With the creation of scores of new funds to collect money to help the
individuals and families harmed by the September 11 terrorist attacks,
legal authorities and charity watchdog groups are concerned about the
potential that donations are being collected fraudulently.
Already, the Federal Bureau of Investigation is investigating a mass
e-mailing that was sent out shortly after the terrorist attacks that may
have been a scam.
Charity-watchdog groups have been warning donors about the need for
caution in giving. "People in their despair are throwing money at
organizations, but people really need to be careful," says Daniel
Borochoff, president of the American Institute of Philanthropy, in
Bethesda, Md., a group that grades nonprofit organizations on how much
of their budget they spend on services and other criteria.
Says Art Taylor, president of the Better Business Bureau's Wise Giving
Alliance, in Arlington, Va." "People start these efforts with good
intentions, but not necessarily the skills to manage the organizations."
New funds should provide potential donors a budget, a list of the board
of directors, and written materials that outline how the money will be
spent, he says. He notes that many of the relief groups have sprung up
so fast that they may not have all those items available, but says that
in the least they should be working to have them ready for the public.
Mr. Borochoff also has several tips: