Unspent Virtue: Disaster Funds Still Not Depleted

I read an interest article in the Nonprofit Times about prior disaster relief funds which still have money in them.

Some examples:

--The America Red Cross (ARC) has 10% of its 2005 tsunami disaster relief money still remaining. How much money is that, you ask? Well, 10 percent of $581million would be $58.1 million.

--The Salvation Army has a little less than 12% of their tsunami relief fund left to spend from the money that was raised after the Southeast Asian tsunami of 2004. That 12% is a nearly $3 million.

--The ARC also has $1.4 million left in their Liberty Fund -- they have already distributed the $2.1 billion that was donated to that fund. The catalyst for that one? The 9/11 terrorist attacks of nearly 9 years ago.

I remember speaking with some of my then-clients right after 9/11, when the ARC had a public relations nightmare on their hands in regards to how they had handled much of the donations, and that most of the donations had not yet been distributed months after the attack. One person explained it to me this way, and I liked her way of thinking.

As a humanitarian organization, the ARC wants to plan for the highest and best use of the charitable dollars for the victims of 9/11. Let's say that 5 years after the disaster, they determine that much of the population living in lower Manhattan is developing a horrible lung disease as a result of breathing in all of the debris that was in the air weeks after the disaster. But now those dollars are spent and gone, and there is no money to help these people. Is that a better use of the charitable dollars than making millionaires of the survivors of 9/11's victims?

Where does the responsibility of the city and state begin and end in terms of the response to the attack? Should the ARC re-imburse the city for the use of their equipment to respond to the disaster, to use those charitable dollars to relieve a potential tax burden from the populace for the great expense that was incurred that day?

Outside of the immediate needs of food and shelter for victims, sometimes it takes a while for the true cost of a humanitarian crisis to be known. Responsible charities want to make sure they are using those dollars to ease the greatest need, but sometimes those needs aren't readily known. Not that I'm saying that the ARC is the most responsible one out there, but because of the amount of money involved they are under greater scrutiny, some deserved and undeserved.

As Laura Howe, Senior Director, Disaster Public Affairs of the ARC said in the Nonprofit Times article, "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.”

The case for unrestricted funding

Trust. It's at the heart of charitable giving.

Abuse by some nonprofits have lead to a high level of mistrust of nonprofits by the very donors they rely on. This is why donors are demanding that they be able to better direct where their charitable dollars go. Instead of going to a general operating fund, which donors often interpret to mean "the CEO is going to give himself a big fat bonus," they want their funds to go to exactly the cause they wish to support.

Thus the reason why the American Red Cross is currently swimming in approximately $100 million in their International Response Fund. These are dollars that were raised in response to the Haitian earthquake crisis.

That's good news for Chileans.

Now an 8.8 magnitude earthquake has hit Chile, and while, as this article in the Pittsburgh Tribune Review points out, Chile is in a better position to respond to this disaster, there is still a need for an international response. People have already opened their wallets to give in response to Haiti; there are fewer who are willing to give as generously to respond to another natural disaster on the heels of the first.

Now the American Red Cross can divert the funds initially raised for Haitian relief to fund Chilean relief -- immediately. After all, donors gave to the "International Response Fund." While this money was raised under the pretext of use in Haiti, it can easily be sent to aid another country suffering another natural disaster.

Imagine the pickle the ARC would have been in had the funds been restricted to use ONLY in Haiti. They would have had to contact each and every donor and ask permission to divert funds to Chile, a time and resource-intensive endeavor, one which would not have been a good use of their charitable dollars. And what would ARC have done with $100 million in Haiti? What is the true cost of responding to a natural disaster? Does the ARC have the resources to occupy the country for years, to help re-build its intrastructure and systems, to improve it better than that which existed prior to the earthquake? Does that kind of response exist within their mission, their charter? I suspect not.

Helpings with your own two hands

In January when Haiti was hit with the massive earthquake that killed thousands and destroyed many more people's worlds, my daughter Lindsey was personally impacted by the media coverage of the tragedy. Any time she watched a snippet of the news she would comment on how sad she was for the people of Haiti and how she wished she could help.

