Public Expectation and Charities’ Response

The UrbanInstitute

After KATRINA

Edited by

Elizabeth T. BorisC. Eugene Steuerle

Emerging Issues in Philanthropy Seminar Series

Public Expectation and Charities’ Response

The UrbanInstitute

After KATRINA

Edited by

Elizabeth T. BorisC. Eugene Steuerle

Emerging Issues in Philanthropy Seminar Series

Copyright © May 2006. The Urban Institute. All rights reserved. Except for short quotes, no part ofthis paper may be reproduced in any form or used in any form by any means, electronic or mechan-ical, including photocopying, recording, or by information storage or retrieval system, without writ-ten permission from the Urban Institute.

The editors are grateful to the seminar participants and to the authors who expanded their remarksinto the essays presented in this collection. We wish to acknowledge the work of the steering committee that organized this seminar and the 13 that preceded it.

Emerging Issues in Philanthropy SeminarsSteering Committee

Elizabeth T. Boris and C. Eugene Steuerle, Center on Nonprofits and Philanthropy,The Urban InstituteMarion Fremont-Smith, Hauser Center for Nonprofit Organizations, Harvard UniversityEvelyn Brody, Chicago-Kent College of LawJoseph J. Cordes, George Washington University

The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy ofpublic consideration. The views expressed are those of the authors and should not be attributed tothe Urban Institute, its trustees, or its funders.

Photo copyright © by Christian Kuffner.

About the Photographer

In addition to being an amateur photographer, Christian Kuffner works for WWOZ 90.7 FM, NewOrleans’ Jazz and Heritage Station, and plays accordion for a local band called the Zydepunks.

Christian is a native of Cuenca, Ecuador.

About the Seminar SeriesThe essays in this collection grew out of the 14th Emerging Issues in Philanthropy sem-inar, “Charities Response to Disasters: Expectations and Realities,” held on December2, 2005, in Cambridge, Massachusetts. This seminar series is jointly sponsored by theCenter on Nonprofits and Philanthropy at the Urban Institute and the Hauser Centerfor Nonprofit Organizations of Harvard University. The seminar was conducted as aroundtable, organized around four themes: expectations of the charitable sector; thecapacity of the sector; lessons from September 11, the Asian tsunami, and HurricanesKatrina and Rita; and aligning myths and realities. Designated roundtable participantsinitiated each topic with brief remarks to start the conversation. The five essays in thiscollection capture the major dimensions of the presentations and discussion.

Marion Fremont-Smith, Hauser Center, hosted this seminar and with co-convenors Elizabeth T. Boris and C. Eugene Steuerle of the Urban Institute, summa-rizes the major issues discussed at the seminar in the first essay of this collection. StevenRathgeb Smith, University of Washington, then elaborates on the capacity of the localsecular and religious nonprofits to respond to the disasters and the importance of thegovernment’s role in large-scale efforts of this type. Cynthia M. Fagnoni, GovernmentAccountability Office, describes the lessons learned in the response by charities to theSeptember 11 disaster and makes preliminary observations about how those lessonswere applied after Hurricanes Katrina and Rita. Karin Kunstler Goldman, New YorkAttorney General’s Office, details the steps taken to oversee and coordinate the chari-table response after September 11 in the state of New York and draws out the lessonslearned to inform responses to future disasters. The final essay by Mark H. Moore,Hauser Center, reflects on how the outpouring of donations and voluntary aid con-nects people to those affected by disasters, letting the donors express their sympathywith immediate relief for victims. He notes, however, that this spontaneous responsecan not be rationalized completely; it is the source of the immense strength and con-siderable weakness of the charitable response. The critical role of government leader-ship is thus a necessity—to facilitate coordination among charities and betweencharities and government. The importance of government’s role with charities in dis-aster relief was a common theme both in the roundtable discussion and in the essays.

