Monday, July 22, 2013

Dolla Dolla bills y'all

According to this NYTimes article, NY State Attorney General Eric Schniederman is questioning why so much of the money raised in response to SuperStorm Sandy remains unspent. While the article talks about why non-profit agencies and organizations have yet to spend/allocate all of the money received in response to the plea for financial support following Sandy, what it also does is highlight the mentality people have around money and disasters—a touchy subject to be sure.

The message being pushed when a disaster strikes is that 'cash is king,' that your dollars are far more valuable than a tractor-trailer of unsorted, used clothing. While a donation of your old clothing sound like a good idea in theory, in reality, it isn’t and I've seen firsthand the unintended impact of how those donations can do more harm than good. Money is good because it's flexible, requires little in the way of logistics and personnel to manage it, and can respond to dynamic post-disaster needs that shift every 24-48 hours. Once an organization starts receiving donations however, everyone has ideas on how that money could/should be spent. 

Some organizations tout their ability to turn your donations into goods and services on the ground quickly, those groups are often criticized because many question whether due diligence is undertaken to ensure that the dollars are being spent on those who truly need it. Then there are those organizations/groups who hold off on spending donations they receive, citing the need to wait and see what happens when the dust settles, they are criticized for not being responsive enough and for lacking transparency. 

It seems that even with the best intentions at heart, someone, somewhere isn't going to like how you're doing things and take you to task for it. So what's right when it comes to spending: fast and furious or slow and cautious? The answer that I've found is a healthy mix of both.

The Robin Hood Foundation awarded over $60 Million dollars following the 12.12.12 concert for Sandy Relief to local and national organizations, and did so in record time. The rationale being that they were just the name, they didn’t have the “do” capacity to spend the money on response and recovery activities, so why hold onto it? While the money was awarded to a wide variety of agencies and organizations, Robin Hood still drew criticism that they were spending the money too quickly and not being thoughtful enough about who it went to and whether some should be held for longer-term community needs.

On the flipside, as the NY Times article expounds upon, there are questions about the millions the Red Cross raised and why it hasn't been spent; but local groups aren’t immune either, groups like Occupy Sandy are feeling the heat as well. They have money in the coffers but are looking to see how far FEMA, insurance, and any additional financial assistance individuals, businesses, and the communities as a whole receive before applying their additional financial resources. Unfortunately, the thoughtful approach is rarely seen as thoughtful, it’s seen more as deceitful and usually draws harsh criticism. 

The bottom line where money is concerned is everyone will have an opinion: it's being spent too fast, it’s not being spent fast enough, it’s not being spent on the right things, etc. This butting of heads is unavoidable but the discussion it generates is central to holistic community recovery, and I believe that part of that discussion should focus on a greater degree of transparency around how donated dollars are being spent, not on the rate of expenditure.

This NewsOK article illustrates a great example of what it means to lose sight of where the donations are going. Following the Moore, OK tornadoes, a Red Cross text to give campaign raised several million dollars and Donors believed all of the money received via that campaign would be funneled to the recovery efforts—this was not entirely true and it was only after considerable pressure that this became the case. 

If we as a community of practice are going to encourage individuals to donate money to our organizations instead of giving clothing, then we have an obligation to show donors how their money is being spent in simple, unfettered terms. At the same time, those of you who donate money need to do your homework and understand that if you do not expressly communicate where your donation is to go, that organizations will apply it to their greatest need at that time or put it toward their general fund. While the debate over the ethics of such actions is heated, it’s common practice and you should be aware of it.

Just as important as educating and communicating with donors, is ensuring community leaders get a crash course in disaster economics before they have to go through it. Part of our jobs in promoting community resilience is to work harder on the front end so that when something does happen there is a familiarity with the process and expectations that will be placed upon them as it relates to the financial side of recovery efforts.

While the road to recovery is a long and bumpy one, educating donors and communities alike on the financial realities and timetables that come with building back better needs to take place. While you will never satisfy all of the people all of the time, working to educate around the realities communities will face can only help everyone in the long run.

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