Charity Scam

A charity scam is a fraudulent solicitation for a charitable contribution. It takes several forms, and the crude one, a charity that simply does not exist, is not the most common problem. A solicitation can be fraudulent while a real charity sits behind it, if what the donor is told about where the money goes is untrue.

Federal law is unusually specific about this. The Federal Trade Commission's Telemarketing Sales Rule provides at 16 CFR 310.3(d) that "it is a fraudulent charitable solicitation, a deceptive telemarketing act or practice, and a violation of this part for any telemarketer soliciting charitable contributions to misrepresent, directly or by implication," any of six kinds of material information: the nature, purpose or mission of the entity being raised for; that a contribution is tax deductible in whole or in part; the purpose the contribution will be used for; the percentage or amount of any charitable contribution that will go to a charitable organization or to any particular charitable program; any material aspect of a prize promotion, including the odds, the value, or that a contribution is required to win or to participate; and the organization's or telemarketer's affiliation with, or endorsement or sponsorship by, any person or government entity.

Two scope points, so the rule is not overstated. It governs telemarketing, which 16 CFR 310.2 defines as "a plan, program, or campaign which is conducted to induce the purchase of goods or services or a charitable contribution, by use of one or more telephones and which involves more than one interstate telephone call." And it binds a "telemarketer," meaning a person who initiates or receives calls to or from a customer or donor in connection with telemarketing. A door-knock or a purely postal appeal is outside this particular rule, whatever other law may reach it.

The related but separate question of how to check a charity before giving to it, from confirming its tax-exempt status to reading its financial filings, belongs to charity evaluation. This page is about the scheme and the law that names it.

Why limb (4) is the one that does the most work. A solicitation can be made by a paid professional fundraiser rather than by the charity itself, and the share of each dollar that reaches the charitable program is a question of the contract between them. The rule does not fix that share, and nothing in 310.3(d) sets a minimum percentage. What it does is make the representation actionable: telling a donor that most of their gift reaches the program when the contract says otherwise is a fraudulent charitable solicitation, whether or not the charity is real and whether or not any money at all is diverted. That is a narrower rule than most people assume and a more useful one, because it turns a vague sense of being misled into a checkable statement.

The disclosure a caller owes before anything else. 16 CFR 310.4(e) makes it an abusive telemarketing act and a violation of the rule for a telemarketer, in an outbound call to induce a charitable contribution, "to fail to disclose truthfully, promptly, and in a clear and conspicuous manner to the person receiving the call," two things: "the identity of the charitable organization on behalf of which the request is being made," and "that the purpose of the call is to solicit a charitable contribution." Those two disclosures are worth knowing because they are unconditional within the rule's scope and because a caller who resists giving the charity's name is failing a requirement rather than merely being evasive.

Name confusion, and why it is its own category. A solicitation that borrows the name, look or apparent sponsorship of a well-known organization is reached by two separate limbs: (1), covering the nature, purpose or mission of the entity, and (6), covering affiliation with, or endorsement or sponsorship by, any person or government entity. Limb (6) is the one that catches the claim of a government connection, which is a recurring feature of appeals raised around public emergencies and around police, fire and veterans' causes.

The disaster case, which belongs here rather than where intuition puts it. The FBI's Internet Crime Complaint Center defines its Charity crime type as "using deception to get money from individuals believing they are making donations to legitimate charities and/or charities representing victims of natural disasters shortly after the incident occurs." So the fake relief appeal that arrives in the days after a hurricane is, in the FBI's own taxonomy, a charity offense rather than a disaster one. Our page on disaster fraud covers the rest of the post-disaster money complex: people posing as federal officials, contractor and home repair fraud, and aid applications filed in a survivor's name.

Scale, dated and attributed, with its limits stated. In its 2025 Internet Crime Report the FBI recorded 662 complaints under the Charity crime type, with $7,907,609 in reported losses. Two things about that figure. It is small next to most categories in the same report, which is worth reading carefully rather than reassuringly: a solicitation is a low-friction, low-value contact, and a donor who gives $50 to a fake appeal has less reason to file a complaint than someone who has lost a retirement account. And the report notes that each complaint carries only one crime type, so a charity pretext used inside a larger scheme is counted somewhere else.

The mechanics, in the order a donor meets them:

1. The approach, by telephone, message, social media, email or in person, usually attached to a cause with immediate emotional weight: a disaster, a sick child, veterans, police or firefighters.

2. The identity, which is either invented, borrowed from a real organization's name or look, or genuine but not what it is made to sound like.

3. The claim about the money, which is where the misrepresentation usually sits: the share reaching the program, the specific use, or the tax deductibility of the gift.

4. The pressure to give now, which serves the same function it serves in every scheme and which our page on fraud covers as a general mechanism.

5. The payment method, chosen for irreversibility.

A hypothetical example with invented figures; the rule is 16 CFR 310.3(d)(4). A telemarketer calls Beatriz on behalf of a real veterans' charity and tells her that 90 percent of every donation goes to its assistance program. She gives $100, expecting $90 of it to reach the program. Under the fundraising contract the charity actually receives 15 percent, so $15 arrives and $85 does not.

The prohibited act here is not the split. The rule sets no minimum percentage, and a telemarketer who accurately told Beatriz that 15 percent reaches the program would not have violated limb (4) at all, however unattractive she might have found the arithmetic. What makes the call a fraudulent charitable solicitation is the misrepresentation of the percentage: she was told 90 and the figure was 15, a gap of $75 on her gift measured against what she was led to expect.

This is a scheme rather than a product, so what follows is what the rules give a donor and what they do not.

What the rules give

• A named offense with six enumerated limbs, so a complaint can point at a specific misrepresentation rather than at a general sense of being misled.
• A disclosure duty a donor can test in the first ten seconds of a call: the charity's identity, and that the purpose of the call is to solicit.
• A rule that reaches misrepresentation about the share reaching the program, which is the claim most likely to be untrue in an otherwise genuine-looking appeal.
• Coverage of borrowed names and invented government endorsements as separate prohibited representations.

What they do not give

• Any minimum share of a donation that must reach the charitable program. The rule requires truth about the percentage, not a particular percentage.
• Coverage outside telemarketing. The rule is built around telephone campaigns, so a purely postal, door-to-door or online appeal is outside this particular provision.
• Any way to recover a completed donation. A gift is a payment the donor authorized, and our page on fraud sets out why that matters.
• A shortcut around diligence. Recognizing the scheme and checking the charity are two different tasks, and the second one is covered by charity evaluation.