Direct Relief International is one of the frequently mentioned disaster relief organizations providing aid to the victims of the South Asia earthquake-tsunami. When we did our original post regarding earmarking, we indicated that their online donation form did not specifically provide for earmarking of funds for the tsunami disaster. Direct Relief International has now addressed the issue of earmarking in a very detailed way. There are no...
| Our Guide, Avoiding Trouble While Doing Good, A Guide for the Non-Profit Director and Officer, devotes an entire module to fundraising issues, as well a module to the tax aspects of charitable giving. You should buy a copy of our Guide today. Call us at 773-325-2124 for additional information, or visit our website at http://www.charitygovernance.com. We also do on site training. Be sure to consider a donation to a reputable relief organization to aid the victims of the South Asia earthquake-tsunamis disaster. |
ambiguities in their policy, the relevant portion of which is set out below.
Statement Regarding Contributions Designated for Tsunami Relief
... [B]ecause of the outpouring of generosity and contributions that Direct Relief and it appears many other organizations are receiving, we think it necessary to state very clearly our policy with regard to specifically designated contributions and what we will do with money that we receive that is designated for the tsunami relief efforts.
First, Direct Relief has never used a specific tragedy as a general fundraising opportunity. We will not do so in this instance.
Second, we will establish a separate bank account into which specifically designated funds will be deposited.
Third, we consider the funds that contributed specifically for this disaster to be entrusted to us for the benefit of people whose lives have been tragically affected. The people who have called us, many grieving and emotional about the tragedy, have made it clear that they want their money to assist these victims – not others in other places that we assist who also face extraordinary challenges and are vulnerable. We understand this, and we will honor that intent.
Fourth, although all of our worldwide activities are compelling and extremely important on a humanitarian basis, we will not redirect any funds that we receive for this tragedy to any other tragedy. We have no fine print or qualification in our accepting of a donation for this tragedy. We will use this money solely to pay for expenses directly related to assisting people in the affected areas.
Fifth, if the type of medical material assistance that Direct Relief provides at some point becomes less important than another type of assistance that the victims need, we will make cash grants to the health facilities that will have a long, hard road in the future or to other organizations who we are convinced will spend the money wisely and efficiently to assist the victims.
Sixth, we will spend money from this account only when it is clearly related to the tsunami relief effort. These expenses will include such things as air-cargo transportation, procurement of medicines,supplies, medical equipment, or other health-related items (such as water purification equipment) that are not donated, packaging material, travel costs for professional staff or contract experts to go disaster areas to ensure efficient distribution and use of material, or cash grants to organizations providing on-site relief. We will not pay the salaries of our current professional staff from the tsunami-relief contributions, even though many of us will spend a significant amount of our time on this disaster effort.
Seventh, our organization has ongoing expenses that we need to raise from friends and supporters each year. To conduct our assistance programs we need to maintain our warehouse, biomedical and pharmacy operations, obtain medical material contributions or buy essential products, pay for overseas shipping, and pay our staff of 29 persons. We typically operate at a deficit for 50 out of 52 weeks, and this tragedy occurred during the last week of the year, which is when we learn whether we made our budget for the year. We still need to raise funds to cover our general operating expenses, but we will not use tsunami-relief contributions for this purpose.
Eighth, we will not allocate any percentage of general administration, fundraising, existing warehouse space costs, or general overhead to the tsunami relief fund.
Finally, we believe strongly that this tragedy is not about raising money for Direct Relief International. We have long experience in one important area of medical assistance, but the disaster has destroyed many other things that are important for people to regain their lives, livelihoods, and hope for the future. Other organizations do other things very well that are essential for the victims – food and shelter efforts, water and sanitation and, in the coming months, economic development, and reconstruction. We want prospective donors to understand the complexity of this disaster, so that each area receives adequate support. We also encourage all prospective donors to examine our financial records, which are easily accessible on this website.
This disaster is beyond the scope of any one organization or, indeed, government to address fully. We are committed to doing whatever we can within our area of expertise to help the people who have suffered, and we will work closely with all other groups to ensure that the funds that have been so graciously and generously provided are spent as efficiently and wisely to help the people for whom the donations have been made.
Thank you for your generosity.
Thomas Tighe
President and CEO
December 31, 2004
So there you have it. We can't endorse Direct Relief International in terms of the efficiency or efficacy of its operations because we aren't in the business of endorsing or rating charities. However, we think the quoted policy statement says a lot about this organization and its people.
While we applaud the transparency and willingness to honor donor intentions, we do not entirely agree with the policy. In our mind, the policy is well-intentioned, but may place the organization in the position of "burning down the house to stay warm." Specifically, we believe donors need to be realistic about charities. As we have said before, the people who work full-time for charities are entitled to be paid. Consequently, we don't understand why some of the tsunami relief funds shouldn't go toward paying people who are directly engaged in the relief efforts. There is nothing wrong with that. For those same reasons, we do not object to a reasonable overhead allocation. It costs money to run a charity efficiently. Once again, as we have said before, we would rather cover some overhead with our gift if it puts in place internal and financial controls that assure that the money is not stolen or misapplied than live under the illusion that there are no costs in running an organization and protecting our investment in a civil society.
With that in mind, we would hope that those who do choose to make a contribution to Direct Relief for tsunami relief consider splitting their donation between tsunami relief and general operations. In effect, Direct Relief has given you, the donor, the opportunity to say what you believe a reasonable overhead allocation should be. Donor intention should carry the day, but donors should be realistic.
What we totally applaud is the willingness to reallocate the funds to other organizations if Direct Relief no longer needs the funds for its tsunami relief efforts. We also like the segregation of funds. And as we have already said, we very much like the transparency even though we do not agree with the entire policy.
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