Close to a billion dollars have been given since Sept. 11, 2001, to charities handling relief efforts for the events of that day. Not surprisingly, questions about how that money would be used soon followed.
There are important lessons to be learned from the experience of organizations such as the Red Cross, which recently responded to public concerns by announcing that money in its Liberty Fund would be used exclusively for assistance to those directly affected by the Sept. 11th disaster. Debates in the media have highlighted some of these lessons but obscured others. Here are three key lessons for nonprofits and an important lesson for donors as well.
Lessons for nonprofits
– Be careful about any restrictions in appeals for funds. Charities should listen to the concerns of donors and not mislead them about how funds are used, but it is generally better not to make promises which may hamper an organization’s ability to use funds in the best way possible. Restrictions matter — if donors are told funds raised will be distributed directly to families of those who died in the attack, for example, then there is a legal obligation to use them that way.
Most organizations, including the Red Cross, did not actually make the mistake of restricting their appeals after Sept. 11 that narrowly, but public perception matters, too. Many people simply divided the funds raised by the number of people killed and assumed each family would get a check for that amount, forgetting other needs such as counseling relief workers, helping people who were injured or lost jobs, dealing with issues of discrimination and emotional trauma in the community, or being ready to respond to any future acts of terrorism, not to mention the costs and difficult decisions just in distributing funds to families.
Government relief funds for families of Sept. 11 victims will actually be many times larger than private aid, and the families of those killed that day may end up being the best-compensated of any major disaster in history. This is not a bad thing, and no amount of money can compensate for a single life or the incredible suffering of that day, but the losers in restricting funds raised only to those directly affected by Sept. 11 may be the victims of the next disaster, or even those whose lives have been devastated here and abroad by these events but who may not have a direct claim as a victim.
– Communicate well. Some nonprofits have been slow to respond to criticism or to explain their use of funds clearly. Many of the issues around use of funds after Sept. 11 arose from problems in communication in the first place. Nonprofits must be prepared to share information, correct misunderstandings and respond to questions even in a crisis. They also must track and account for finances properly, assess and evaluate programs (learning from both successes and failures), and report fully and openly to the public.
– Collaborate. One of the trickiest issues after Sept. 11 has been coordination among multiple nonprofit organizations and government funds and agencies. Even if the task were just to distribute funds to families, there would still be a lot of coordination needed. Which funds go to whom? Who keeps the official list of victims, and who counts as family? What amount of aid should be given to children who lost both parents, a stockbroker with a million-dollar life insurance policy, or families from other countries? Who decides? If ever there was evidence that organizations cannot work in isolation from each other, this is it.
Respond with heart; give with your head
For donors, the key lesson may be this: Respond with your heart, but give with your head. Give where you want to make a difference, but avoid putting unnecessary restrictions on funds, which can even bankrupt an organization if the costs of administering those funds properly are not covered.
Remember that many critical needs do not receive media attention. Not every disaster makes the headlines, especially those in other parts of the world, and there are many needs and opportunities in our communities which are ongoing, in everything from health care and human services to community development and the arts.
To ensure that your donations are used well, it is usually better to give general support to organizations which are effective and accountable for all they do, rather than to specify exactly how or when the funds you give must be used. Get to know the organizations you support, looking for good information about both finances and programs.
When something like a major disaster or the holiday season awakens your desire to give, respond to the call, but pause to think about needs that may not be as obvious along with those that are. It is an ongoing challenge for both donors and nonprofits to use funds as strategically as possible to help make this world a better place for everyone.
Nathan Woodliff-Stanley is executive director of the Mississippi Center for Nonprofits in Jackson. His e-mail address is firstname.lastname@example.org.