When Disaster Strikes, Giving Effectively Often Means Giving Locally
By Rebecca McReynolds
When natural disasters strike, our natural instincts kick in. In the wake of the Asian tsunami and Hurricanes Katrina and Wilma, for instance, the very human desire to help others swept across every economic, social, and cultural boundary. Often, this giving spirit generates a rush of donations, both cash and noncash, in a frantic effort to bring aid to those afflicted. Unfortunately, in the immediate aftermath of disasters such as these, donors can have a hard time determining the most effective way to aid relief efforts.
Making sure your dollars end up where they can do the most good is the paramount consideration. “I call it the ‘destination question,’” says Eric Thurman, CEO of Geneva Global, an international organization that helps private donors and foundations direct their charitable giving. “I want to know how much of the money I give actually reaches the destination that I want to help. Inside the world of charity there is a tremendous amount of opacity. Assets get allocated to items that are classified as program but actually go straight into the organization’s overhead.”
Thurman points to the international relief effort that raised hundreds of millions of dollars to help victims in the immediate aftermath of the Asian tsunami. Estimates indicate that only 20% of the dollars donated will go directly to tsunami survivors, he says. The more locally you can direct your individual donation, the better chance you have of seeing your efforts directly impact the people you are trying to help. “Figure out who is closest to the situation and actually delivering the services,” advises says John Davies, president and chief executive officer of the Baton Rouge Area Foundation (BRAF), which has created several specialized funds in response to the Hurricane Katrina disaster.
For most donors, their first response is to fund the first responders. In the days immediately following Hurricane Katrina, for example, millions of dollars poured into the American Red Cross, which carries a federal mandate to provide first-response aid to stricken areas. In fact, estimates show that the Red Cross collected as much as 70 percent of the hurricane relief dollars collected for the Gulf Coast disaster.
But these first responders are typically in and out of a region within a few weeks, Davies says. After they leave, the long-term rebuilding effort begins. “Rebuilding after Katrina will be a 10- to 12-year challenge for this region,” Davies says. “The local umbrella foundations, such as the United Way and the community foundations, are going to be critical to helping to support the life transitions of these displaced people.”
That’s the reality of any disaster situation. Amy Fackelmann, director of donor services at the California Community Foundation, says her Los Angeles-based organization directs its relief assistance to established local agencies that already have deep roots in the affected areas—and it encourages its donors to do the same. “They know the communities, and they have been working with the nonprofits there for years,” she says. “We try to find organizations that are locally based. In New Orleans, many of the nonprofits based there still can’t even get into their buildings, so we are supporting the regional foundations that are working with those local agencies to get their own infrastructure back up and running.”
Local organizations coordinate a lot of the important work. In response to the Katrina disaster, The Baton Rouge Foundation created two emergency funds, the Hurricane Katrina Displaced Residents Fund and—together with the New Orleans Foundation, which had temporarily moved into its offices—the New Orleans Recovery Fund. (Today the New Orleans Foundation is back in its hometown and is distributing assets in the New Orleans Recovery Fund through a new fund, the Rebuild New Orleans Fund.) John Davies says his organization is delivering much-needed funds to local nonprofits on a biweekly basis and has begun the shift from urgent relief issues such as food, shelter, and security to intermediate-term needs such as education.
In addition to setting up the two emergency funds, BRAF provided $197,000 of its own funds as seed money to start the Louisiana Family Recovery Corps, a statewide case management network for displaced families. Since BRAF’s initial grant, the Corps has received a $32.7 million TANF grant (Temporary Assistance for Needy Families) from the U.S. Department of Health and Human Services’ Office of Family Assistance. The foundation has also joined forces with state and local agencies to provide support and information. Through FoundationsforRecovery.org, an Internet portal, BRAF reports to its donors and the community at large on its Hurricane Katrina relief efforts.
Sorting the Options
Of course, giving locally is easier said than done for many donors, who must make their giving decisions from afar: they don’t know the local providers and have limited access to information. And dozens of new organizations invariably pop up in the aftermath of a disaster. Consider the Bush-Clinton Katrina Fund. There’s no better way to endorse an organization than to attach the names of two former U.S. presidents. But despite raising millions of dollars, fund organizers are still trying to determine how they are going to decide who will get grants. The organization doesn’t know the territory or the people, and it doesn’t have the deep relationships with local agencies that a community foundation can provide, Davies says.
Not all of the new organizations are necessarily reputable, either. “Just like clockwork, any time there is a natural disaster, there are people who want to take advantage of it,” cautions Carol Venella, Vice President, Better Business Bureau Serving Southeast Florida and the Caribbean. There are several resources available to help you screen solicitations, including the Better Business Bureau’s Wise Giving Alliance. It sponsors give.org, where you can download reports on myriad U.S.-based relief organizations.
To ensure that your contribution is tax-deductible, you can check out the organizations that are eligible to receive tax-deductible contributions by reading Publication 78 at IRS. Generally, individuals are limited to deducting 50% of their adjusted gross income to charity. But under the provisions of the Katrina Emergency Tax Relief Act of 2005, donors may deduct up to 100% of certain types of donations made between Aug. 28 and Dec. 31, 2005, subject to specific restrictions. Consult your tax advisor for more details.
And when thinking about how to make a difference in the wake of a disaster, keep in mind that giving locally is often the best way to create a lasting impact. “We have been working in our community and giving money to this community for 40-plus years,” says Davies, reflecting on the strengths of the Baton Rouge Area Foundation. “This is where we work. This is where we breathe.”
Rebecca McReynolds is a freelance writer specializing in wealth management and philanthropy.