Watch for fraudulent charities

A s evidence of the devastation in Myanmar and China continues to mount, many Americans are looking for ways to help by donating to a relief organization or charity.

The Better Business Bureau Wise Giving Alliance warns that - as occurred following the tsunami disaster in 2004 - fraudulent charities will likely emerge to try and scam donations from well-meaning Americans.

Whenever there's 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.

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.

Rely on expert opinion when it comes to evaluating a charity.

Be cautious when relying on third-party recommendations such as bloggers or other website references, 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."

Find out if the charity has an on-the-ground continuing presence in the affected region.

Because of the stringent conditions in disaster areas, unless the charity already has staff inside the country, it will be difficult for new aid workers to attain visas and ultimately accomplish aid assistance in the country. Check out organizations at www.interaction.org - the nation's largest coalition of international relief organizations - to verify which aid organizations are currently active in the affected country.

Find out who will benefit and what type of assistance will be provided.

The immediate needs are usually food, water, shelter, transportation and clean-up efforts.

Be wary of claims that 100 percent of donations will benefit 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.   

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

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. Or, at a minimum, check out the ultimate recipients of these donations to ensure the organizations are equipped to effectively provide aid.

Be cautious about online giving, especially in response to spam messages and e-mails that claim to link to a relief organization. In response to the tsunami disaster, there were concerns raised about many websites and new organizations that were created overnight allegedly to help victims.

Gifts of clothing, food or other in-kind donations are not recommended.

In-kind donation assistance is not practical. Most foreign relief organizations prefer cash donations so that supplies can be purchased near the relief site. In-kind drives for food and clothing - while well intentioned - will not end up being delivered to those in need.

If a tax deduction is a concern, donate domestically.

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.

For more information on BBB Wise Giving Alliance and to view more than 1,000 BBB Wise Giving Reports on charities and relief organizations across the nation go to www.bbb.org/charity.