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| Best Practices: Philanthropy |
In the Wake of the Tsunami
Marilen Cawad
07/01/2005
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Warren Beach, an independent commodities investor,
contacted Geneva Global after the tsunami to discuss effective ways to funnel
his donations. “Even though they were not necessarily a relief organization, we
talked about what indigenous partners they were aware of in the disaster areas
that were worthy of effectively engaging in the work at hand,” says Beach, who
also has funded AIDS projects in Zambia and South Africa through Geneva Global.
The company introduced Beach to Jaringan Kerja Lembaga Pelayanan Kristen di
Indonesia (JKLPK), an association of 268 indigenous service organizations.
Geneva Global reported that the group had an extensive track record in 10
regions of the country.
Beach gave a grant to JKLPK, which, Geneva Global
says, used the money to mobilize and fly in physicians and paramedics from other
parts of Indonesia, treating 10,000 people. JKLPK was able to provide a medical
staff that spoke the local language, understood the customs and was willing to
go into isolated areas. Beach’s funds passed first through a donor advised fund.
Geneva Global researched the project, negotiated the terms and then gave wire
transfer instructions to the fund. The fund issued a tax receipt to Beach.
Geneva then tracked and verified that JKLPK received the money.
Many groups found
themselves ill-equipped to respond to the extraordinary
outpouring of support for the Asian tsunami. |
Beach, who is
also a director at Willow Creek Community Church in the Chicago suburb of
Barrington, gave a total of $99,000 for the medical treatment project and two
others involving trauma counseling and potable water provision. He believes that
supporting indigenous groups is more effective than donating to a large
international charitable group. “Often, the largest groups have huge operational
costs that diminish the grant’s impact,” says Beach.
Geneva Global and
similar entities charge a fee, which is usually a percentage of the funds
donated for the specific project. Geneva Global insists that its 10 percent fee
is justified by the success of its approach for donors who are dissatisfied with
traditional methods of giving money. “Fee-based services are regarded as the
enlightened approach to investing,” Thurman says.
Leslie Lenkowsky, a
professor of philanthropic studies at Indiana University, says philanthropists
should be aware of the risks associated with coursing their money through
for-profit groups. “In the end, it’s still a business. They can close tomorrow.”
He warns individuals to conduct due diligence on their for-profit funding
advisor the same way they would a financial advisor.
After the tsunami,
recognized nonprofits specializing in international humanitarian work also
attracted significant support from philanthropists, especially from those that
had longstanding relationships with large aid groups. The credibility of the
brand attracted Arthur Blank, cofounder of Home Depot and chairman of the Arthur
Blank Family Foundation, to write a $250,000 check to CARE after the tsunami
struck. CARE, headquartered in Atlanta, had been conducting programs in
Southeast Asia prior to the tsunami.
On top of the $250,000 donation, Blank,
who also owns Mountain Sky Guest Ranch and two football teams—the NFL’s Atlanta
Falcons and the Georgia Force arena squad—mobilized his teams and associates to
raise more funds for the relief efforts. The Falcons held a tsunami relief
collection at the Georgia Dome prior to the January 15 divisional playoff game,
raising an additional $31,000, while the Force donated 10 percent of all new
season ticket revenue collected that month. To encourage more giving, Blank
matched 2-to-1 every dollar his employees contributed to tsunami relief,
including nearly $40,000 that Falcons players collected in their locker room.
All totaled, Blank’s organizations have contributed nearly $400,000 to relief
efforts.
Overall, the outpouring of support for the tsunami relief effort
far surpassed most goals. A report from the Center on Philanthropy at Indiana
University noted that private donations for tsunami relief from organizations
and individuals in the United States surpassed $1 billion in March. The center
counted $942,315,162 in cash contributions and an additional $117,247,716 in
in-kind donations, such as medical supplies, food, blankets and relief
services.
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