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Donor beware: Disasters like Sandy bring out the fraudsters in droves

By , - Last modified: March 4, 2013 at 6:13 AM

A natural disaster like Hurricane Sandy inspires the open-handed generosity of donors, who in their zeal to help the victims can easily be taken in by con artists.

Last month, New Jersey Attorney General Jeffrey S. Chiesa sued the operators of the Hurricane Sandy Relief Foundation, for allegedly diverting donations to their own accounts while posing as a government-registered charity. Chiesa said in a statement the group raised more than $631,000 from nearly 2,000 people, and disbursed less than 1 percent to Sandy-related causes.

"We will not permit profiteers to deceive the public with deceptive appeals for charitable donations," Chiesa said in the announcement. According to the state, the group's website conveys the mistaken impression that it's affiliated with the Hurricane Sandy New Jersey Relief Fund — a legally registered charity headed by first lady Mary Pat Christie.

"Disasters are when the scammers and thieves really come out," said Ken Berger, chief executive of Glen Rock-based Charity Navigator, which evaluates the financial health, accountability and transparency of 6,000 of the largest U.S. charities.

"There are millions, if not billions, of dollars in disaster money, and the donors are making fast decisions and give more impulsively than normal," Berger said. "It is a tremendous opportunity for someone with a sound-alike name and a website they throw up overnight to start pitching. People want to act fast, and they don't do their research."

Charity Navigator's website, charitynavigator.org, lists more than 40 charities the group recommends to donors who want to help the Sandy recovery effort.

"People give from impulse, especially in a disaster, and a little research can go a really long way in maximizing the chance that you are going to give to a high-performing, mission-driven organization, rather than to one that is either a scam or not performing well," Berger said.

E-mail to: beth@njbiz.com
On Twitter: @bethfitzgerald8

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Beth Fitzgerald

Beth Fitzgerald

Beth Fitzgerald reports on health care, small business and higher education. She joined NJBIZ in 2008 after a 34-year career at the Star-Ledger and has been reporting on business in New Jersey since 1978. Her email is beth@njbiz.com and she is @bethfitzgerald8 on Twitter.

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