Informed Giving, a different type of Preparedness

Engage brain when donating

Up to this point the focus has been on promoting personal preparedness: disaster kits, the innovative ways people are integrating preparedness into everyday life, etc. But there's a side to preparedness that hasn't been discussed and one that isn't usually brought up, it has to deal with being informed on who you're giving your donations to--being a responsible donor.

I've posted some of the ads that push individuals to donate cash in the wake of a disaster because it's flexible, timely, and responsive to the changing needs a community faces. While that's an important message, it's only a small piece of the larger picture to help provide guidance on informed giving.

When articles like: The 50 Worst Charities are published, they prey on the fears of being taken advantage of, the fear that an unknown organization is going to misappropriate your donation. And because I hope you're grabbing your checkbook more than your disaster kit, it's important to feel good about the organizations you're donating to, so here are some tips and resources to help you begin your informed giving education:

Unrestricted Funding is not a bad thing (usually). Nonprofit organizations use unrestricted funds to pay salaries, to keep the lights on, and generally everything that doesn't fall under program expenses. While the topic of unrestricted funding is far more nuanced, the thing to remember is this: if you make a donation to an organization, do it in a way where you can detail how your donation is to be spent. If you want your money to go towards creating a jacuzzi for stray animals, expressly communicate that when making your donation, if you don't, then your donation will end up in a general fund (usually). Again, general or unrestricted funds aren't bad, in fact they are a necessity, but when you think your money is going one place and it's actually going somewhere else and you find out...you feel lied to. example: Moore, OK

Results, what are those? What was accomplished with your money? Holding nonprofits accountable for how your donation is spent means asking questions and following up to make sure they follow through. While writing a check gives you the option of quieting your tormented conscious and moving on, resist that urge and stay engaged and see how your organization of choice chooses to communicate it's activities and their results--doing this may change your view of your nonprofit of choice.

Don't be afraid of new organizations. Yeah, I said it. I've met more people who just started doing stuff following an event than I can count. While their lack of experience usually leads to problems in other aspects of response, the money they receive is usually spent the minute they get it. There's usually no rhyme or reason to how it's spent, oftentimes whatever is needed at the time is where your money goes. It may go to one family in the form of a cash donation so they can cover a car payment, or it may go to the purchasing of tools and contractor bags for volunteers, etc...Chances are your reporting will come in the form of Facebook updates and tweets but you'll know what they're doing with it. Good for people who aren't afraid to take risks and those who want an immediate impact made with their donation.

Community Foundations. These oft overlooked entities are local grant making institutions that existed prior to the event, and are usually involved in the Long Term Recovery of their community (when money is needed to cover financial gaps for a homeowner). Their involvement and knowledge of local needs can be an asset when looking to ensure holistic community recovery. They are already setup to take tax deductible donations and did I mention that they're local?

While being local is good, Community Foundations can be slow to act because of their unfamiliarity with disaster response and recovery and are more susceptible to local politics. Be that as it may, they are a great and lesser known option in the sea of nonprofits.

Do Your Homework. There are resources available that provide information on a wide range of nonprofits: Charity Navigator, the Better Business Bureau, Guidestar, and Great Nonprofits.org. Each of these sites provides different metrics by which to evaluate a nonprofit organization. You can find salaries, 990's, reviews from past volunteers, etc...Just like you wouldn't throw your money into the garbage or on something you don't want, you shouldn't give to an organization just because it's easy.

There are so many great organizations out there deserving of your donations that with a little work and an understanding of the kind of programming you want to support, you can be introduced to a lot of great organizations that will gladly put your money to use while you put your mind at ease.

Do a little, change a lot. The Future of Philanthropy?

Google announced a few days ago the launch of their charity app 'One Today.' The premise is simple, choose from a list of organizations on the app and donate a dollar towards that cause--easy. Think of it like an indiegogo or kickstarter page for charities except with the tacit endorsement of our friends at Google...although Google will deny that they endorse any charity they promote.

Nonprofits looking to post projects need to be a member of google for nonprofits first, once that happens, an organization can be featured on the app. In looking for more information it turns out that a 1.9% fee is taken on each donation and that unless directed otherwise, your donation will go towards the organization's general fund--meaning they can do whatever they want with it.

"The nonprofit will get all of your donation except the payment processing fee of 1.9%, so for every $10 donated, the nonprofit receives $9.81. Unless mentioned otherwise, your donation goes into unrestricted funds that will be used by the nonprofit at its discretion. One Today partners with Network for Good, an industry leader in Donor Advised Funds, to collect money from donors and disburse it to nonprofit recipients. For each transaction that you approved, you will see a line item on your credit card receipt, with the label GOOGLE *One Today NfG." (http://www.google.com/onetoday/faq.html)

While I like the fact that lesser known organizations have the potential to gain exposure through this app, I'm not the biggest fan of a processing fee being taken on every donation given the fact that this app exists to serve the organizations it features. I would suggest that if you find an organization that you like via 'One Today' that you give directly to that organization, that way 100% of your donation goes to them...and remember to specify where you'd like your donation to be spent if you're not comfortable with it going into a general fund.

