Donors collectively give huge sums to disaster relief. But the staggering amounts involved raise a key question: What’s the most effective way to give in the wake of a disaster?
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00:00 - 00:37
Disaster relief involves big dollars. In 2021, research shows that 37% of American donors gave half or more of their charitable contributions to disaster relief efforts. And this year, in the eight months since Russia's invasion of Ukraine, over 1500 grants have been made worth nearly one and a half billion dollars. Most recently, where we're getting a lot of questions in the wake of hurricanes Fiona and Ian, we're seeing a flood of donations pour in. It's heartening to see this kind of empathy in response to human suffering. But the staggering dollar amounts involved raise a key question What is the most effective way to give towards disaster relief?
00:44 - 01:25
Hi everyone. Welcome to Inspired Investing. I'm your host, Clare Golla, head of Foundation and Institutional Advisory at Bernstein. This podcast is where we strive to connect and share insights with listeners like you who are engaged in philanthropy and the broader social sector. Today's guest caught my attention with his recent op ed in the Chronicle of Philanthropy, titled Typical post-Disaster Giving Practices Could Hamper Hurricane in Recovery. That is a tongue twister. As soon as I finished the article, though, I knew I had to have a conversation with the author. Ben Smilowitz. Ben heads up the Disaster Accountability Project and its sister platform, smartresponse.org. Ben, thank you so much for being here this morning.
01:25 - 01:26
Thanks for having me.
01:27 - 01:48
So as I mentioned, your op ed really intrigued me. It's an area of interest to so many of our clients. It's where we field tons of questions. And you point out that disaster relief often follows the typical pattern that unfortunately, in some cases has some unintended consequences. And so we'll get into that. We'll dig into that.
01:48 - 01:53
But why don't we start just with your background and your experience on the ground after Hurricane Katrina?
01:53 - 02:22
Sure. So I was deployed to southern Mississippi after Katrina by the American Red Cross as a volunteer and managed high volume Red Cross sites along the Gulf Coast and saw a lot. And we've all heard about how disastrous that response was. And it was a spectacular failure by the agencies and organizations with critical lifesaving responsibilities. And it was clear to me that independent oversight was essential to make sure agencies and organizations improved and continue to improve.
02:22 - 02:59
So I started the Disaster Accountability Project to do just that. And we've conducted investigations and written reports about emergency and evacuation planning, public health preparedness. We've advocated for Superstorm Sandy survivors. And then after the Haiti and Nepal earthquakes, we wrote reports about where the funds were going, which organizations were soliciting donations and what they were doing. And it became clear that once these donations are sent to these private nonprofit organizations, it's very hard to hold them accountable. Official reporting requirements are minimal and often very vague, and oversight is limited.
02:59 - 03:52
And our investigation found that most donations were getting sent to the large international organizations, and most of these funds were delayed or diverted before only a small amount trickled to the local organizations on the ground. And we found that this is actually very common. We see organizations located far from disasters raising the most. And then after time, sometimes months or even years, those funds may we grant to other organizations. And each time a standard overhead is taken off the top. And that granting process can happen multiple times. And each time a chunk is taken for overhead. And I need to be clear right overhead, taken once by an organization delivering services isn't bad, and we don't want organizations to cut corners and if they're doing the work, they really deserve it. However, 9% shouldn't be taken multiple times on the same donation.
03:52 - 04:03
Okay. So just one quick question. You mentioned private nonprofit organizations. Clearly, all nonprofit organizations are public charities, Right. So what do you mean by that when you say private nonprofits?
04:03 - 04:31
Well, they're public charities, but they're also private organizations. They are technically and legally supposed to be accountable because of their tax status. But the reporting requirements are just very, very minimal. And this isn't an attack at all on nonprofits. I think they're essential. Right? They fill gaps that government often misses and they have a really essential role. We just need to make sure that the right organizations are raising money.
04:32 - 05:30
Yeah. No, no, I just wanted to clarify that. So that's great. And just to be clear, as you mentioned, look, we're not picking on the Red Cross or any large humanitarian organizations because they do a tremendous amount of good across the globe. Really. You know, one of the things I'm hearing here is this whole idea of accountability right after the fact. And so a lot of these dollars, first of all, are sent out. People see an advertisement on TV or in social media or whatever, like give to this place and folks give to it. They give to household names they trust. Right. And then assume that those large entities will then distribute the funds to the workers on the ground, getting the services to two organizations. So if you can, way we walk through an example of where it may go awry. Right. Because clearly, like, you know, somebody sends money to a large humanitarian organization. Right? They send there assuming and they're trusting that that money goes then to the relief effort.
