Mellody Hobson: How to Help Hurricane Katrina Victims

According to preliminary estimates by Munich Re, the world's largest reinsurer, Hurricane Katrina caused $15 billion to $20 billion in insured damages. This amount rivals the damage caused by Hurricane Andrew in 1992 -- the largest hurricane to hit the United States -- which caused $21 billion in insured damages. To put this amount into context, in 2004, four hurricanes -- Charley, Ivan, Frances and Jeanne -- produced $23 billion in combined damages with Charley being the costliest of the four with $7.5 billion in damages.

What can I do to help?

Most relief organizations are soliciting monetary donations as money can be dispatched quickly to devastated areas. For example, many relief organizations will be issuing cash vouchers to victims. That said, with literally thousands of relief organizations worldwide, trying to find one that meets your specific criteria can be daunting. The Internet is a great place to begin your search, but be warned -- a Web address is not a guarantee of legitimacy. In an effort to provide a safe and straightforward way to find legitimate organizations on the Web, the federal government -- specifically the U.S. Agency for International Development and the U.S. Department of Health -- sponsors a site with links to agencies dedicated to the relief efforts. This Web site, www.usafreedomcorps.gov, is an excellent starting point. You also may want to visit the following sites which provide a variety of details about thousands of charities, such as the individual goals of a charity, its tax status as well as financial data.

American Institute of Philanthropy: www.charitywatch.org.

BBB Wise Giving Council: www.give.org.

Charity Navigator: www.charitynavigator.org.

GuideStar: www.guidestar.org.

The Internal Revenue Service: www.irs.gov.

Although charity watchdog groups vary slightly in terms of their rating processes, they generally suggest that you seek out charities that spend at least 65 percent of their total expenses on program activities with the remainder going toward fundraising and administrative expenses.

Can I send things or just money?

If you are looking to help, it is best to make a monetary contribution rather than donate goods. While victims may be in need of items such as blankets, clothes and food, actually transporting these goods to the right places can be very difficult and may clog up other efforts. That said, your gift of money does not require a pickup or shipment and enables relief organizations to use your donation where it is most needed. When making a monetary donation, do not send cash. Rather, to make sure you get the biggest bang for your buck, consider writing a check directly to the relief organization. Although credit card donations are also accepted, when you make a contribution with plastic, banks receive a transaction fee from the organization which averages from 3 percent to 5 percent of the total contribution.

What if I want to go help in person?

While volunteer assistance is needed, do not be a renegade volunteer as you may put yourself in harm's way and/or hamper rescue efforts. Rather, if you want to volunteer your time and efforts, contact a volunteer agency, such as your local American Red Cross chapter, which will be coordinating efforts related to the cleanup, home repairs, medical care, shelter, food and childcare.

Besides volunteering and making cash donations, is there anything else I can do?

If you live in neighboring areas that were not devastated by the hurricane, you may be able to provide assistance in other forms, such as shelter or transportation. While it is best to offer this assistance through a relief organization that can coordinate all efforts, some generous people are offering beds in their own homes on the Craig's list Web site.

How can I avoid scams when making a donation?

When disaster strikes, many individuals want to help those in need by giving donations to aid organizations. Unfortunately, scam artists recognize this altruism as an opportunity to make money by approaching unsuspecting people. As such, it is critically important to research the organization to which you are giving money and be wary of some red flags. Here are some simple steps to take to avoid being scammed:

Ignore solicitations: First and foremost, like legitimate solicitations for aid, fraudulent requests can come in the form of e-mail, telephone or door-to-door contact. Therefore, be sure to request written material from the soliciting organization before agreeing to give money. Never reply back to an e-mail soliciting your help for tsunami victims if they require you to send your bank information and Social Security number. However, please note that the American Red Cross is sending e-mails to people who have made previous donations.

Take your time: Steer clear of any solicitor or organization that plays on your emotions and pressures you to make a quick decision about giving.

Confirm tax-deductible status: If you want your contribution to be tax-deductible, be sure to confirm the tax status of the aid organization. That information is available on the Internal Revenue Service Web site, www.irs.gov. In order to claim the deduction, the organization must be classified as tax-exempt under section 501(c)(3) of the Internal Revenue Code.

Provide a secure contribution: If you decide to give online via credit card, exercise caution and make sure you are giving through a secure site. Alternatively, consider making donations via check or money order payable to a specific organization. Do not give cash.

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