Unspent Virtue

March 1, 2010       Mark Hrywna      

When catastrophes strike, Americans whip out their well-worn credit cards and checkbooks. They give millions of dollars within days – sometimes hours – of a tragic event. The money flies back out the doors of charities to help in recovery efforts. Yet, tens of millions of those compassionate dollars remain unspent and idling in bank accounts designated for that specific cause which might or might not need it anymore.

The rebuilding efforts in Louisiana and Mississippi after Hurricane Katrina in 2005 and in Southeast Asia after the Indian Ocean tsunami in 2004 continue with the help of some of the nation’s largest agencies, such as the American Red Cross and The Salvation Army. Other organizations, such as MAP International, saw relief efforts transform into permanent operations in Asia. The American Red Cross (ARC) in Washington, D.C., has approximately 10 percent of the $581 million it raised for tsunami relief remaining, with plans to conclude programs this year. Almost $106 million, about 21 percent, went toward emergency response but nearly half went toward “shelter” and “health,” according to ARC’s five-year report on its Tsunami Recovery Program.

In addition to the tens of millions still to be spent in Asia,  ARC has more than $12 million remaining in Hurricane Katrina relief funds and even $1.4 million in its Liberty Fund in response to the September 11 terrorist attacks. The relief agency generated $1.1 billion and $2.1 billion, respectively, for those two events. The majority of the cash was raised within the first three months of the events, according to Laura Howe, senior director, disaster public affairs. For the past several years, Howe said the organization has been funding community organizations still focused on helping survivors and families of the terror attacks. The remaining funds will be distributed to select grantees. Almost two-thirds of the September 11-related dollars went directly to families of survivors and those most seriously injured, she said. Nearly all of the funds contributed have already been spent in accordance with donors’ wishes and the plan developed by (Ret.) Sen. George Mitchell. The final 0.10 percent of funds was to have been spent last year, Howe said, but some grantees were unable to use the money given them and returned some of the funds. She said the organization would distribute funds to selected grantees this year.

In the southeast, approximately $4 million in designated donations from major donors will help build the capacity of Gulf Coast chapters to respond to future disasters, Howe said. Another $8 million remains in the Hurricane Recovery Program, which continues case management and community recovery efforts in southeast Louisiana and south Mississippi. Mental health services were a big component of the hurricane and September 11 programs, she added. An estimated 70 percent of Katrina contributions went directly to help survivors buy clothing, medicine, gasoline and other essentials, Howe said. The ARC plans to spend down nearly all of the funds by the end of its next fiscal year, June 2011.

By comparison, ARC raised $203 for Haiti (as of Feb. 1), with more than half coming through online giving and $30 million of it through text messaging. The Salvation Army generated about $92 million in response to the September 11 terrorist attacks, and “every penny has been spent,” according to George Hood, national community relations secretary.  As the Alexandria, Va., organization completed work in Washington, D.C., and Shanksville, Pa., remaining resources were sent to New York City.  At one point, The Salvation Army set up permanent offices at Ground Zero and provided housing and funding for small businesses to reopen. In the final year (2004), the bulk of the work was mental health and counseling services.

The Salvation Army had $382 million in donations in response to Hurricane Katrina and $24 million for the Asian tsunami in 2004. Hood estimated about $13 million remains from Katrina, all earmarked for rebuilding homes, with about half of the $382 million spent in the first year.  The remaining funds are allocated and the organization is still building homes, which is expected to continue for the next couple of years. About $50 million has been spent in the past two years helping community groups rebuild their neighborhoods, he said. Similarly, less than $3 million remains for building housing in tsunami-affected areas. In any disaster, Hood said The Salvation Army works in the region until contributions are used up. “We will do long-term relief as long as the resources hold out,” he said. Fundraising for the response to hurricanes in the Houston area two years ago was very slow, he said, and the organization spent a few months in the region. About $11 million was raised and spent within several months, “not because there was not work to do but we just ran out of resources,” Hood said. “We mobilize, respond and operate on whatever money the American public will send us,” he said.

Although its final report on the tsunami response was completed after three years, World Vision in Federal Way, Wash., is among the organizations still putting some finishing touches on its work in Southeast Asia. “There’s still a little more to be done; we’re using our ongoing funding,” said Randy Strash, strategy director, emergency response and disaster mitigation. The majority of money raised for the tsunami was done in the first three months, but Catholic Relief Services in Baltimore, Md., continued to receive gifts, partially from church sources during the next 12 months.

Of the $170 million CRS generated, about half was from churches and dioceses in the U.S. The organization stopped soliciting after three months because it had met its needs. “I’m not sure if the same thing will happen for Haiti because that’s a much poorer country,” said Mark Melia, deputy vice president of charitable giving at CRS. The needs after the tsunami were more for rebuilding. About $6 million remains to be spent in tsunami rebuilding funds. Most charitable contributions come in the first several months following a disaster, but they also might continue to trickle in over the years.

