Donating to a non-profit can be a fulfilling way to give back to your community, but it also serves as a financial strategy, particularly under Puerto Rico’s Act 60, formerly known as Act 20/22. This law allows individuals and businesses to benefit from significant tax incentives, provided they donate to approved non-profit organizations.
However, the altruistic landscape is not immune to unscrupulous activities. With the rising prominence of Act 60, there’s been an increase in fake non-profits eyeing your hard-earned money—and your goodwill. A donation to an unqualified non-profit risks not only the social impact but also places your Act 60 decree in jeopardy. A revoked degree means retroactive taxes, nullifying the very benefits you were eyeing.
So, how do you separate the wheat from the chaff? Here are 10 signs that you're dealing with a fake non-profit, especially critical when you are donating under Act 60 in Puerto Rico.
1. Lack of Transparency
Reputable non-profits make their financials and organizational reports readily available. They often disclose what percentage of donations go to their cause and what is reserved for administrative expenses. Fake non-profits will have murky operations and nebulous financials, providing ample room for suspicion.
2. No 501c3, CECFL, or 1101.01 Clearance
For an organization to qualify for Act 60 donations in Puerto Rico, they need clearance from the COMISIÓN ESPECIAL CONJUNTA DE FONDOS LEGISLATIVOS PARA IMPACTO COMUNITARIO (known by its Spanish acronym, CECFL) and compliance with the Commonwealth's 1101.01 tax requirements. If these credentials are missing, run in the opposite direction. You can find them online here.
3. Ephemeral Online Presence
A genuine non-profit usually has a well-maintained website and robust social media platforms. If you’re looking at a barebones website, or worse, just a hastily put-together Facebook page, proceed with caution.
4. Stock Photos Everywhere
It's 2023; even high school students can create original visual content for their projects. If an organization is using stock photos for their campaigns and testimonials, you should definitely raise an eyebrow.
5. The Donation Season Phenomenon
Fake non-profits often materialize around holidays or crises when people are in the giving mood. If you haven’t heard of an organization at any other time, it could be a red flag.
6. Pressure Tactics
Scammers are experts in eliciting urgent responses. If the organization is pressing you to donate immediately without providing sufficient information, think twice.
7. Vague Mission Statement
An authentic non-profit can articulate its mission and objectives succinctly. If the organization in question waffles or provides nebulous answers, they likely have something to hide.
8. Unusual Payment Methods
Gift cards, wire transfers, or cryptocurrencies are not standard payment methods for reputable non-profits. Stick to checks, credit cards, or approved financial platforms.
9. The Bait-and-Switch Tactic: Misaligned Freebies and Dubious Donation Requests
When evaluating a non-profit, beware of organizations that offer "free" marketing incentives, such as guides or gifts, that are entirely unrelated to their stated mission. These seemingly generous offers might capture your interest initially. However, if the non-profit then requests a donation for a cause that appears vague or lacks substance, it's a red flag.This bait-and-switch tactic is a classic sign of a questionable organization. A reputable non-profit will align its promotional materials and donation requests with its core mission, ensuring transparency and credibility. If the freebies and the fundraising ask don't match up, you're likely dealing with a scam..
10. Absence of Third-Party Validation
Reputable non-profits often have media coverage, partnerships, or endorsements from recognized institutions. An absence of these is a potential red flag.
The Bottom Line:
When your financial strategy and philanthropic goodwill are at stake, caution is the watchword. Always perform due diligence, especially in the context of Act 60 in Puerto Rico. A mistake could cost you more than just the amount you donated; it could entail a significant financial and legal imbroglio, including the revocation of your Act 60 decree and a hefty tax bill. Navigate the non-profit landscape wisely, keep your eyes peeled for these warning signs, and your altruistic endeavors will be both impactful and financially rewarding.
At Tech My School you can be sure that your donations are going to a real cause, providing real services, are legally compliant, and are completely transparent. Our social media provides ample example of our work every day. Our newsletter and website hosts all of our records from day 1. If you are an Act 60 donor and would like to join our mission as the most impactful educational non profit on the island, go to our website www.techmyschool.org/donate and we will provide your official receipt within minutes.