05:30 - 05:57
So so how to help West on CNN, for example, or a list on a charity navigator after an event. Right. So the question is how those organizations actually end up on these lists. I believe that at many media organizations they've got an intern or, you know, any staff member just collecting the names of organizations, soliciting donations. And everyone's soliciting donations after disasters. Every organization wants a piece of the pie.
05:57 - 06:46
And frankly, a lot of the times these organizations aren't local for sure. Rarely are the organizations local themselves to the location of the disaster. And I don't know that many of these organizations are not even operating in the disaster location. When they're soliciting donations, they may say that they're going to send a team to do an assessment. And that could be a few people to check out what the needs are. And oftentimes, the small print on the donation page or somewhere on the website suggests or says directly that that organization, if they raise too much, is going to save those dollars for a future disaster, which, again, isn't the worst thing. But if an individual or a foundation wants to give to a certain disaster, they should know and and trust that that money is going to actually reach that event.
06:46 - 07:11
And, you know, this problem is so widespread that only 3% of what is donated is found. Know and this is well reported reaches local organizations. And this Candid Council on Foundations report that recently came out found only 13% of U.S. philanthropy for humanitarian funding, went directly to the organizations based in the country where programs are implemented.
07:11 - 07:40
I mean, that's that's wild. So I hear you loud and clear right there, broadcast of here's where you can give or these are household names that you know, folks know about. And there everyone is doing doing their best. Right, to try to support a critical effort. And the challenge is, I would argue, maybe not having information before the disaster in terms of who's actually on the ground in these areas.
07:40 - 07:49
And so then I love you to talk a little bit about smart response. Right. So this is really where your smart response platform comes in, right? Tell us how it works.
07:49 - 08:15
Yeah, exactly. This is exactly why we created the platform. And the idea is that, you know, a report that comes out six months or one year after an event is too late to really guide donor behavior when a disaster happens and donors need to feel comfortable and have information about which actors are operating locally when they're making those decisions to give. And that's within a week or two weeks or a month of a disaster.
08:15 - 08:39
And so we built this platform designed to engage organizations large and small around the world, and they register. And once they're approved, they share information similar to a common grant application. And it's without all the appeals to emotion. And we're collecting information about what they're doing on the ground, their capacity to deliver services, their history of operating in each location.
08:39 - 09:16
And that information put together using a very transparent algorithm that everyone can see, basically organizes organizations by geographic area. We even can draw a radius around the disaster impacted area so prospective donors can see which organizations are operating in the area of disaster, and then they can support these organizations directly. So we don't want a piece of the pie. We're not charging these organizations a fee to register. We're not part of the transaction process. So organizations are not getting the money through us. They're not paying us a percentage.
09:16 - 09:39
So we want to be very transparent and independent of this process so that we can not maintain our oversight role while providing donors with really immediate, almost real time information about which organizations are operating in each location and then identifying ways and avenues for donors to give directly to those organizations, minimizing intermediaries.
09:40 - 10:21
And so sometimes it's a community foundation, right? Sometimes it's the local actor is a community foundation that a donor can engage directly. Or sometimes it's a local women and children serving organization or disability rights or, you know, water, sanitation, hygiene or food delivery organization or just most of these organizations are community based organizations that are going to be around hopefully for years. They've been around potentially for decades, and they're hiring locally. They speak the local language, they're sourcing local products. And honestly, the cost of them delivering services is significantly lower than organizations crossing oceans to deliver services.
10:21 - 10:43
I want to come back to that point in a segue, but before we move forward from the platform itself, I'm curious, so you've been at this a while, growing this platform. How many organizations, roughly speaking, and how many geographies? Give me a scope of sort like the size of the platform right now and when will you feel like you've achieved real success or when's that tipping?
10:44 - 11:11
Yeah. So we're building it. It's right now there are about 600 organizations that have self registered, over 600 that have self registered from over 60 countries. And Asia is probably the winner in terms of the number of organizations that are registered. Many across the US, some in Africa, some in South and Central America, less in Europe. But we do have some organizations in countries surrounding Ukraine that are addressing the refugee crisis.
11:11 - 11:48
And then our goal is to hit 2000 to really that as a tipping point where once we reach 2000, I think that every organization is going to feel like they need to register in order to be included. And really, if you think about it, this is a transparency endeavor more than anything, because if organizations are registering and sharing information, much of this information is not available anywhere else. And there's an incentive for organizations to share this data if they feel like donors are using it. So it's this cycle, and the more donors that use it and the more organizations that benefit, the more will participate and share more frequent information.
11:49 - 12:30
And this is really seen as a public good. It's not only a donor value website, it could benefit actual survivors in in country that are trying to figure out which organizations are present and what services they're providing and what their inventories are. And this is really a resource for media on improving the reporting to those. How to help lists can be improved even for coordinating agencies. And we've seen all types of users approach us with interest from people in Haiti to aid organizations trying to figure out who else is operating in a location to journalists. They're looking for a contact on the ground in Bangladesh after a storm.