Eventually she saw the messages to text a donation to Haiti, which we did, and she felt good about helping them -- for a while. Two days after we texted the donation she asked when our money was going to make a difference, because she was still seeing video of families suffering and of children dying. If you think 20-year-olds today want instant gratification, you haven't talked to any 6-year-olds lately.

So I told her that while we couldn't go to Haiti ourselves to help them, we COULD do something for all the people here in Minnesota who don't have enough to eat, by volunteering to help serve a meal at a local Loaves & Fishes site. A friend of mine organized the volunteer efforts to serve dinner to people who are what Feeding America calls "food insecure," meaning people who are struggling to put food on their table. At Loaves & Fishes you don't have to be on welfare, you don't have to be unemployed, you can just show up and eat, no questions asked. We signed up and last night we served the dinner.

We arrived about 15 minutes after they had begun serving the dinner meal. We put on plastic aprons, hairnets and gloves and got to work. First Lindsey got to dish out pudding -- after a while she handed out bananas while I served up salad. She had a smile on her face and loved every minute of the experience. She got to see people from all walks of life -- families with young children, elderly people and homeless people. She smiled at every one and took their comments in stride, when they told her how nice it was to see such a young person there helping out. She even spoke to a few, an amazing feat if you knew how shy my little child is.

Afterwards we took off our temporary gear and she skipped out with me, wanting to know when we could do it again. So now we're on the rotation -- we'll be there every month, helping to serve food to those who might not have eaten had it not been for us.

I am continually amazed at how big Lindsey's heart is. She has taught me so much about what it means to be caring and charitable. I typically am one to be philanthropic from a distance -- I'll help raise the money, someone else can go do the mission. Except for my trip to Honduras, I have had rare opportunities to speak directly to those who are helped by charities, and to be honest have had little desire to do so. Perhaps it's because I feel so deeply for them, I have a heard time hearing about their plights without putting myself in their shoes. Lindsey seems to embrace this, though, and instead of getting wrapped up in how hopeless a situation may seem, she involves herself in how to make it less hopeless.

As a child I was never charitable in the same way she is. I am so proud of her and cannot wait to see what she's going to do as she grows up.

Text Donations for Haiti Relief: A New Channel Has Arrived

The whole phenomenon of the fundraising that occurred via texting in response to the Haiti earthquake was amazing. And what a telethon -- $57MM raised from the telethon alone at last count, with $25 million raised in text donations (outside of the telethon).

People may not remember this but the 9/11 event was the first time that there was an outpouring of donations via online giving. The American Red Cross website actually shut down for a day after 9/11 because they couldn't handle the amount of traffic of people trying to make online donations to them. It cost them many millions in lost donations when that happened, and opened up the whole new way to give: online.

Prior to 9/11, online donations were possible but not likely. Nonprofits often didn't have a way to accept online donations and the security of the credit card transactions was inconsistent based on the technology. After 9/11, nonprofits tried everything they could to get people to migrate to the web -- it's much less costly to get people to donate online than to create a direct mail piece, print it, stamp it, send it out, then process the paper donations upon their return. What a way to open up to a whole new generation of donors, people for whom the internet is an integral part of their lives, including shopping, purchasing, entertaining, ultimately living.

After 9/11, nonprofits finally made in-roads in their attempts to drive people to the web. Trust in online giving increased and a breakthrough was made.

The millions that were texted to the American Red Cross in response to Haiti is yet another break through in giving.

A way of transacting that was previously known to a small subset of the population has gone mainstream. People like myself, who have never texted any kind of financial transaction, and have hardly texted at all, gave via texting for the first time. The intrastructure which allows for this kind of donating was already in place -- no systems went down, no donations were rejected, all went smoothly.

A new channel for giving has been opened up.

Now the question is, what will nonprofits be able to do with the new channel? Will they once again go through the process of trying to drive people to give via texting, only to find that generating content and reasons to migrate to the nonprofit will be immensely more powerful than pushing people there? Only time will tell. I'm excited to be a part of this new world in philanthropy, to be able to test things out and see what works.

The Beginning (at least for me)

So which one was it? you may ask. Which nonprofit finally made a difference for you, made you realize that there was a deep desire within you to help others?

It is not who you think it is.

My first experience which truly turned me on to fundraising was a field visit I made with a then-client of mine, Children International.

