Avoiding fraudulent charities

With so many charities to choose from, sometimes it's hard to know which to support, or even which ones to avoid.

Operation Donate with Honor

The Federal Trade Commission, along with law enforcement officials and charity regulators from 70 offices in every state, the District of Columbia, American Samoa, Guam and Puerto Rico, announced more than 100 actions and a consumer education initiative in “Operation Donate with Honor,” a crackdown on fraudulent charities that con consumers by falsely promising their donations will help veterans and service members.

Where to find more information

Read the article to be sure the charity you’re supporting is legitimate.

Charity Navigator Advisory System

Charity Navigator also published a list called the CN Advisory System to help donors make informed giving decisions by providing them with information about particular charities. Under this system, charities are categorized into 1 of 3 designations: Low Concern, Moderate Concern and High Concern.

These designations are based on the alleged ethical or legal issue the organization is facing. Charity Navigator provides additional context as to the nature and extent of the concern, and objectively groups similar items of concern together to make it easier for donors to make informed decisions about charities on the CN Advisory list.

Where to find more information

Review the CN Advisory System to help make informed giving decisions about particular charities—such as alleged or confirmed illegal activity or ethical breaches—that may influence your decision to donate.

How Fidelity Charitable reviews grants

Under policies set by the Fidelity Charitable Board of Trustees, Fidelity Charitable conducts a robust review of each grant recommendation to ensure grants are made only to IRS-qualified public charities, that those public charities use those granted funds solely for proper charitable purposes, and that grants do not confer impermissible benefits on donors or on any other person. Fidelity Charitable reserves the right to perform additional due diligence and to decline to make a recommended grant to a charitable organization.

Fidelity Charitable’s review of grants takes into consideration data from a variety of sources, ranging from IRS databases, public records regarding litigation and governmental proceedings, to many other sources of information, including, but not limited to, news reports and information provided by donors, grantees, and others. For example, Fidelity Charitable does not make grants if an organization may be engaged in illegal or non-charitable activity (such as terrorism, money laundering, hate crimes, or fraud), or if a grant may otherwise be used for improper purposes (such as personal benefit).

The IRS is the principal U.S. government agency responsible for determining which organizations are qualified public charities. If and when an organization loses its IRS-recognized public charity status, Fidelity Charitable immediately stops making grants to it and notifies the recommending donors. In addition, other state and federal agencies may review the activities of a charitable organization, which can also affect whether Fidelity Charitable makes grants to an organization.

Fidelity Charitable is cause-neutral and supports grantmaking to a wide range of charitable organizations as recommended by its donors, does not limit grantmaking to specific charitable activities or fields of interest, to specific geographical or demographic criteria, or to specific organizations based on political, religious, or philosophical grounds.

Grants recommended by donors do not, in any way, reflect the views of, or represent an endorsement by, Fidelity Charitable, an independent public charity, the Fidelity Charitable Board of Trustees, or Fidelity Investments. By the same token, in declining to approve a grant recommendation to a specific organization, Fidelity Charitable is not making any form of statement about that organization or its activities. Declining to make a grant does not prevent the organization from speaking or challenging its status as a charitable organization, nor does it prevent the organization from seeking and receiving funds from other sources. It also does not prevent the recommending donor from making a contribution from other funds.

There are many charities to choose from, and sometimes donors can find it hard to know which to support. Fidelity Charitable provides guidance and resources to help donors evaluate charities and make more informed giving decisions.

The Fidelity Charitable Board of Trustees is committed to ensuring all grants are made for charitable purposes. As such, the Trustees regularly review the Fidelity Charitable grantmaking policies and procedures.

Where to find more information

Learn more about how to evaluate a charity by understanding their mission, board and finances—and find the right charity for you to support.

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