Not All Charities are Equipped to Help and Some Might be Fraudulent, Warns BBB
January 13, 2010 – Pittsburgh, PA – As immediate relief needs are assessed in the wake of the devastating earthquake in Haiti on January 12th, many Americans are looking for ways to help by donating to a charity. The Better Business Bureau of Western Pennsylvania warns that—as occurred following the tsunami in 2004 and Katrina in 2005—fraudulent charities will likely emerge to try and scam donations from well-meaning Americans.
“Whenever there is a major natural disaster, be it home or abroad, there are two things you can count on. The first is the generosity of Americans to donate time and money to help victims, and the second is the appearance of poorly run and in some cases fraudulent charities,” said Warren King, President of the Western Pennsylvania BBB. “Not only do Americans need to be concerned about avoiding fraud, they also need to make sure their money goes to competent relief organizations that are equipped and experienced to handle the unique challenges of providing assistance.”
The BBB of Western PA offers the following six tips to help Americans decide where to direct donations:
Rely on expert opinion when it comes to evaluating a charity.
Be cautious when relying on third-party recommendations such as bloggers or other Web sites, as they might not have fully researched the listed relief organizations. The public can go to www.bbb.org/charity to research charities and relief organizations to verify that they are accredited by the BBB and meet the 20 Standards for Charity Accountability.
Ensure your donation is tax deductible.
To help ensure your contribution is tax deductible, the donation should be made to a charitable organization that is tax exempt under section 501 (c)(3) of the Internal Revenue Code. Go to IRS Publication 78 on www.irs.gov for a current list of all organizations eligible to receive contributions deductible as charitable gifts. You can also search the charity with the PA Department of Charities by calling 800.732.0999.
Be wary of claims that 100 percent of donations will assist relief victims.
Despite what an organization might claim, charities have fund raising and administrative costs. Even a credit card donation will involve, at a minimum, a processing fee. If a charity claims 100 percent of collected funds will be assisting earthquake victims, the truth is that the organization is still probably incurring fund raising and administrative expenses. They may use some of their other funds to pay this, but the expenses will still be incurred.
Be cautious when giving online.
Be cautious about online giving, especially in response to spam messages and emails that claim to link to a relief organization. In response to the tsunami disaster in 2004, there were concerns raised about many Web sites and new organizations that were created overnight allegedly to help victims.
Find out if the charity has an on-the-ground presence in the impacted areas.
Unless the charity already has staff in the affected areas, it may be difficult to get new aid workers to quickly provide assistance. See if the charity’s website clearly describes what they can do to address immediate needs.
Find out if the charity is providing direct aid or raising money for other groups.
Some charities may be raising money to pass along to relief organizations. If so, you may want to consider “avoiding the middleman” and giving directly to charities that have a presence in the region. Or, at a minimum, check out the ultimate recipients of these donations to ensure the organizations are equipped to effectively provide aid.
Gifts of clothing, food or other in-kind donations.
In-kind drives for food and clothing—while well intentioned— may not necessarily be the quickest way to help those in need - unless the organization has the staff and infrastructure to be able to properly distribute such aid. Ask the charity about their transportation and distribution plans. Be wary of those who are not experienced in disaster relief assistance.
For more information or to schedule an interview with the Western Pennsylvania BBB, contact Warren King at 412-456-2735 x 129.
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About the BBB
BBB is an unbiased organization that sets and upholds high standards for fair and honest business behavior. Businesses that earn BBB accreditation contractually agree and adhere to the organization’s high standards of ethical business behavior. BBB provides objective advice, free business BBB Reliability ReportsTM and charity BBB Wise Giving ReportsTM, and educational information on topics affecting marketplace trust. To further promote trust, BBB also offers complaint and dispute resolution support for consumers and businesses when there is difference in viewpoints. The first BBB was founded in 1912. Today, 128 BBBs serve communities across the U.S. and Canada, evaluating and monitoring more than 4 million local and national businesses and charities. Please visit www.bbb.org for more information about the BBB.