable about helping our clients make wise charitable-giving decisions.

Old North State Trust, LLC (ONST) periodically produces publications as a service to clients and friends.  The information contained in these publications is intended to provide general information about issues related to trust, investment and estate related topics.  Readers should be aware that the facts may vary depending upon individual circumstances.  The information contained in these publications is intended solely for informational purposes, is proprietary to ONST and is not guaranteed to be accurate, complete or timely. 

Susan Willett is the director of trust services and oversees all aspects of trust administration for Old North State Trust, LLC. Old North State Trust, a North Carolina chartered trust company, provides: asset management services; income, estate and trust tax consulting; retirement planning and administration; and trustee and estate services to both individuals and businesses. Old North State Trust professionals have many years of experience and for over a decade have assisted clients in identifying and reaching their financial goals. For more information, visit www.oldnorthstatetrust.com or call 910-399-5470.