BBB cautions donors to victims of Haiti earthquake

As cleanup begins after the earthquake in Haiti, many Americans are looking for ways to help by donating to a relief organization or charity. The Better Business Bureau of Minnesota and North Dakota (BBB) warns that – as occurred following other recent disasters – 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 Dana Badgerow, president and CEO of the BBB. “Not only do donors 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 to victims of the earthquake.”

The BBB offers the following six tips to help donors decide where to direct donations and ensure that their money provides the most benefit to the needy:

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
Find out who will benefit from the donations and what type of assistance they will be provided.

Ask the charity where it will concentrate its efforts and what products and services it will provide the needy.

Be wary of claims that 100 percent of donations will assist 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 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 of e-mails that claim to show pictures of the disaster areas in attached files because the files may contain viruses. Only open attachments from known senders.

Find out if the charity is providing direct aid or raising money for other groups that are active in the area of the hurricane.

Some charities may be raising money to pass along to relief organizations that are already active in the region. If so, you may want to consider “avoiding the middleman” and giving directly to charities that have a presence in the affected area. Or, at a minimum, check out the ultimate recipients of these donations to ensure the organizations are equipped to effectively provide aid.

Be cautious when giving online.

Be cautious about online giving, especially in response to spam messages and e-mails that claim to link to a relief organization. After other disasters, the BBB was contacted by consumers with concerns about many Web sites and new organizations that were created overnight allegedly to help victims.

If tax deduction is a concern, use the IRS as a resource.

To help ensure your contribution is tax deductible, the donation should be made to a U.S.-based 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.

The Better Business Bureau of Minnesota and North Dakota is a private, non-profit organization providing services to consumers and businesses. The focus of the Bureau’s activity is to promote an ethical marketplace by encouraging honest advertising and selling practices, and offering dispute resolution. For more information on the Better Business Bureau, or to nominate a company for an Integrity Award, visit the Bureau’s Web site at www.thefirstbbb.org, or call (651) 699-1111, toll-free (800) 646-6222.