Aside from some of my misgivings around the business practices that make 'One Today' run, I don't know how I feel about this app and its potential impact on how donors give: Will encouraging individuals to give micro amounts change how they feel about philanthropy in general? Will donors place less importance on a donation of $1 vs $100, and if they do, will that somehow alleviate the burden on the nonprofit to report on their impacts and be accountable to donors because it was only a buck?

Don't get me wrong, I think 'One Today' has the potential to open doors for lesser known nonprofits and help them gain exposure, but wonder if/how pushing a model of micro donations will impact the overall landscape of philanthropic giving.

Thoughts?

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.

So where exactly did all of the Sandy money go?

Yesterday I posted about the massive $1.4 Million grant that Presbyterian Disaster Assistance received and the questions I have surrounding the award and how the public can measure the return on that investment. This morning I came across an article from Mother Jones covering similar issues, specifically: "What Happened To The Money Occupy Sandy Raised?"

The article examines a growing discontent over how some organizations, specifically Occupy Sandy, have, through a perceived lack of transparency and community inclusion, not been honest about how the remainder of Sandy donations are going to be dispersed, when, and to whom on the Rockaway Peninsula. 

A Train service restored to Rockaway Peninsula (AP Photo/Seth Wenig)

The article also points out that there is no clear picture of how the money that has been raised by Occupy Sandy has been spent; this is due to a lack of tracking and documentation, an oversight that almost every spontaneous group succumbs to in the craziness of response and something that needs to addressed as a part of community preparedness moving forward.

What’s happening in the mid-Atlantic region is a shift from response to recovery, and with that the recognition that the coffers that were once brimming with an unprecedented number of donations from individuals, groups, and foundations, are now beginning to run low. Coupled with this dip is the understanding that beyond federal funding for beach restoration and mitigation projects, remains a list of projects that need time, attention, and most of all…money.

What this is creating is a catch-22 situation that centers on the idea of fiduciary stewardship. Throwing money off the back of the proverbial truck just because you have it and are being pressured to spend it, isn't the right approach...those who get it will be happy, those who don't will vilify you for not doing your due diligence in identifying the best way to stretch the limited dollars that are left. Yet the longer you hold onto the funds to identify innovative ways to stretch the remaining cash to impact as many people as possible, the more people scream about secrecy and exclusionary practices.

This catch 22 is fueled by the idea that your mission and operational focus is the most important and as such, you should be given the money to continue your work--given this rationale, satisfying everyone isn't possible. So in that regard, I can see why Occupy is taking their time, because once that money is gone…it’s gone, so why not take the time needed to ensure that it goes as far as possible and advances the recovery of as many as possible. Occupy Sandy's actions to this point give me no reason to believe that they will do anything other than what they’ve stated, which is transition the funding to local groups in the best, most responsible way possible (that’s me paraphrasing).

However, Occupy Sandy doesn’t get off scot-free. I believe those individuals and organizations that are dissatisfied with the lack of transparency and communication around how the remaining funds are to be spent and when, have every right to be vocal about their discontent. Saying inflammatory statements however is counter-productive and discredits the work that has been accomplished because you disagree with how long its taking to disperse money: 

“ If Occupy Sandy doesn't tell the Rockaways community how it plans to spend the rest of the money, I personally believe they have outstayed their welcome.” (see linked article for context) 

What many fail to recognize is that before the storm made landfall, Occupy Sandy didn’t exist; just like the other hundred or so groups that came about to solve community problems caused/exacerbated by the storm. While I appreciate the scrutiny being applied to Occupy in an effort to "keep them honest," lets not forget about the army of established non-profit organizations that came to the area and received significant donations as well. I haven't seen one article asking for an accounting of where/how those groups spent their donations and their the ones who are supposed to be model for how groups like Occupy Sandy learn to do response better. It would be interesting to put the same resources and scrutiny applied to Occupy Sandy to some of the more established disaster response non-profits who responded and compare and contrast findings.

All that to say, Occupy Sandy, get a plan for how you intend to spend the remaining money and publish an accounting of what you've spent and where thus far…if you don’t know, then tell us…you're not the first Spontaneous organization to be overwhelmed and not put the effort needed into tracking and documenting donations, and you won't be the last. And for those who are demanding answers, good for you…but remember that there are other organizations out there with track records of disaster response who also received copious amounts of donor dollars flying under the radar, why not ask for an accounting of their donations received vs. dollars spent on community programming...you might be surprised by what you find. 

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.

Donate Responsibly

Often referred to as the second disaster, the wave of unsolicited donations, usually in the form of used clothing can tie up key personnel and physical resources that would otherwise be allocated to other key response activities.

As you choose how best to help the communities impacted by the recent severe weather events in Texas and Oklahoma, please remember that cash is king.