Following the Katrina money trail

Lisa Myers Senior investigative correspondent • Profile

WASHINGTON - Money is still flooding into the Red Cross, as overall private giving for Katrina survivors soars to record levels. But how can Americans be sure all that money actually gets to the victims?

The Red Cross promises almost all its donations will go to feed and house victims and fuel emergency relief vehicles.

"Of every dollar that goes to Hurricane Katrina, we guarantee that 91 cents of that dollar goes to the delivery of disaster relief," says Lauri Rhineheart, the director of disaster fund-raising at the Red Cross.

In New Jersey, independent analysts at the company Charity Navigator check the financial statements of 4,600 charities. How much goes for fund-raising and administrative costs? How much actually helps victims? The Web site then rates charities for efficiency and overall performance."If you can find a charity that will spend 75 to 80 cents of your dollar on their charitable purposes," says Charity Navigator’s Trent Stamp, "you can probably trust them."

But what about the list of charities recommended by the Federal Emergency Management Agency?

The Red Cross and a few others get high marks, but B'nai B'rith — a Jewish charity — gets a low rating because analysts found only 56 cents of every dollar goes to relief activities, the rest to fund-raising. B'nai B'rith disputes the methodology.

Many of the religious organizations listed by FEMA disclose so little they can't even be rated.

"This is just another area where they screwed up," says Richard Walden, the head of Operation USA — a top-rated charity not on the FEMA list. 

Walden questions why what he calls a controversial charity, Feed the Children, was recently added to that list.

"They've had problems in the past," says Walden, "with money and the handling of money and how they spend money."

Feed the Children says their spending practices are sound.

So how can you be sure your money is well spent? Experts say beware of e-mail or door-to-door solicitations and of Web sites with addresses that end with dot-com. Most legitimate charities, they say, are dot-org.

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