Many organizations, nonprofits and corporations quickly rallied to help the residents of New York and New Jersey who were most affected by Superstorm Sandy. Many have been helpful. But, some nonprofits and government agencies delivered disorganized responses and services. (See Communications winners, losers in wake of Sandy).
Several efforts also have received considerable criticism.
One fund-raising event, the 12-12-12 concert, pushed some prices to more than $1,000 per ticket. In many instances, only the nominal price on the ticket actually helped storm victims.
A cause marketing program by an obscure online party planning company allocated a donation of 15 percent of proceeds through December 31 to City Harvest, a nonprofit that provides food to the needy and has helped residents affected by the storm. But the meaning of the word “proceeds” never was explained to customers.
A donation made as a percentage of proceeds has become a popular cause marketing tool and customer sales pitch for companies. These companies support, through sales, a specific cause or decide to contribute to aid during the aftermath of a disaster. “Proceeds” could mean a designated percentage of sales, or a designated percentage of profit from sales, or any other definition decided upon by a company.
Concerts, fashion shows and other events created to support disaster relief, or existing events and businesses that become engaged in cause marketing after a disaster occurs, do need to cover legitimate business expenses. It is a percentage of the profit, or all the profit, that is designated to a cause or charity after all expenses are paid.
Sandy Funds Down
The initial charitable efforts surrounding Sandy, which does not include the 12-12-12 concert, have not raised significant funds when the response is compared with those of more recent disasters. According to Indiana University’s Center on Philanthropy, $219 million had been collected three weeks after the storm. Hurricane Katrina had raised $1.3 billion after three weeks. More than $600 million was raised for the Indian Ocean tsunami and $752 million was collected for the earthquake in Haiti within three weeks of those disasters.
One consideration for the discrepancies is that donors may have been less moved to help Sandy victims who are perceived mostly to be middle class, white and from a major U.S. metropolitan area. If this is accurate, the prejudices and perceptions related to disaster support and public generosity will require further study.
Disaster Donation Tips
In the future, individual donors carefully need to consider their responses to disasters. Here are several donation tips:
- Determine which nonprofits are involved and the services to be provided.
- Do not rush to provide a cash, check, or credit card donation. Government agencies and major nonprofits such as the Red Cross are activated immediately to provide services. Funds are available to cover initial expenditures.
- The largest nonprofits, however, are not always the best equipped organizations to handle a specific disaster. Rather than allocating personal money that is placed into an organization’s general fund, which could be used immediately or held for a later emergency, always wait a few weeks before making a donation. Smaller neighborhood and community organizations, houses of worship and other groups will emerge to funnel funds and goods directly to people in need. These groups deliver more of every dollar to disaster victims.
- Whether choosing to help during a disaster, or deciding to make a donation for any cause, research and evaluate the salaries of the top executives and the portion of every dollar that is used for the intended mission.
Here are some recent examples about executive compensation and money allocation that have circulated the Internet and among emails. Additional research to verify accuracy of this information is suggested before committing to a donation to any of these organizations.
- The American Red Cross: President and CEO Gail J. McGovern’s annual salary is reported to be higher than $500,000.
- The United Way: President Brian Gallagher is believed to receive $813,000 in salary and other compensation and expenses.
- UNICEF: CEO Caryl M. Stern reportedly receives $1.2 million annually plus expenses that include a Rolls Royce. Less than five cents of a donated dollar reportedly is used for services.
- The Salvation Army: Commissioner Todd Bassett is believed to receive a salary of $13,000 per year (plus housing) for managing a $2 billion organization. Ninety-six percent of donated dollars have been reported to go to the cause.
- The American Legion: The National Commander does not receive a salary. Donations directly help veterans, their families and youth. The same has been reported about The Veterans of Foreign Wars, The Disabled American Veterans, The Military Order of Purple Hearts and The Vietnam Veterans Association.
- For religious organizations, Catholic Charities has low overhead and the Maryknoll Fathers and Brothers, which support mission programs in the U.S., Latin America, Asia and Africa, allocates 82.3 cents of every dollar to its projects.