Donation Danger! Proceed with Caution!

Guest Post by Stephen Pedneault, CPA, CFF, CFE

Each time a tragedy strikes in the world, many people feel a strong sense of wanting to help the victims in any way possible.  There is a huge outpouring of support from around the globe comprised of financial and non-financial support.

As seen with Katrina, the tsunami and September 11th, many avenues are typically established for people to provide financial support (donations) to help the victims and rebuild the affected regions.

Unfortunately, not all charities are created equally (or with similar intentions).  Each time such a tragedy strikes, there are individuals who set-up what appears to be legitimate charitable organizations seeking your funds, only to learn your funds never reached the victims.  Rather, these organizations are found to be nothing more than scams established to steal your funds, preying on your emotions and vulnerabilities.  Certainly these occurred in response to Katrina, the tsunami, and September 11th.

Sadly, over a week ago the country of Haiti fell victim to a major earthquake followed by many aftershocks.  Port of Prince was all but destroyed, leaving hundreds of thousands without shelter, food and water.  In response, charities have already cropped up seeking your funds to aid Haiti.  Although too soon to prove, it is likely some of those "charities" are nothing more than scams seeking to divert your funds for personal use.

Congress is working to pass a bill to allow your donations made in 2010 to the Haitian relief effotrts to be tax deductible in tax year 2009.  We'll have to watch to see if that actually happens.

In the meantime, please be sure to research any organizations you are considering before sending any funds.  Stick with the major charities that have been around for years providing relief around the globe.  Avoid smaller, recently established charities created solely to help the Haiti efforts.  There are several well-known organizations worthy of donations—Red Cross, Americare, CARE, Feed the Children and Habitat for Humanity to name a few.

You work hard for your money, and with the state of the global economy and limited funds available, every dollar counts.  If you find yourself in a position to provide support to Haiti, please be sure your funds will actually benefit the victims affected in Haiti.

Stephen Pedneault, CPA, CFF, CFE

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