Katrina was a unique situation because donations continued to pour in for months, Hood said. “We’re still getting donations marked Katrina, not large, but people every month might write a check and send it for $20, $50. We don’t get a lot of that, but they are sporadic,” he said. The Salvation Army only solicits contributions within the first two or three months of a disaster. “We simply don’t drag that on and on. The diversity of our services prohibits that,” said Hood. Only inactive or lapsed donors were targeted for e-grams for Haiti relief since it was just coming off The Salvation Army’s Christmas giving season.

World Vision raised $68 million in the year after the tsunami, followed by $4 million and $2 million in the next two years, respectively. “People were just giving because they knew we were still operating the programs,” Strash said. For Haiti, World Vision is aiming to raise $40 million to $50 million from private funds, in addition to possible government grants and major foundation grants on top of that. “There’s a real peak in the first three to six weeks then the giving rate slows down dramatically,” Strash said. “Obviously there’s a long tail of private funding just like the tsunami,” he said.

World Vision plans to make periodic appeals especially to regular supporters “because they’re with us for the long haul,” he said. For the general public, “it’s pretty much now or never,” he said during an interview 10 days after the Jan. 12 earthquake in Haiti. Donors who gave during the initial flurry of contributions will be asked to consider a second gift in a few months, as World Vision reports back on their first gift, Strash said. The charity also will send a focused appeal to its own donors, as well as to corporations and foundations, centered on food distribution or housing reconstruction.

Strash can see the relief effort in Haiti following a similar pattern, with five stages of response, from emergency relief and temporary housing, to economic recovery and finally rebuilding infrastructure, housing and schools. “The first four stages probably will be completed or initiated in the first year while the last stage probably takes two years,” he said. There was a funding gap in Haiti before the earthquake struck, according to Caryl Stern, president and CEO of the U.S. Fund for UNICEF. The organization received $30 million in cash and pledges within a week of the disaster, all of which will go for the relief effort and eventually toward rebuilding. The organization had about 100 staff on the ground, with a presence in Haiti since 1949.

“We’re going to fund Haiti and continue to raise money until the country is able to sustain itself,” Stern said, including infrastructure that could have saved lives in the disaster. All contributions for the tsunami have been fully distributed, but the U.S. Fund for UNICEF is still working in tsunami-affected nations, while some dollars were given to organizations for multi-year projects. “Tsunami funds went right out the door for us. Many countries were below the poverty line. Many countries in the tsunami zone we continue to fund,” Stern said.

“The unique thing for us to understand, being part of the U.N. (United Nations), we’re part of the country plan. So it’s a piece we’re going to be responsible for, not what we might be responsible for. If it’s part of the U.N. plan, like the water system, I know I need this much money.” In Indonesia, MAP International’s relief effort turned into a rebuilding effort, with a long-term development program. “We have staff and health development programs on the ground in Indonesia that we didn’t have before the tsunami,” said CEO Michael Nyenhuis. “Partnerships in our relief work there led us to continue our work beyond relief work,” he said, such as training village health workers and programs to combat tuberculosis (TB).

“The tsunami was a good example of taking one strength of ours and having that lead to another, going from medical supply work to long-term development,” said Nyenhuis. The Brunswick, Ga.-based nonprofit built a hospital in an area where most health services had been wiped out and turned it over to a local partner organization to operate. “Certainly having the availability of the funds given for the tsunami allowed us to move from relief to rebuilding, and we found other funding to go from rebuilding to development,” Nyenhuis said. He expects a similar situation in the Haiti effort, where it’s had a presence for 40 years. Direct Relief International (DRI) foresees a long-term need for prosthetics in Haiti, in the same way there was a need after the 2005 earthquake in Pakistan. “Work will have an eye toward long-term health and sustainability,” said DRI Spokesman Jim Prosser, so grants might help to build, or rebuild, prosthetic and orthopedic resources.

Whatever funding that DRI does not need for programs, it makes cash grants to partner organizations. The Santa Barbara, Calif.-based organization has been working in Haiti since 1964 with local partners. Within a week of the earthquake, DRI raised about $2 million, a little behind the pace of tsunami or Katrina fundraising. The vast majority came via the Web and fundraising continues, according to Prosser. Among the biggest takeaways for the ARC from past disaster responses like Katrina is partnering with other organizations. The ARC, created in the late 19th century by Congressional Charter, was at times criticized for its Katrina response and its initial handling of donations to September 11.

“We’re looking at those partnerships early on, instead of later in the game,” said Howe. A portion of funds raised are relayed as grants to other partner organizations that are screened by the ARC. The percentage varies by disaster but about 44 percent of Katrina funds were given as either grants or through other organizations to survivors, and after September 11, it was about 50 percent. “It’s a priority for us to find other organizations that also share our mission, that we can help provide resources to,” she said. For instance, the ARC has awarded a $30-million grant for the United Nations’ World Food Programme (WFP) as part of relief efforts in Haiti. “It’s about meeting needs and making sure that the help gets to people who need it in the fastest way,” Howe said. “If that means we can help granting money to another organization, we’ll look at doing that. It’s never a question of whether or not we have money in the end or money that’s left over, but how can we get help to people in most efficient way possible.”  NPT

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