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New Challenge For Aid Groups: Lots of Money

Huge Influx of Funds Overwhelms Some Tsunami Relief Efforts; Assessing Where to Give Now

The Wall Street Journal

January 4, 2005


By Rachel Emma Silverman and Elizabeth Bernstein

Relief agencies have raised well over $100 million in the U.S. for tsunami aid efforts. Now comes the hard part: What are they going to do with it all?

That is an important question for people who are considering making a donation or adding to what they have already given. Because many of the dozen affected countries have ruined infrastructure, there are significant challenges to getting donated supplies and other aid into the hands of people who need it. Charities also face a logistical nightmare coordinating efforts with other aid groups and government relief programs. Some donors, for their part, wonder whether their money actually will end up with tsunami victims.

A few organizations are acknowledging that the money pouring in for tsunami victims should be sufficient to meet their needs. Doctors Without Borders says it has stopped accepting donations related to the disaster in South Asia, at least for now. The charity "estimates that we have received sufficient funds for our currently foreseen emergency response in South Asia," according to a message posted on its Web site. Instead, the group requests that people donate directly to its general Emergency Relief Fund, which can help the afflicted in other parts of the world, as well as tsunami victims as the need arises.

World Vision, a Christian relief group, says in newspaper ads that when donations exceed what is needed, it will "redirect funds to similar activities to help needy children and families." The group, which had raised nearly $25 million internationally as of Monday for tsunami relief, still is hoping to raise a total of $50 million for the disaster.

The American Red Cross is putting all the money that has come in since the tsunamis hit into a general International Response Fund, though it says all those donations -- $92 million in cash and pledges as of Monday afternoon -- will go for tsunami relief. Mercy Corps says all of the $8 million it has taken in so far has been designated for tsunami relief and has been put into a Tsunami Relief Fund. Any money that comes in that hasn't been designated will go into a general fund. Give2Asia says all funds designated for tsunami relief will go into its Tsunami Recovery Fund.

One factor that should comfort donors: Many well-known international aid groups have high so-called efficiency ratings, which means that most of the money is quickly doled out to the needy, rather than to cover overhead expenses. Some relief groups, such as CARE USA, Mercy Corps and Save the Children, are touting their efficiency -- often with elaborate pie charts -- in newspaper ads and on Web sites to draw donors.

Charity watchdog groups also are listing their top-rated charities to help donors differentiate between the dozens of groups vying for funds. The Web site of Charity Navigator, which rates groups based on financial criteria, features several highly rated relief groups, including the American Red Cross and AmeriCares. Charitywatch.org -- the Web site of the American Institute of Philanthropy -- also lists several A-graded groups, including the Christian Children's Fund and the American Jewish World Service.

InterAction.org, a consortium of international aid charities, provides a list of some 55 members that are providing aid for the disaster. Its members must meet strict operational criteria, such as providing an annual audited financial statement.

Still, charity watchdogs caution that inevitably there will be some wasted dollars and duplicated efforts. That is because of the sheer number of aid programs and government groups providing money and services and because of the political instability in many of the affected countries.

Most relief charities post updates on their Web sites on how donor money is being used. Some groups, such as World Vision and Oxfam, have full-time staff or affiliates posted in affected areas and work on long-term development efforts, in addition to immediate relief. Other groups, such as AmeriCares, airlift in needed supplies. And some groups provide distinct services. For instance, International Medical Corps and Doctors Without Borders provide medical relief.

The American Red Cross has committed $30 million in aid so far, some of which has been sent to the International Federation of the Red Cross and Red Crescent Societies, which is coordinating the relief efforts of all the international Red Cross societies. Of this $30 million, $25 million is for food and $5 million will purchase family kits (temporary household items such as sleeping mats and plastic sheeting for a family of six), hygiene kits (soap, shampoo and other items for a family of six), kitchen kits and tents. The international federation distributes funds where it deems they are needed most.

Mercy Corps is operating in three countries, with most of its efforts focused on Banda Aceh, Indonesia. To date, they have distributed $1.8 million. Give2Asia is in the process of sending $200,000 to Indonesia, India and Sri Lanka.

For charities and donors alike, some concern still lingers from aid distribution problems that arose after the Sept. 11 terrorist attacks. The Red Cross came under particular scrutiny when it planned to distribute only $100 million directly to families of the victims, after raising more than half a billion dollars in donations for its attack-related Liberty Fund.

Soon after the controversy arose, the charity's president, Bernadine Healy, resigned. Red Cross then reversed course and said it would give all the Liberty Fund money to Sept. 11 victims. It also said it would stop making active solicitations to the fund. The group now rates highly with several charity-evaluation services.

Meanwhile, some suspected schemers appear to be trying to swindle tsunami relief donations by sending out fake fund-raising e-mails. Relief organization Oxfam's Hong Kong branch informed local police about an e-mail headed "Urgent Appeal" and calling on recipients to deposit funds into a Cyprus bank account and fax the payment slip to an office in Spain. The unauthorized e-mail describes the relief efforts of Oxfam and other agencies.

Caroline Green, a spokeswoman for Oxfam International in Washington, D.C., said the group had been alerted about the fake e-mail and had reported it to police. Oxfam has raised at least $40 million and is providing aid such as water purification, food and the building of temporary shelters.

--Anne Marie Chaker, Cassell Bryan-Low and Mylene Mangalindan contributed to this article.

Write to Rachel Emma Silverman at rachel.silverman@wsj.com and Elizabeth Bernstein at elizabeth.bernstein@wsj.com

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