(Illustration by Jim Frazier.)

The Direct Approach

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.

Overlarge Largesse
Nonprofits usually compete for funding, conducting intense marketing campaigns to portray themselves as the first option for donors who want to make an immediate contribution during a disaster. Many of these groups, however, found themselves poorly equipped to respond to the outpouring of support for the Asian tsunami.

The day after the disaster struck, CARE launched an online campaign entitled “Asia Quake Disaster.” The website featured updated news, photos and streaming videos of tsunami victims and relief and recovery operations. It also had a link to a page where donors could pledge funds with a credit card. CARE capped online donations at $10,000 per transaction, and asked that larger amounts be transmitted by mail or phone. In the United States, CARE alone raised $43.3 million. (The group says approximately 8 percent of that figure will be used to cover administrative costs.) The organization admits to being challenged by the deluge of donations. “How soon can we open 60,000 pieces of mail?” CARE development director Beth Gluck asks. “What do we do with all the checks? How soon can we respond back to the donors?”

International aid organizations have also learned not to provide a surfeit of cash to the affected area too quickly.  “We don’t want to overtax a fragile system of domestic NGOs [nongovernment organizations] that lack the capacity to absorb large grants,” says Raymond Offenheiser, president of Oxfam America, an international development and relief agency headquartered in Washington, D.C. Over the long term, a deluge of U.S. dollars into developing economies can also cause local currencies to steeply appreciate, which can lead to rapid inflation.

Large aid groups working in the same devastated areas can also cause confusion and duplicate efforts. Several humanitarian groups may provide medical care to the same refugee camp, while none offers food or clothing. To avoid these missteps in the future, Offenheiser suggests that national governments, with support from the United Nations, implement a formal system to accredit international humanitarian organizations to ensure their qualifications for the scope and duration of the work they propose to do in a disaster area. “Not every group that shows up at a disaster scene is qualified to help out, and their well-meaning efforts can end up hampering relief efforts,” says Offenheiser, who in February sent written testimony to the Senate Foreign Relations Committee on the lessons Oxfam learned from the tsunami response.

Many entrepreneurs and corporations that specialize in infrastructure also offered their technical skills, but most of them lacked international expertise, and few had prior experience in disaster conditions. In the aftermath of the tsunami, international aid groups realized that the speed, quality and effectiveness of emergency response in these highly skilled areas require vast improvements.

To address this problem, CARE, Oxfam GB, Catholic Relief Services, International Rescue Committee, Mercy Corps, Save the Children Federation and World Vision International have collaborated to expand the pool of qualified aid workers to address shortages in skills. The Emergency Capacity-Building Initiative, funded with a grant of $5.18 million over two years from the Bill & Melinda Gates Foundation, aims to combine the agencies’ collective knowledge and experience to hire and train personnel who can lead rebuilding efforts in tsunami-damaged areas of India, Indonesia, Sri Lanka and Thailand, replacing emergency workers who will return to their usual duties in other countries. Most new staff will be citizens of the countries in which they work.

“Each successive major disaster offers the humanitarian aid community lessons in how we can improve our work,” Offenheiser says. “But unless those lessons are implemented by the scores of aid groups flocking to southern Asia, our collective best practices will be submerged in an anarchy of altruism.”

Marilen Cawad, an intern at Worth, is studying journalism and international affairs at Columbia University. marilenc@worth.com