What To Think About Before Giving Money To Haiti

Red Cross distributes water in Port-au-Prince i i

hide captionThe Haitian Red Cross distributes water in Port-au-Prince.

Thony Belizaire/AFP/Getty Images
Red Cross distributes water in Port-au-Prince

The Haitian Red Cross distributes water in Port-au-Prince.

Thony Belizaire/AFP/Getty Images

Beware Charitable Scams

Every as many Americans search for ways to help after a major natural disaster hits, scammers also see opportunities for their own profit. The FBI has warned people to beware of unsolicited e-mails, telephone calls and door-to-door collections seeking donations to help victims of the Haitian earthquake.

"Be skeptical of individuals representing themselves as surviving victims or officials asking for donations via e-mail or social networking sites," the FBI said in a warning. "Beware of organizations with copy-names similar to, but not exactly the same as those of reputable charities."

The bureau has established a telephone hot line to report suspected fraud at (866) 720-5721, or victims can send an e-mail to disaster@leo.gov.

As three U.S. presidents, various entertainment superstars and many other notables work to raise money for the Haiti relief effort, charity watchdog groups are being inundated with inquiries from Americans trying to decide where their money will do the most good.

It's not easy to sort through the bewildering array of groups competing for donations, but experts say the single most important thing to look for is groups that were there long before last week's ruinous earthquake. Relief workers with a long track record of operating in Haiti already have experienced local staffers, an established mechanism to deliver services and links to various communities.

"It's not the time for amateurs," says Daniel Borochoff, president of the American Institute of Philanthropy.

The biggest beneficiary of private giving from Americans so far has been the American Red Cross, which has collected pledges of more than $100 million since the quake. One key factor was President Obama, who asked Americans to text the word "Haiti to 90999 on their mobile phones to charge $10 to their bill and have it sent to the Red Cross, which has a congressional mandate to provide some disaster relief services. The text-messaging initiative has raised a record $22 million so far after another boost from ads run during last weekend's National Football League playoff games.

But the Red Cross has been beset by questions about its performance in response to some recent disasters, particularly Hurricane Katrina in 2005.

The group has pared down and reconfigured its board since then, and hired a new chief executive officer. Borochoff says that donating through the Red Cross also has some key advantages because it has an experienced staff, controls half the nation's blood supply and, as a quasi-governmental organization, is accountable to the government.

"The government has some sway over them," says Borochoff. "They're audited by the Defense Department. Usually with most charities you're reporting to the state attorneys general."

But there are dozens of different groups operating in Haiti, each with their own specialties. They vary widely, however, in their effectiveness, which is very difficult to measure. Borochoff says Americans are doing their homework before they donate. His group has seen a 600 percent increase in the number of people accessing information on charities at the group's charitywatch.org Web site.

That site (and another run by the Better Business Bureau's Wise Giving Alliance) rate charitable organizations based on extensive evaluations that include what percentage of donations are eaten up by administrative costs. The sites also explore conflict-of-interest issues, the organization's governance, the effectiveness of its programs and financial audit reports.

"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," says Art Taylor, president of the Wise Giving Alliance. "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."

These watchdogs offer some useful tips for evaluating aid groups, starting with the longevity of their operations in Haiti.

Interaction, a private agency coordinating the operations of private relief groups in Haiti, is overseeing 65 organizations on the ground. Of those, 40 groups had a presence in the nation before the quake, Sam Worthington, Interaction's president and CEO, tells NPR's Pam Fessler.

Some other factors to consider:

— It can take 60 to 90 days for some gifts to arrive, especially if they're going through a middle man, such as a cell phone company. "If you want your gift to have an immediate impact, go directly to the charity's Web site to make a donation," says Taylor. Wireless providers say they are working to speed up text-message contributions, but the fastest way to donate is still by using a credit or debit card.

— Make sure credit card companies or cell phone providers have waived processing fees associated with the gift.

— Be wary of groups that claim 100 percent of donations will go to earthquake victims. In most cases, some portion of donations will go to administrative costs, credit card processing fees, or fundraising.

— Gifts of food, clothing or supplies are well-intentioned, but may not be helpful. Borochoff says in-kind donations may be difficult to deliver when supply lines are clogged after a disaster. Such gifts also take a lot of manpower to process.

Aid groups are also already starting to look beyond the immediate emergency in Haiti. Borochoff notes that some organizations — including Doctors Without Borders — are asking donors to make contributions to their general emergency funds to give them flexibility to respond to other disasters. He applauds that kind of transparency because it helps ensure that donations are neither misdirected nor wasted on lower-priority projects.

"They recognize that this is a highly publicized disaster, and they'll be able to raise enough money for Haiti," he says. "Once the emergency needs are met, they want to focus on other crises."

Worthington also points out that the reconstruction efforts in the Caribbean nation will last long after public interest has moved on to other issues. The United Nations World Food Program has already announced that it is planning for a six-month effort to feed some 2 million people.

In addition, there are a huge variety of long- and short-term disaster response goals that start with urgent food distribution and water purification, but will soon move on to rebuilding the country's devastated infrastructure and restarting its shattered economy. Although an estimated $200 million has been committed through private donations, Worthington says that an even greater financial commitment will be needed in the coming years.

"A reconstruction of this magnitude will reach into the billions," says Worthington, with the bulk of the funding coming from private donors.

Still, there are some risks associated with charitable giving. Last week, the FBI and attorneys general across the country warned donors to be wary of scams, such as fly-by-night front companies posing as legitimate charities.

Beyond the scams, there are some legitimate organizations that aren't operating at maximum efficiency, Borochoff warns. That's where the BBB and the AIP tips come in handy.

As the relief effort grinds forward, there will doubtless be scandals associated with the fundraising effort. But, says Borochoff, donors should chalk it up to doing business in the chaotic aftermath of a disaster.

"It's not," he adds, "a reason to turn away."

NPR's Pam Fessler contributed to this report

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