The scramble for donor dollars after a disaster

Posted on March 23, 2011 at 9:41 am

There have been a lot of high profile disasters over the past few years, and each disaster brings home the point that the way we fund disasters does not work well. And after each of these disasters, a reporter will ask me if enough money or even too much money has been donated. My answer is always the same – some organizations will have too much money and other organizations will have too little money. Often it’s not the amount, but the distribution that’s the problem.

So here’s how it works, charitable donations are the greatest in the first few weeks after a disaster, while it’s still making news headlines. Nonprofits know this and so many of them immediately issue appeals and create advertisements for their disaster response. But this is all done before there’s any clear idea of the extent of the disaster, the capacity of the local government and nonprofits to respond, and which other nonprofits are responding and what their capabilities are. In other words, they raise money in a vacuum.

And as the nonprofit and corporate social responsibility sectors grow, there are more and more organizations raising funds for disaster response. This leads to intense competition between organizations for donations. Those with the biggest name recognition, the most eye-catching advertising, on the most lists of “How you can help,” or with the best celebrity spokesperson get the most donations. The little local organizations that are in the midst of the recovery efforts and are working 24 hours a day non-stop have a much harder time raising funds. This is because their website isn’t in English, they can’t accept credit card payments, or nobody knows who they are or how to find them.

This opportunistic fund raising means that too much money can be raised for things like boats or orphanages while too little money is raised for help with legal issues or assistance to the elderly. There may be too much money raised by organizations that are incompetent and too little money raised by competent ones. This creates problems for the local government or the cluster coordination system because they often do not have the ability to ensure that the money gets to where it’s needed the most.

In the Haiti recovery efforts, there are somewhere between 1,000 and 10,000 organizations responding – no one knows the actual number. This makes coordination extremely difficult, increases the chances for gaps and duplication of aid, and makes it impossible to monitor the work of each organization to ensure that programs are well done and don’t do any harm.

Today’s situation report for Japan from OCHA (Office for the Coordination of Humanitarian Assistance) states that 670 Nongovernmental Organizations (essentially nonprofits) have offered their assistance. This probably means that all 670 of those NGOs have already raised funds for the recovery efforts. And many of them have done this without a clear request for assistance.

Here’s what the Japanese Government has said:

The Government of Japan has requested that its position on international donations of relief items and on international Non-Governmental Organizations (NGOs) operating in Japan be made public. With regard to relief items, “the Government of Japan has received offers for relief goods/material from many countries, international organizations, NGOs and private sector.  The Government is identifying the needs and establishing a mechanism for storage and transportation to affected people. Therefore, it is recommended not to send any relief goods without coordination with the Government and local governments”.

Concerning offers of assistance by NGOs, the Government of Japan states that “Search and Rescue operation phase still continues in the affected areas at this moment and the access to those areas is strictly limited to rescue workers. It is also reported that there is temporary shortage of petrol in the affected area. International/foreign NGOs are recommended to wait until the situation improves so that those NGOs are able to conduct their activities in a self-sustainable way”.

Here’s what the Japanese Red Cross has said:

The Japanese Red Cross Society (JRCS) has mobilized its staff and resources nation-wide and domestic donations are being received to assist affected communities. While no international appeal has been launched at the moment, JRCS is receiving cash contributions from some Red Cross Red Crescent National Societies in the spirit of solidarity.

And here’s the joint statement from the two nonprofit coordinating bodies in Japan.

None of these are actual appeals for international assistance. Instead they seem to be saying – if you’re going to help then here’s what we want you to do.

So what are all the international charities that raised millions of dollars going to do with it? Here’s a statement from Oxfam Japan

“The Japanese state has the means to reach 99 per cent of the population, but there will always be some who need more specific assistance,”

And here’s a quote from the president of InterAction

When Hurricane Katrina struck America in 2005, many of the victims of that disaster were comforted from the emotional and monetary support that came from abroad. Just as in Hurricane Katrina, there will sadly be thousands of people who will likely fall through the cracks of Japan’s social security net. Japanese civil society, with funds from U.S. and other donors, will help fill that gap. That is where the generosity of the American people and many other nations, make a difference.

So it sounds like these 670 NGOs that have raised millions of dollars in donations for the recovery efforts will have one of three choices. They can either be compete to provide assistance to the 1% of the victims that fall through the cracks. They can try to find partnering local organizations to fund which may mean extra layers of unnecessary bureaucracy and extra work for the local organization to please the funding organization. Or the organizations may decide to use the money on other disasters or to cover general organizational costs. Some of these organizations will be very upfront about this, and some of them will hide it in the fine print.

But this is not how many nonprofits are presenting the issue. You still see appeals with pictures of the destruction or children and the elderly. The fallout of this is that the organizations that have assessed the situation and decided that their assistance is not needed have had to deal with public disappointment and even accusations of racism.

The system is not working. It’s far too opportunistic and does not ensure that money arrives where it is needed the most. Some disasters or organizations receive far more money than they need while other disasters or organizations receive far less money than they need. And it often doesn’t support the work of the government or the local organizations.

Personally, I’d like to a system that utilizes a centralized funding system instead. There would be a general fund that people can give to immediately instead of to individual nonprofits. Similar to the Disaster Emergency Committee (DEC) appeal, but on a much larger scale.  This would meet the public’s need to feel that they are helping and give them a way to show solidarity with the disaster victims. The money could then be accessed by either the government or a coordinating body to ensure that donations go to where they are most needed rather than to whomever can raise the most. This would potentially help the local organizations get the funding they need and provide a measure of control over nonprofit work. It would also mean that if all the funds are not needed, they could then be used in disasters that do not get the same media coverage and the same level of financial support.

I know that some people will argue with me that a system like this will be too slow or may favor larger organizations over smaller ones. Both of those are decent criticisms. So I ask them to propose a better system. Because this repeated scramble for donor dollars is just not working.

—–
The Debating Chamber – Japan and its implications for the international humanitarian system - AlertNet – an article written by ALNAP discussing the same problem.

Related Posts

Giving to local organizations in Japan

Charitable Advertising, Media, and Public Perception

The CNN Effect

Why waiting to give to Japan is a good idea

Coordination after a disaster

Disaster Emergency Committee’s website

« Giving to local organizations in Japan   •   Problems with orphanages in Haiti and Cambodia »