Tips and Advice Before Giving Money to Tsunami Effort

There has been an outpouring of relief funds for victims of the Dec. 26 tsunami. In fact, according to the United Nations, countries from around the globe have already pledged $3 billion to $4 billion in aid -- equating to about $400 per person for more than 5 million affected by the disaster.

Here in the United States, individuals have given hundreds of millions of dollars to charitable relief organizations with the number continuing to rise. Here are some important tips to follow before you make a contribution:

Go to www.usafreedomcorps.gov on the Internet.

The Web is an excellent resource to find an organization right for you. However, be warned that a Web address is not a guarantee of legitimacy. In fact, immediately after the tsunami disaster, a Canadian college student posted the domain tsunamirelief.org on eBay with a starting bid of $50,000. As a means 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, set up this site with links to agencies dedicated to the relief efforts. There are 77 charities listed on the site.

With literally thousands of relief organizations worldwide, searching for one that meets your specific criteria can be daunting. You should seek out charities that spend at least 65 percent of their total expenses on program activities with the remainder going toward fund-raising and administrative expenses. That said, here are some good choices:

The American Red Cross: This organization has been around since 1881, and with 36,000 employees and 1 million volunteers, no agency is better equipped to handle disasters of massive scale. According to Charity Navigator, a nonprofit organization that provides information on charities, the American Red Cross spends 91 percent of its donations on programs. As of date, the American Red Cross has received more than $92 million in tsunami donations.

United States Fund for the United Nations Children's Fund (UNICEF): UNICEF is strictly devoted to helping children in need and crisis. It has more than 7,000 people in 157 countries working for this cause. UNICEF gives specific details of what your donation will mean for victims of the tsunami disaster. For example, a donation of $5 can provide an emergency health kit for one person for three months; $87 can provide a basic family water kit for 10 households, with detergent, soap, wash basin, towels, bucket and water purification tablets; and $188 would provide enough money for education supplies for 80 children. According to Charity Navigator, the U.S. Fund for UNICEF allocates 88 percent of its revenues toward programs.

Oxfam America: Founded in 1970, Oxfam America employs more than 170 individuals and seeks to create lasting solutions to poverty, hunger and social injustice. According to Charity Navigator, 76.9 percent of this organization's overall expenses go toward program expenses.

Save the Children: Founded in 1962, Save the Children employs more than 3,300 people and aims to create real and lasting change in the lives of children in need. According to Charity Navigator, 90.9 percent of this organization's overall expenses go toward program expenses.

A Word of Caution

Some legitimate organizations have raised sufficient funds for their given efforts and are no longer earmarking donations for tsunami victims. For example, Doctors Without Borders has requested that people stop sending money for the South Asian tsunami victims. As an alternative, they are requesting that donors give to its general Emergency Relief Fund, which enables the organization's humanitarian work in more than 70 countries worldwide. This is the first time the organization has issued such a request.

More Tips

Pay with a check.

To make sure you get the biggest bang for your buck, consider writing a check directly to the organization instead of paying with a credit card. 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. Some British banks and credit card companies have agreed to waive charges on donations to charities raising money for the Asian tsunami disaster. Whether or not those in the United States will do the same remains to be seen.

Get the deduction.

A donation to a tsunami relief fund may entitle you to a tax deduction if you itemize your income taxes. The contributions for victims of the tragedy are tax deductible if they are qualified as tax-exempt under Section 501(c)(3) of the U.S. Internal Revenue Code. Only in cases where you donate directly to a foreign-based charity would you be unable to take a deduction.