Mellody Hobson: Make Your Contribution Count
Sept. 25, 2005 — -- Americans responded quickly to Hurricane Katrina, donating $1.2 billion to relief efforts in the four weeks since the hurricane struck, according to The Chronicle of Philanthropy, with 70 cents of every dollar going to the Red Cross.
Now, the victims of Hurricane Rita need help. And that's where things can get complicated.
Q. Americans have given $1.2 billion to Katrina relief agencies. Do they have enough?
A. No, we've never seen anything quite like this -- nothing to this scale. The Red Cross estimates resources will be needed to provide up to 4 million people with meals, shelter, financial assistance and other services. In fact, the Red Cross has said the Hurricane Katrina relief effort will be the most costly in history. Now, with Rita's devastation, we could expect to see millions, if not billions, needed to assist those in Texas and Louisiana, as well. Initial estimates assess the damage from Hurricane Rita to be around $5 billion.
Q. With the new devastation of Hurricane Rita, will those donations for Katrina go to help pay for it?
A. If you have already sent money to Hurricane Katrina relief funds, that money will not go toward Hurricane Rita victims. In fact, state laws restrict the use of charitable funds to their designated purpose. The Bush-Clinton Katrina fund, for example, has already said the dollars raised will go specifically to the victims of Hurricane Katrina.
Q. Is there any way to know for sure that donations will get to victims of Hurricane Rita, as opposed to another disaster?
A. The best ways to make sure your donations are going to a specific relief effort are:
1. Ask the charity for information on where your money will be used.
2. Earmark your contribution to the designated relief fund of your choice. For example, the American Red Cross' Web site allows donors to select from a number of options, including Hurricane Katrina and Hurricane Rita relief.
3. If paying by check, clearly write on the memo line of your check the specific relief fund you want your money to aid.
Mellody Hobson, president of Ariel Capital Management (arielmutualfunds.com) in Chicago, is ABC News' personal finance expert. Matthew Yale and Aimee Z. Daley contributed to this report.
