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5 Lessons For Donors To Take To Heart

The Monday-morning-quarterbacking about what went wrong in relation to Hurricane Katrina will persist for years to come. While we continue to debate the government's shortcomings and whether our charities delivered on their promises, it's beneficial to also take a look at the behavior of donors. Clearly, donors to Katrina-related causes did many things right. For one, the pace and level of giving related to Katrina was unprecedented, far surpassing giving after the September 11th terrorist attacks. And the data shows that donors didn't give to Katrina in lieu of supporting other causes. But among this record-breaking giving were some missteps and thus some lessons that donors should learn before the next disaster inevitably happens.

  • Avoid newly-formed charities. While the IRS decided to legitimize anyone claiming to provide Katrina-related aid by fast-tracking their applications for nonprofit status, Charity Navigator advised donors to avoid groups that suddenly popped into existence. Establishing a new charity is hard enough, but in a crisis, the odds of succeeding are slim to none. Think of it this way: would you entrust all your savings in a financial firm that just opened, doesn't even have stationery, and whose employees have no experience in investing money? Doubtful. Even the most ethical and well-intentioned newly formed organizations were doomed to fall short, as evidenced by the Bush-Clinton Katrina Fund. Many gave to the fund under the premise that two former presidents could better provide aid than any other charity in existence. But even this organization ran into trouble. One year after Katrina hit, seven out of nine religious leaders gave up their posts as advisors, prompting the exodus of the executive director and revealing the organization's struggle to effectively disburse its funds.
  • Do not send new or used goods. With thousands of people trapped in the Superdome, desperately in need of food and water, it is hard to fault anyone who wanted to send such items to the region. But this type of philanthropy is simply not practical or efficient. Right after the storm hit, there was no one available to receive these goods, much less organize and distribute them to the victims. Furthermore, charities are often able to partner with companies to acquire in-kind donations such as bottled water and new clothing. So next time, instead of buying things like canned food and diapers, donate money to a relief charity. Instead of boxing up and sending your old clothing, have a garage sale and turn your used goods into cash and donate that to a worthy charity.
  • Meet the real needs. This lesson is best explained by highlighting a real-world example. Compassionate people from across America have cleaned off their book shelves, rushed off to the local book store to purchase new books, or have held a book drive, all in an effort to replace the library books destroyed by Katrina. Thanks to their efforts, the New Orleans Public Library system reports that it has received over 1 million books. While no one can deny that this is a tremendous outpouring of generosity, it is also a perfect example of misplaced philanthropy. There are no librarians to catalogue the books and no shelves to stack them on. What the library system really needs is money to rehire its staff and rebuild its libraries. Yet, well-intentioned people continue to send books, only to see them rot and decay in untouched boxes.
  • Be proactive in identifying disaster relief charities. Don't wait until the next disaster hits. Take your time now to find a few financially healthy charities that have a record of accomplishments in delivering relief in various parts of the world. Then, earmark a percentage of your annual giving budget for disaster-related charities. This way, when the next crisis occurs, you'll be well poised to give with confidence.
  • Do not expect immediate results, but do keep tabs on what your donation accomplishes. Seeing the suffering of Katrina's victims in real time on television made it nearly impossible not to demand that charities respond quickly. The sense of urgency was further heightened by the fact that online giving enabled donors to instantaneously contribute to the relief efforts. Thus, tremendous pressure was put on charities to provide an immediate fix. But it takes time for charities to mobilize, to assess the problems that need to be addressed and to develop effective solutions. Donors need to be patient so charities will not feel pressured to plunge in and offer ineffective aid, simply to placate impatinet donors. That doesn't mean donors shouldn't hold the charities accountable for delivering on their promises. It is critical that donors follow the charity's progress and track its accomplishments or failures.
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