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Charities’ Response to Disasters: Expectations and Realities . . . . . . . . . . . . . . . 1Marion Fremont-Smith, Elizabeth T. Boris, and C. Eugene Steuerle

Rebuilding Social Welfare Services after Katrina: Challenges and Opportunities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Steven Rathgeb Smith

Observations on Charities’ Response to Hurricanes Katrina and Rita. . . . . . . 11Cynthia M. Fagnoni

Nonprofits and Disaster: The Experience of New York State on September 11, 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19Karin Kunstler Goldman

Disasters and the Voluntary Sector: Reflections on the Social Response to Hurricane Katrina. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Mark H. Moore

About the Editors and Contributors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

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Contents

“Charities’ Response to Disasters: Expectations and Realities” was the subject of the14th seminar on Emerging Issues in Philanthropy, sponsored jointly by the HauserCenter for Nonprofit Organizations of Harvard University and the Center on Non-profits and Philanthropy at the Urban Institute, on December 2, 2005. Participantsaddressed four topics: expectations of the charitable sector; the real capacity of the sec-tor; lessons from recent disasters, mainly September 11 and the 2005 hurricanes; andthe alignment of expectations with the sector’s capacity. Attendees included executivesfrom disaster relief organizations, nonprofit scholars, and members of the press, thenonprofit sector, and government.

“Expectations of the Charitable Sector” centered on the perceptions of threegroups—the donating public, government, and the press. Representatives from disas-ter relief charities described the difficulty of meeting donors’ expectations. Misper-ceptions have plagued these organizations, particularly the Red Cross, since September11. Many donors do not understand that voluntary organizations cannot function, letalone raise funds, without incurring overhead expenses. Some donors expect all oftheir gifts to go to victims—and to go immediately—even though charities may havelong-term needs that require long-term funding. One example was the need to rebuildschools in New Orleans, a need that could not be addressed in the immediate after-math of Hurricane Katrina, but one that would profoundly impact residents’ lives. Tohelp rebuild destroyed facilities and replace equipment in the future, charities mustreserve some portion of donations.

Participants noted that the nonprofit sector functions most effectively as an adjunctto a strong state. The state response was strong after September 11, and the nonprofitsector tried to work alongside the government as well as fill in the gaps the governmentleft behind, both short and long term. With Katrina, in contrast, the immediate stateresponse was weak, and the nonprofit sector had neither the organizational structurenor the resources to meet immediate needs. Yet the public expectation was that theycould and should.

As to the press, since September 11, the media has become more keenly interestedin how charities respond to disasters, requiring reporters to become much betterversed in the operations of complex, far-flung, and often opaque organizations. Thepublic expectations, including those of most editors and reporters, are unrealistic

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1 M A R I O N F R E M O N T - S M I T H , E L I Z A B E T H T . B O R I S ,A N D C . E U G E N E S T E U E R L E

Charities’ Response to DisastersExpectations and Realities

because there is little concrete understanding of charities’basic nature and what they do. Yet the very time the pub-lic wants to know more about charities and their basicoperations is the same time they are engaged in the fre-netic, all-consuming process of providing relief. Thus,reporters must become instant experts at the momentcharities can least afford to educate them. Adding to theproblem is editors’ persistent interest in what they con-sider most newsworthy—controversy such as corruptionand fraud—rather than in what charities are doing well orwhat they can reasonably accomplish.

When it comes to donors’ expectations, the combinedmedia, nonprofit, and government response to Katrinamay have injured the public image of charities, particularlythose engaged in larger domestic relief efforts. Morespecifically, the public’s understanding and appreciationof charitable organizations was partly undermined by five factors: their perceived alignment with the govern-ment response, a response generally viewed as inadequate;heightened expectations, often beyond reason, of whatthese organizations could actually achieve; the deleteriouseffect of around-the-clock reporting on the perceivedimportance of philanthropy in providing relief; what canbest be described as unrelenting negative media storiesthat focused on large relief organizations’ areas of ineffec-tiveness, although few “accountability issues” arose; and,finally, criticism from other charities, partly caused bycompetition and partly by comparing traditional domes-tic organizations with international relief organizationsthat responded to Hurricane Katrina.

Participants agreed that charities at times were theirown worst enemies. It is time to rethink not only theappropriate charitable responses to large-scale disasters,but to increase the public’s—and the government’s—understanding of what charities can actually do and wheretheir limited funds can best be deployed. Also required isclear public recognition that charities cannot function ifthey cannot use a portion of contributions for basic orga-nizational needs.

Finally, regarding government expectations, partici-pants noted an internal tension between the rules (implicitor explicit) for government relief and that of charities.“Equal justice under the law” is one underlying precept ofall governmental responses, which implies that govern-ment help all people in similar need and avoid random(and what can be perceived as arbitrary) allocations ofassistance. At the same time, in a disaster, the best up-frontresponse may be to attend to immediate needs, regardlessof whether recipients have alternative sources of assistanceor even their own assets. Charities tend to be less bound by

the equal justice rule and more bound by donors’ wishesand limited networks of contacts.

