After the hurricanes, relief fundraising stumbles

As Hurricanes Gustav and Ike zeroed in on the Gulf Coast, the Mennonite Disaster Service — a small nonprofit based in Akron, Pa. — ramped up its phone center to handle the expected flood of calls from loyal backers seeking to donate or to volunteer in the disaster area. But unlike the outpouring of support after Hurricane Katrina in 2005, this time the phones stayed mostly silent.

“Usually our constituents rise up and say, ‘What can we do?’” said Scott Sundberg, spokesman for the relief group. “This time, I’m saying, ‘Why aren’t they?’”

The problem is not particular to the Mennonite group. Across the board, relief organizations report that they are struggling to raise funds to pay for their operations in Texas and Louisiana, where thousands of people remain in shelters after the storms. The biggest reason they cite is the dearth of media coverage, which has been diverted by a raging financial crisis and presidential elections.

“Because of the other big news stories that are out there … the cameras and the lights didn’t stay on to show the need that people have,” said Suzy DeFrancis, spokeswoman for the American Red Cross, which is operating 57 shelters for roughly 6,000 victims of Gustav and Ike and has served 4.5 million meals. “It’s not that the American people don’t care, but that they don’t know.”

When Hurricane Katrina hit, by comparison, public interest was high, both because the damage was of epic proportions and the initial response to the emergency was a dramatic failure. That translated into weeks of non-stop media coverage. The wrenching images of New Orleansians sweltering in the Super Dome and wading through chest-deep water captivated the public, dominated broadcasts and prompted individual and corporate donations in the billions.

“The media coverage plays a huge role in disaster relief giving,” said Patrick Rooney, executive director of the Center on Philanthropy at Indiana University. “If you think about Katrina coverage …  broadcasters would say ‘if you want to do something to help, visit these Web sites. … In this case it’s just not the same.”

A more perfect storm
The media deployed vast numbers of staff to the Gulf Coast for Gustav and Ike, but he the attention was short-lived. Gustav was initially bearing down on New Orleans, raising the specter that the newly repaired levees could fail, but the storm veered off and clobbered the bayou to the west. As Hurricane Ike headed for landfall, it looked like it could be another Katrina. When it hit on Sept. 13, though, it was not as deadly as anticipated.

The collapse of the financial services giant Lehman Brothers on Sept. 15 and dire predictions of financial collapse quickly pushed the story out of the top spot and spun newsrooms in a new direction.

But while neither of the hurricanes were as severe as forecast, they did do considerable damage. Gustav topped levees and flooded many lowlands in Louisiana, while Ike clobbered a 500 mile stretch of Texas and Louisiana coastline, devastating the barrier island of Galveston, and causing power outages for millions.

For the small Mennonite Disaster Service, which depends almost exclusively on individual donations, the difference between the support it received after Katrina and the response to Gustav and Ike could hardly be more dramatic. Since early August, the organization has received about $7,000 in donations, compared to the $8 million that poured in shortly after Katrina hit. That means that the nonprofit's initial work in the hurricane zone is being covered largely out of its general funds.

Save the Children, a nonprofit that does relief and development work worldwide, told msnbc.com that it also has seen a very weak response in Web donations or checks from the general public. But Anne-Marie Grey, vice president of fundraising for the Washington D.C.-based organization, said the group was able to make up for the shortfall thanks to about $600,000 in corporate donations.

That has prompted Save the Children to focus its upcoming fundraising appeals entirely on foundations and corporations. “It is a very targeted appeal that we are focusing on (entities) who have consistently given to our programs,” she said.

“We’re not seeking the mass market,” she added. “There’s no coverage of what’s going on right now. It would be throwing away scarce resources.”

Red Cross in the red
No organization has a larger mandate to help — or a larger budget shortfall — than the American Red Cross. Even before the latest hurricanes, the organization had raised just $63 million of the $263 million spent helping out after other disasters — from massive flooding in the Midwest, an early wildfire season in the West and tornadoes in Tennessee.

“It has been a record year for disasters and also a very difficult year for fundraising,” said DeFrancis, the Red Cross spokeswoman.

The Red Cross has called for Congress to provide $150 million to help cover costs — a request under consideration in the current budget discussions.

The campaign is targeting grassroots giving, which makes up 50 to 75 percent of Red Cross funding. It has the support of both the presidential candidates, who have exhorted Americans to donate, and from the NFL, which has plugged a text-message fund drive.

“We recognize in an economy where people are concerned about the future, when gas prices are high — all that does eat into disposable income, so it is a challenge,” said DeFrancis.

While the sagging economy and lack of media attention have likely contributed to the Red Cross’ fundraising troubles, the organization's own missteps have played a part.

The Red Cross, which is chartered by Congress to answer all domestic disasters, was criticized for lack of preparation in responding to Hurricane Katrina and is seen by many in the public as having grown so large that its efforts tend to bog down in bureaucracy.

The organization has also run into trouble with donors for diverting funds when it became  “oversubscribed” — or raised more money than is required is raised for a specific disaster. The most controversial example of that came when it decided to redirect some of its Liberty Disaster Relief Fund — money raised to aid people directly affected by the Sept. 11 terrorist attacks — to other purposes. The ensuing uproar among survivors and Congress prompted the Red Cross to reverse the decision, and led to the resignation of Red Cross President Bernadine Healy.

Heavy investments in preparation
Philanthropy experts find irony in the fact that one reason Red Cross and other organizations now lag in fundraising is because of investments they have made in the last few years to prevent these problems that occurred after Katrina.

The Red Cross said it has invested $80 million since Katrina to position warehouses of food and supplies closer to the Gulf Coast and to purchase more mobile food kitchens. The organization has nearly tripled the size of its pool of trained workers and volunteers in the region — from 26,000 in 2005 to 75,000 — and formed partnerships with many of the smaller relief groups to extend its reach.

"You've got to feel for the Red Cross and other agencies," says Eric Kessler, principal of Arabella Philanthropic Investment Advisors, a Washington, D.C., firm that advises private philanthropists. "They put in huge resources in anticipation of demand (from the hurricanes).... They have new leadership and a new understanding of efficiency and advanced planning, so its regrettable that their improvements are being met with a lack of support."

The investment in preparedness may ultimately improve the hurricane relief efforts, but in the meantime, it only seems to worsen budget woes.

“The reality is that if the nonprofits, FEMA and Red Cross were unprepared for Gustav and Ike, there would be a huge outcry, you know, ‘Didn’t we learn anything from Katrina?,’” said Rooney at the Center for Philanthropy. “So the expectations have grown, but the giving hasn’t.”

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