It’s the time of year when Canadians tend to be most generous with their charitable giving, but clients may need to be reminded to be cautious of potential scams.

A recent survey by BMO Harris Private Banking showed that nearly 70% of Canadians are planning on donating a total of $487 in 2011.

“It’s encouraging to see Canadians giving generously to causes that help those who are less fortunate,” said Marvi Ricker, vice president and managing director of philanthropic services at BMO Harris Private Banking. “However, it’s important, especially during the holidays, to be mindful that our generosity can be abused. Unfortunately, every December many Canadians fall prey to pleas for assistance that appear on the surface to be genuine and legitimate but then turn out to be fraudulent.”

Financial advisors can help clients avoid fraudulent charitable requests this holiday season by offering the following tips from Ricker:

1. Verify legitimacy.

Encourage clients to ask those soliciting donations for proof of their identity and to provide the charity’s registered name, address and telephone number. Then can then verify with the Canada Revenue Agency that the organization is a registered charity or is affiliated with one. Ricker also suggests calling the charity to ensure that they are aware of the solicitation by the individual.

2. Avoid giving cash.

If the agency turns out not to be a registered charity, it is difficult for clients to reclaim cash donations. Instead, encourage clients to make donations online or with a cheque addressed to the charity.

3. Be wary of rewards.

Some illegitimate groups promise prizes and sweepstakes as a reward for making a contribution. Remind clients that most charitable organizations offer few, if any, incentives, since contributions tend to go directly to the cause itself.

4. Where is your client’s money going?

Encourage clients to ask solicitors where their charitable donations will be going within the organization, specifying what percentage will be credited to its solicitors, and how much to the cause. Legitimate, registered charities will have this information readily available.

5. Obtain a tax receipt.

Tell clients to ask for proof that their contribution has been submitted. If the charity is unable to provide one, it’s a warning sign that the charity is not registered. As an added bonus, clients will appreciate this opportunity for tax-time savings.