12:31 - 12:44
This is amazing. There are enormous amounts of applications of this. Right? I love it. Sort of a virtuous cycle created by hopefully FOMO. Right. Or the fear of missing out for a number of organizations and folks. Right. At some point, that's the tipping point.
12:44 - 13:04
One of the things you mentioned you've mentioned in the past is you've listed the data that you're collecting is the number of local staff, right? And sort of like the the number of direct services provided. You've mentioned cultural competence and the importance there. Can you speak a little bit more about the value of cultural competence?
13:05 - 13:38
Well, yeah. And we just see disaster relief now working in so many locations around the world. And we hear these stories and they often lead to donor fatigue. And ultimately, not only do we want the immediate response to these disasters to be improved, we want these communities to strengthen their resiliency. And these local organizations hire locally. They speak the local language. They understand the communities they're serving. They understand this the services and types of services that are needed locally.
13:39 - 14:29
And so oftentimes we see these outsiders come in with sometimes different motivations, right? They might be religious. They might be who knows what the motivations are. And we've seen abuses perpetrated by outside organizations that make the news every once in a while. And I think we have an opportunity to invest in these local communities where the dollar goes a lot further and where, you know, we might be able to avoid some of these abuses that we've seen over the years following disasters. I mean, cholera, right, that that arrived in Haiti because of outsiders. And we see reports of sexual abuses by some organizations that, you know, risen in the news lately.
14:29 - 15:22
Look, we're not saying these local organizations are perfect. And I frankly suggest that donors distribute their funds across multiple organizations instead of just one. And they don't have to give as much necessarily as they would give to an international organization right away to some of these local organizations. But we're working to help these donors feel more comfortable by also sharing. Who else is that in these organizations on the ground? Right. Who else donates to them? Right. Who are their partners? And so if a donor sees that one of these organizations is working with an Oxfam or a USAID or a Red Cross, they might feel like, well, if these organizations are receiving money from them, then it's not like they've not been vetted by anyone before. And it might help these donors feel more comfortable engaging them directly.
15:22 - 15:25
Now, that's a really good point in terms of the partnership.
15:25 - 15:47
I want to go back to this piece on folks flying in right to local areas because, you know, I'm a money person, right? I'm always interested in the financial effects, intended or unintended. And you've described, you know, essentially one of the unintended consequences of some of these efforts. Being hyper inflation in communities. You want to talk a little bit about that?
15:47 - 16:40
Yeah, there's a term called type ed where, you know, we spend all this money on aid for other countries, but we end up buying the supplies from our side and then we bring those supplies to a country and that can, you know, disrupt local supply chains, right? The local rice vendor isn't going to sell their rice because it's coming from overseas for free. And then we've now messed up the local economy. So even housing stock, right. You have all these people from overseas come in looking for a place. And then now rents are going up because they're trying to attract outsiders and knowing that they can pay. So we just need to be more careful about how we how we empower organizations to show up for what they may have good intentions. And certainly the people that are going to deliver the services almost always have really good intentions.
16:40 - 17:22
But that's not necessarily enough, right? There are actors on the ground that have been working there for decades that know their communities. And if we invested in them, then the goal ultimately is to flip the power dynamic, Right? So if some organizations from the outside and we know some organizations on the outside are providing great value, these local organizations should be in the position of power to decide which outsiders to work with, instead of having the outsiders decide which local groups to work with. Or, you know, from the perspective of these local organizations, many of them are so cash strapped, they'll work with anybody to get resources. And then the power dynamic is just is flipped. And it's not it's not healthy.
17:23 - 17:45
One question that I forgot to ask earlier is how specifically is is smart response different than other search engines out there? Right. Like I'm thinking about if you just Google like disaster relief listings or whenever your charity Navigator pops up Candide Center for Disaster Philanthropy map, you know, sort of pops up. Explain some of the differences here.
17:45 - 18:21
Yeah. So this is data driven, right? So when you do a search on Google, that's like SEO driven, right? And so they're paying for ads and it's pay for placement. So if if I wanted to raise money for a disaster, I just create a donation page and make it look like I'm doing something. And oftentimes those pictures aren't even reflective of the location they're responding to. And then I hire someone to do some great SEO and they get me high search results on Google or whatever search platform. And I can raise a lot of money if I want. Like that's how a lot of this works.
18:22 - 18:53
And frankly, too many of these lists are really based on who's appealing for donations, who's saying that they're fundraising, they have nothing to do with who's actually delivering services or whether they've been there before, whether they've got local staff, even if they say they have local partners. The question is when they're going to actually release those grants to those partners, how much those partners are going to get, they might end up getting only, you know, 3 to 5 or 10%, maybe ten, maybe 20%, but that's still not so great.