At this point in my career I had already been working exclusively with nonprofits for some time. But up until then, they were just marketing plans, profit/loss projections, forecasted performance, numbers on a page.

In 2002, I had the privilege of going to Honduras to see first-hand some of the work that Children International did, where the dollars that we were working so hard to raise were being spent. It was my first travel out of the country since a one-week trip to Europe in college, and I was excited and nervous at the same time. We were warned about malaria, about kidnappers, about the importance of safety and long slacks to keep the bugs (and the men) off your skin. My Spanish was (and unfortunately still is) nothing more than thank you's, please's, and an understanding of words here and there without the ability to respond.

I remember while traveling on various planes to our destination that someone from Children International who accompanied us said that poor people in the US did not know what it was to be poor.

"What a heartless statement," I thought to myself, "How can you say that?"

And then I met poor people.

People for whom there was no societal safety net, no welfare or public housing to be had, no food stamps to ration out. They made shelters of cardboard and garbage bags in the ditches of the roads. When it rained too hard their houses washed away. They simply watched them go, gathering up the important belongings like the pots and pans and the next day would find new rubbish to make a home from and start over.

These same homes had roofs made of the same cardboard or garbage bags, or, if they were lucky, they found a sheet of tin to put across the top of it. And while the tin was better at keeping the moisture out, the heat within these shelters during the day was unbearable.

I saw square miles of open land that had been claimed by squatters, people who built makeshift homes nearly on top of each other. The land was owned by someone else, someone who tolerated their presence but who had the right to clear away the houses and plant whatever crop he wanted, with no warning and no requirement to find new homes for those he displaced.

Our group broke into two smaller groups and were escorted by those who worked at the local CI affiliate, where we were ushered into the homes of various families and told of their plight. I remember during one of these visits a little girl who couldn't have been more than 7 or 8 cried the entire time, but was too prideful to be caught crying. She kept rubbing her eyes as if she had sand in them, and would look around the room at us white-faced visitors with a defiant face. A few within our group did speak Spanish, and the girl singled out a Spanish-speaking woman in our group and begged to come back with us, and told her that she would make her a wonderful daughter.

And despite their desperate poverty, the kinds of traumatic events that happen to us who have better tools to deal with such occurrences happen there too. We heard one woman speak of her husband who had died of cancer and the terrible pain he had been in in his last days, but there was no money for painkillers. In the meantime, their children were getting sick from the cesspool that was literally out their front step. When it rained all the garbage and raw sewage from the other families ran down to a low spot in front of their home, creating this cesspool.

Just imagine taking away everything you currently have, EVERYTHING, and you have no means of earning them back. I think I've painted the picture. I could go on for about 5 more posts.

Then we saw the communities that Children International was creating for these people. They would negotiate purchasing the land from the landowner so that the people living there did not have any fear of being forced out. They would put in sewer lines that connected all the homes, and a water tank on a nearby hill for fresh, drinkable water. And while a cement block home that's 12 feet by 12 feet doesn't sound like much to us who are accustomed to so much more, it was paradise to these people, because there was a BATHROOM  inside the house, and there was RUNNING WATER!

In 1998, Hurricane Mitch came through Honduras and devastated much of the country in the same way that other natural disasters have been more destructive to the poor than to the rich. Within 3 months, Children International had mostly finished construction on a community called "El Milagro" -- The Miracle. While Unicef, CARE and others were still figuring out what to do with the millions they had raised to bring relief to the area, CI had already mobilized their local affiliates, made the necessary negotiations and began construction.

Cost to sponsor a child through Children International at the time of my tour was $18 a month.

It truly was a miracle to see what those $18 could do. They were and still are the least expensive of all the child sponsorship organizations, and I believe that because of the dedication of the people they have on the ground in all the countries they operate, they make those 18 dollars do the work of 50.

I returned from the trip a changed woman.

I walked into my home after the trip, physically exhausted and emotionally drained, but my spirit had been filled anew. I thanked my higher power every time I turned on the water. I marveled at being able to turn on a light switch. I was grateful for my vehicle which allowed me transportation to get to a job.

And the marketings plans that I continued to work on for Children International were no longer filled with numbers. They were filled with faces, with images of children and families whose lives I could affect, I could change, just by convincing one more person that s/he could afford $18 a month.

That was the beginning for me.