8/20/09 Chronicle of Philanthropy: Disaster-Relief Groups Are Leery as Hurricane Season Approaches

Disaster-Relief Groups Are Leery as Hurricane Season Approaches

By Caroline Preston

From the issue dated August 20, 2009

The tight fund-raising climate could make it more difficult for charities to help people affected by this year’s hurricane season and by other disasters in the United States and abroad, nonprofit officials say.

While the National Oceanic and Atmospheric Administration recently revised its storm forecast, predicting a light to moderate hurricane season, other crises, such as the H1N1 virus, loom this fall for disaster-relief charities.

The largest of the aid groups that serve Americans say they have not been forced to make cuts that will damage their ability to respond when a crisis hits. But they worry that sluggish giving could limit how much aid they will be able to provide in the weeks and months after a hurricane or other calamity.

The high unemployment rate could mean that fewer people have money to pay for supplies and repairs, further adding to relief groups’ burden.

“The long-term recovery will be challenging,” says Jeff Jellets, who coordinates the Salvation Army’s disaster responses in the southern United States. “With that increased demand, we may only be able to give a $50 gift card, instead of $100.”

Like other relief groups, the Salvation Army brings in most of its money for emergencies immediately after a disaster hits, so it is unclear yet exactly how much money groups would be able to spend.

Red Cross Cuts Costs

Fund raisers predict that lower-profile crises, in particular, will trigger far fewer donations than they would in a stronger economy.

The American Red Cross is in a stronger financial position than it was last year, after a fund-raising campaign at the end of 2008 helped the organization close its deficit to $50-million, its president, Gail J. McGovern, said in a recent speech.

In early 2008, the charity laid off a third of the roughly 3,000 people who worked at its headquarters. The recession has forced the group to cut costs at all levels since that time and put plans to expand chapters on hold.

But Gregg O’Ryon, vice president for readiness and capacity development, says the charity has avoided any more significant staff cuts and reductions that would affect its ability to respond. “The vast majority of choices we’ve made are in areas other than disaster assistance,” he says.

Some people who track disaster response are more pessimistic, citing recent layoffs at many local Red Cross chapters and the potential dip in volunteerism as a result of the recession. While some jobless Americans may have more time to volunteer if a disaster hits, others who are employed may not want to leave their jobs to volunteer for fear their positions may be gone when they return, says Ben Smilowitz, executive director of the Disaster Accountability Project.

Mr. Smilowitz says that victims of Hurricane Ike last year received less support than did victims of Hurricane Katrina, and the bad economy could reduce the level of aid further.

Government Aid

Not all groups and services are hurting. Donations have dropped by 30 percent this year at Catholic Charities USA, but the charity recently received a grant of up to $103-million from the U.S. government to provide counseling to people after disasters. The grant is part of an effort by the Department of Health and Human Services to expand nationally services it supported after recent hurricanes in the Gulf Coast.

Save the Children is expanding in the United States and its unrestricted private donations have declined by 2 percent, while other types of giving are up. Feeding America, which supplies food to disaster areas, says giving is on the rise. Nonprofit officials who lead disaster-response groups in the Gulf Coast say they haven’t yet seen a big dip in donations. But they worry that federal and state governments will cut back on disaster preparedness given the economic situation, making their work more difficult and costing communities more money over the long term.

“The concern is, will government pay for activities that are necessary to protect communities and save lives?” says Flozell Daniels, president of the Louisiana Disaster Recovery Foundation, which is supported by national and local grant makers.

Donations to his organization have dropped by between 10 percent and 15 percent so far this year.

The picture overseas is similar.

James Bishop, a vice president at InterAction, an umbrella group for international organizations, says some of the charity’s members have been forced to cut jobs and programs that could make it more difficult for them to respond quickly to a disaster.

“Their ability to deploy would be less than it was 18 months ago,” says Mr. Bishop. “The volume of staff they have in the field would be less, and the number of people they reach would be less.”

Efforts to mitigate the impact of disasters abroad by shoring up buildings and preparing communities have received increased focus from donors in the last few years, partially due to concern about climate change.

Aid workers were hopeful that a conference on climate change in Copenhagen in December might lead to big commitments, but the economic situation has dampened their expectations, Mr. Bishop says.

Groups are being affected in different ways. Catholic Relief Services had to cut 8 percent of its work force this spring, although it avoided layoffs among national staff members.

Michael Wiest, executive vice president for charitable giving, says the economy forced the group to speed up the closure of an East Asia office, which could mean it will be slower to respond if a disaster hits in that region.

Nonprofit officials point to the food crisis and fighting in the Democratic Republic of the Congo as examples of crises for which it will be particularly difficult to attract donations.

They also cite the meager donor response to the humanitarian crisis this spring in Pakistan’s Swat Valley. Catholic Relief Services raised just a few thousand dollars for that crisis, says Mark Melia, deputy vice president for charitable giving.

Foundations, too, are less able to give.

Brad Myers, program officer at the Conrad N. Hilton Foundation, says his board decided last fall to make disaster recovery a significant grant-making priority. But when the foundation’s assets declined with the stock market, it had to put many details of that plan on hold.

Mr. Myers says his foundation will give smaller amounts to disaster relief, an approach he thinks other grant makers will also take. “The threshold at which we could consider responding to a disaster perhaps has gone a little higher,” he says. “It’s not happening consciously, but perhaps unconsciously we are setting the bar higher.”