If anything showed the awesome power of the Internet to do good, it was the immediate aftermath of the September 11 terrorist attacks. In the first week after the disaster, six Web sites raised $57 million in disaster relief donations.
More millions came in to other sites. The amounts are staggering, considering that the largest amount raised online for any previous disaster was $2.5 million. At a time when millions of people wanted to do whatever they could to help, the Internet offered an instantaneous way for individuals to register their compassion.
Unfortunately, the days following the attacks also showed that the Internet provides a safe haven for some of the most despicable con artists imaginable. Scant hours after the tragedy, news agencies reported that scam artists were already using junk e-mail to solicit contributions supposedly earmarked for the families of victims of the tragedy. Links in one spam message sent readers not to the American Red Cross site, as advertised, but to the scam artists' own site, where the wrongdoers collected money and credit card numbers from unsuspecting donors.
The online response to the disaster showed just how comfortable people have become with donating online--a development that won't be lost on legitimate charities or on con men. As we enter the season of giving, your greatest challenge may be to distinguish one group from the other.
Fortunately, the Internet puts numerous resources at your fingertips to help make your research quick and easy. So whether you want to support relief efforts in New York City or make your aunt's holiday present a donation to her favorite cause, take the time to check out who's really getting your money--and exactly what they're using it for.
The first step may be to find a charity to support. Suppose you'd like to help literacy programs in your home state, but you don't know where to direct your contribution. Try visiting Helping.org or JustGive.org. Both sites (which are run by nonprofit organizations) maintain databases of hundreds of thousands of national nonprofit organizations, searchable by area of focus, city, and state. They also provide information on volunteering.
Being listed at one of these sites, however, doesn't guarantee that a charity will use your contribution efficiently. Though the sites require that the charities they list meet certain standards, such as filing the IRS's Tax Form 990 (which most tax-exempt nonprofit organizations must do), they generally don't have the time or the resources to police each group's business practices, and in most cases they don't endorse specific charities. It is up to you to decide which of the groups will make the best use of your contribution.
How do you make that decision? Start by visiting the charity's own Web site. A good nonprofit site should offer a concise mission statement that clearly describes what the organization does, specifies how it does it, and explains how your contribution will be used.
"Ideally, at least 50 percent of your contribution should go to programs and activities that are directly related to the organization's purposes, and no more than 35 percent of its contributions should go to fund-raising," says Bennett Weiner, chief operating officer of the Better Business Bureau's Wise Giving Alliance, a watchdog organization that collects and posts information about the business practices of charities. If the organization's Web site does not offer financial information, call and request financial statements and an annual report; all nonprofit groups are required to provide such documents to the public.
Look for full contact information on the charity's site, including a street address, e-mail links, phone numbers, and names of principals. Make sure the site includes a privacy statement, including an opt-out feature if you don't want to be contacted later. If the site accepts donations online, make sure it has 128-bit encryption.
A great source of information on charitable organizations is the Wise Giving Alliance's charity reports index, which offers detailed individual reports on hundreds of charities and nonprofit organizations. The Council of Better Business Bureaus, in affiliation with the Wise Giving Alliance, has developed a 23-item list of Standards for Charitable Solicitations, which is intended to "promote ethical practices by philanthropic organizations."
The list covers such areas as how accountable an organization is to the public and how it raises and uses funds. Each report listed in the charity index includes an evaluation of whether the organization meets CBBB standards (when a group falls short, the report explains why).
You can also find detailed financial information--including data on revenues and expenses and copies of IRS Tax Form 990--at GuideStar for each of the more than 700,000 IRS-registered nonprofit organizations. While the information can be dense, GuideStar provides a primer on how to read and interpret its reports, including Tax Form 990.
The American Institute of Philanthropy grades participating charities from A to F, based on the amount the organization spends on charitable programs versus fund-raising and administrative costs. The site also issues warnings about reported charity scams and misuse of funds.
If you're tempted to give to a charity you've never heard of, here are a few other tips to keep in mind:
- Be very suspicious of spam requests for donations. Few
legitimate charities seek contributions through unsolicited e-mail.
- If
you do respond to an e-mail solicitation, be wary of internal links. If the
link says it will take you to the United Way, for instance, make sure you end
up at that organization's site and not at a look-alike site set up by
scammers.
- Beware of copycat charity names. A common trick of charity
scammers is to come up with names that sound similar to well-known, legitimate
charities. For example, scammers might set up shop under the name Red Cross of
America, hoping to draw donors who mistake them for the legitimate American Red
Cross.
- Be wary of vaguely worded appeals that don't provide specific
information about what the charity does.
- If you have any doubts about
an organization's legitimacy or solicitation practices, contact your
state attorney general's
office to find out whether the charity is registered and
licensed in your state. You can file complaints with the
Federal Trade
Commission, the BBB
Wise Giving
Alliance, and the
National Fraud Information
Center.
Of course, most charities are honorable, high-minded organizations, and your contributions really can help make the world a better place. So this holiday season, give generously--but wisely.
Anne Kandra is a contributing editor, Grace Aquino an associate editor, and Andrew Brandt a senior associate editor for PC World.- Page 1 of 3
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