Questions were raised by the participants as to thedegree to which charities are bound by donor intent; forexample whether donations for Katrina relief could be usedfor the victims of Hurricane Rita, or whether surplus con-tributions could be held to meet future disasters. It wasnoted that the law does contain procedures for addressingthese situations, in particular granting the courts wide flex-ibility to modify the terms of charitable gifts to meet unan-ticipated circumstances, such as excess funds. It is the dutyof charities, however, to assure that the appeals they maketo the public are clear as to the proposed use of their gifts,most particularly that some portion must, and will, be usedfor overhead or the charity will not be able to function.

The group next considered “The Real Capacity of theSector,” beginning with the advantages and disadvantagesof relying on nonprofit organizations, as compared withpublic agencies, to respond to the consequences of naturaldisasters. On the plus side, nonprofit organizations canmost effectively call forth more resources from the privatesector, in contributions of money and time. They can alsorespond flexibly to gaps resulting from public sector con-straints—public agencies’ poor management and theirrequirement to provide equal justice in service. But non-profits have clear limits, not the least of which are resourceconstraints and potential conflicts (such as between ful-filling missions and accommodating donor intent).

Unlike government, nonprofits do not tend to system-atically assess their efforts. No organization analogous tothe Government Accountability Office, with a mission toprovide nonpartisan and disinterested analyses of char-itable efforts, is preparing charities for future disasters.Thus—not entirely surprising—one criticism was thatlessons are not adequately learned from prior disasters,including disasters in other countries.

The Red Cross, which raised nearly $2 billion in dona-tions for Katrina relief, was widely criticized for respond-ing to the hurricane ineffectively. One limit on the RedCross’s effectiveness was inadequate organizational capac-ity in the Gulf region. Louisiana had only 6 local Red Crosschapters; Alabama had only 5; Texas, only 15—in contrastto states like North Carolina with 29 chapters, or Con-necticut with 13. One commentator noted that the rootsof this lack of infrastructure lie deep in Southern culture:its historic, legal, and political hostility to secular charities;its preference for governmental rather than private serviceprovision; and its charitable emphasis on sectarian (espe-cially evangelical) organizations, which usually have mul-tiple objectives. Participants suggested that the Katrina

2 After Katrina

relief crisis raised important questions about the viabilityand strength of secular nonprofits in certain regions of thecountry, as well as the management and governance oflarge federated organizations like the Red Cross.

A survey conducted by the Urban Institute and theLouisiana Association of Nonprofit Organizations exam-ined the impact of Katrina and Rita on direct health andhuman services provision, the current gaps in Louisiana’ssocial safety net, and the needs of local nonprofits them-selves (Auer and Lampkin 2006). The survey covereddirect health and human services providers in Louisianathat were affected by the hurricanes. Preliminary resultsshowed that nearly half of the 360 responding providerswere fully operational, and 65 percent expected to be sowithin the year. Another quarter were operating with lim-ited services. However, charities urgently needed paid staffand volunteers, office supplies, and facilities for opera-tions. Funding needs were being met primarily by individ-ual, corporate, and church donations, followed by othernonprofits and foundations. Only a few agencies reportedreceiving money from FEMA or other federal agencies,while a larger percentage received help from state and localagencies. With regard to health and human servicesproviders, the three needs most mentioned were housingconstruction, repairs, and search assistance; mental healthservices; and job training, job placement, and economicdevelopment. Although data are preliminary, it could helpplanners, policymakers, and funders better understand theextent they can rely on nonprofit service providers torebuild communities and meet residents’ needs.

A survey by the Center on Philanthropy at Indiana Uni-versity probed whether disaster relief giving displaces giv-ing to other charities. The first survey was of more than1,300 households following the September 11 attacks.While the philanthropic response to September 11 in 2001and 2002 totaled $2.8 billion, this constituted only 0.5 per-cent of total giving. Most individuals reported makingcash or in-kind gifts. The mean cash gift was $134, but themedian was $50, with 74 percent giving $100 or less. Thecenter also surveyed several hundred senior developmentofficers around the country in November 2001 and foundthat most thought there would be a reallocation of giving.However, in May–November 2002, they believed thatthere had been only a small reallocation. The center’s sta-tistical analysis of giving in more than 50 crisis years indi-cated that giving goes up in crisis years if economic factorsare ignored, but if they are controlled for, no statisticallysignificant relationship is found. Rather, economic factorsplay a much greater role in year-to-year variations in giv-ing than do disasters.