18:53 - 19:32
So we need to use real information, real data. And too often that information comes six months or a year or longer after an event about who was there. So that's what Smart response is offering. It's information about who's actually there now, who is there. And the most recent quarter, we ask organizations to update their profiles every quarter, and organizations with updated profiles rise to the top. You know, organizations with local staff and direct services rise to the top versus organizations that don't have local staff or provide, you know, an indirect service, which would mean like a grant to another organization to provide the direct service.
19:33 - 20:21
So, you know, I'm not saying that this platform is perfect. I'm sure that there are many ways to improve, and we're certainly open to that. And frankly, we're in the process of building an entirely new site with a new, you know, design and more questions for these organizations to answer. But we're also creating a lot of hope for these organizations that they're going to get noticed. Right. And that them sharing information is going to bring them value. And so this is really important to be here and to talk about this, because we want people to at least check this out. Right. Like there's no cost to check it out. This is an open platform for everyone to use. And then we're not even offering to be a part of the transaction. The donate buttons go to each organization directly.
20:22 - 20:36
And so, Ben, I have to ask, okay, I'm an organization locally in an area that maybe hasn't been devastated by or maybe it has by by some sort of natural disaster. How do I get on to this? Where do I go? Yeah.
20:36 - 21:17
So organization can can register on our platform. And then we do a basic vetting and we're constantly reaching out. To organizations. We have volunteers identifying organizations to invite all over the world, and most of the organizations on the platform, I would say, were invited by us because we found them. But then sometimes they'll share information about us on a in a WhatsApp group or some social media in a country. And then all of a sudden we have over 60 organizations in Pakistan that have registered or, you know, over 40 in India. And, you know, the goal is to not only have, you know, 40 in India, but have 20 in each state in India. The goal is really to scale this tremendously.
21:18 - 21:21
And so I go to smart response dot org.
21:21 - 21:59
Yeah smart response dot org. And you know we've talked a lot about global. We also have organizations and over 25 U.S. states and territories, many in Puerto Rico and you know sometimes have organizations haven't been hit by a disaster recently. They're not exactly thinking about taking the time to share information in case an event does happen. And so sometimes you really do have to try to convince organizations this is worth it. But for those organizations that have experienced disasters recently, they've watched that money fly elsewhere. And this problem is is as real in Louisiana as it is Bangladesh.
22:00 - 22:22
Absolutely. I couldn't agree more. And look, we have hundreds and hundreds of organizations who partner with us directly, right? Have business relationships with us. We want them to reach out to you as well. So I think this is really great. So then you've given us a ton to think about today. Let's try try to distill it down. Right. Maybe top three takeaways for donors. What would be the first?
22:23 - 22:52
Well, I think the first is let's be careful using these how to help lists after disasters that are created by anyone without any sort of specific create, you know, criteria. We need to be careful about who's asking for money and whether or not they actually deserve a dime. When a disaster happens, they may have a great name. They may be operating in one country or one state, but not in another. And so how do we differentiate in the immediacy of an event?
22:53 - 23:05
So it's about the data. So it's really understanding the limitations of search engines, understanding the limitations of these lists that are out there and how they may have been originated. So that's great. And then the second takeaway.
23:05 - 23:34
Well, we have an opportunity to use location specific data. So I would really encourage everyone to check out smart response dot org. And if they see something they like, let us know or if there's something that they'd like to see in the future, let us know. And then we might be able to include that and that. And also our goal is to grow this, right? We want to go from 600 to 2000 and we're a nonprofit ourselves, so we'd love to have conversations with with anybody interested in learning more.
23:34 - 23:50
Well, look, Ben, this audience is not shy, so you may get some some follow up. So from this, both from from donors and funders and organizations seeking support. So any final bit of advice, any last pieces of information you'd like to share?
23:50 - 24:37
No, I think ultimately we need to go back to the goal of shifting the power and the top down to bottom up responses. And to keep in mind this 3% right now, if only 3% is reaching the ground, we can do so much better. And so if we can raise that to 20% or 40% over the coming years. Right. That would be a tremendous change in our responses to disasters and our ability to prevent and mitigate future ones. So we're offering one solution. I love to hear about others. You know, some call this localization of of humanitarian funds. We call it that, too. We also call it, you know, improving effectiveness or improving transparency and accountability. Yeah, I really appreciate the exposure and the conversation today.
24:37 - 24:50
Yeah, Well, thank you. We appreciate all the work you're doing to try to drive more dollars to organizations doing this work on the ground. It's it's really important stuff. So thank you. It's all we have time for. Ben, thanks for joining me today.
24:50 - 24:51
Thanks so much for having me.
24:52 - 25:21
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