I was recently driving down the Loop 101 while listening to the news on the radio.  It was reported that, due to the devastating earthquake in Haiti, the Red Cross was in desperate need of supplies.  Monetary donations were being requested.

The skeptical auditor in me immediately thought of all of the potential charity scams that will unfortunately pop up at a time like this.  We’ve seen it too many times in the past – with 9/11 or Hurricane Katrina, for instance.  Sure enough, I got back to my office, turned on my computer, and had this online article in the Phoenix Business Journal practically jump in my lap.

It’s a shame that peoples’ concern and generosity would be taken advantage of, but it’s something to keep in mind when making a donation.  This article, with information provided by the Better Business Bureau, gives some great pointers on how to avoid being defrauded.  The most important thing you can do is KNOW where your donation is going.  Charities created overnight in response to a crisis concern me, as do some online donation forums.  That’s not to say you shouldn’t go to redcross.org to donate, but it should be initiated by you directly (not by clicking on a link from an email or a blog.)

By using caution when donating to a relief cause, your money has a much better chance of making its way to the people who need it most.

Jessica Puckett, CPA, CFE