Monday, May 27, 2013

Show me the money...

While not all disasters are created equal in terms of news coverage, scope of damage, and economic impact, etc...the desire to do something is powerful, and oftentimes that desire manifests itself in the form of making a monetary donation.

The knee-jerk reaction is to donate to the Red Cross, a response that can be seen in the high profile donations of Kevin Durant, Carrie Underwood, The Oklahoma Thunder, and Chesapeake Energy Corp. Following the Moore tornado, the Red Cross has received more than $15 million in donations which underscores the power donations have following an event. However, with the advent of crowdfunding sites, the landscape of how people donate money to response & recovery is beginning to change. With a stronger emphasis being placed on accountability, speed, and impact, donors are looking at new ways to ensure their donations go to the people who need it as expeditiously as possible.

This shift towards a higher degree of accountability and results reporting is best illustrated by the authority in non-profit rankings, Charity Navigator. They are introducing additional metrics as part of their ratings to include timely, detailed donor reporting on fund allocation and program impacts. To read more about the evolution of the non-profit rating system and how your charity of choice ranks, their site is a wealth of information.

In response to the donor desire for greater accountability and speed, sites like: indiegogo and gofundme are working to eliminate "the middle man" by empowering donors to give directly to impacted families. While donors feel a more direct connection, the potential for fraud increases significantly due to the fact that anyone can claim to be a survivor and need help.

With the understanding that millions of dollars are flowing into communities following disasters, coupled with the perception that traditional aid is too clunky and bureaucratic, I believe there will be a rapid proliferation of direct giving tools and applications aimed at shifting donations to impacted communities from traditional aid structures.

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