Several lessons were learned from September 11, theAsian tsunami, Katrina, and Rita. To begin, the recoveryefforts required after September 11 and those that fol-lowed in the wake of the 2005 hurricanes were funda-mentally different. In addition, both government andprivate sector agencies have inherent limitations; eachshould try to develop their capacities in ways that bestcomplement the other.

Next, the roles of both the Government AccountabilityOffice (GAO) and the Internal Revenue Service (IRS) inconnection with disaster relief were described. The RedCross is exempt from oversight by any agency other thanthe Department of Defense, thereby insulating it fromoversight by the GAO. This is a serious limitation, becausethe Red Cross has been designated as the primary respon-der to disasters. However, in certain parts of the country,notably in the South, it does not have the infrastructureand volunteers needed to fulfill this role. The GAO has rec-ommended that FEMA convene a working group ofinvolved parties to develop strategies for future disasters.

Concerning the IRS, it faced serious legal questionsafter September 11. Typically, for a charity to be exemptfrom tax, it must benefit a charitable class and in most sit-uations, apply a needs test. After September 11, the IRSorganized an expedited system for tax-exemption applica-tions from new disaster relief organizations. Three hun-dred forty new organizations were granted exemptionsunder this procedure, and in retrospect, the IRS has admit-ted that it did not make determinations carefully enough.With Katrina, although an expedited system was alsoestablished, applications from new organizations weremore carefully reviewed. As of the end of November 2005,of 380 new organizations seeking exemption, 185 wereapproved, one-quarter were rejected, and the rest wereunder review as of December 1. In a number of cases, inaddition to reviewing the application, the IRS attemptedto determine whether existing organizations might workwith the new entities, rather than be competitors.

A description of the response of the New York attorneygeneral’s office to September 11 focused particularly onefforts to persuade charities to share information abouttheir programs and avoid duplication. Of course, this isnot just an IRS, state attorney general, or governmentissue. The inefficiency and duplication of some charitiesestablishes a case for the charitable sector to do a better jobwith combinations and mergers.

State charity regulators have also been presented withnovel situations and have needed to adopt nontraditionalapproaches to their roles. This was most evident followingthe September 11 attacks, when the New York attorney

Charities’ Response to Disasters 3

general, to help relief organizations coordinate their ef-forts, spearheaded the creation of a shared database thatwould ensure all eligible individuals receive relief serviceswhile protecting the organizations’ and their clients’privacy. As with the IRS, the proliferation of new relieforganizations challenged regulators concerned with en-suring compliance with state law and preventing fraud.Had there not been a strong, well-staffed charities depart-ment in the New York attorney general’s office, these pro-grams could not have been established. The lack of such apresence in Louisiana and Mississippi undoubtedly hin-dered relief responses.

Concluding comments focused on the need for clearerpublic conceptions of what the charitable sector canaccomplish in alleviating the effects of disasters, both longand short term. This includes recognition that the sectoris not the optimum situs for coordinating large-scale responses and that the appropriate role for charities is to complement, not supplant, government and privateefforts; that charities cannot function without funds to

support their own infrastructure and fund-raising activi-ties; and that they must frame their appeals for contribu-tions honestly and without giving potential donors falseexpectations of what can be accomplished, even if thismeans declining to accept contributions with conditionsattached that cannot reasonably be met. Charities alsohave an important role to play in shaping the quality ofgovernment responses to disasters, acting as advocates forvictims, and seeking to assure that these responses are wellconsidered and well funded. Finally, it was agreed thatthese goals are for the present, not the date on which thenext disaster occurs.

ReferenceAuer, Jennifer Claire, and Linda M. Lampkin. 2006. “Open and Operat-

ing? An Assessment of Louisiana Nonprofit Health and Human Ser-vices after Hurricanes Katrina and Rita.” Washington, DC: TheUrban Institute. After Katrina: Nonprofits Respond and RebuildPolicy Brief. http://www.urban.org/url.cfm?ID=900916. (AccessedFebruary 10, 2006.)

4 After Katrina

Disasters are human and economic tragedies that leave in their wake complex socialproblems from homelessness to unemployment, from school closure to inadequatehealth care. The tragedy wrought by Hurricane Katrina has exposed weaknesses in thesocial safety net and in the ability of social welfare agencies to respond to profoundhuman and economic devastation. This essay examines the response of these agen-cies to Katrina and suggests strategies and policies to enhance the capacity of theseagencies to address urgent social problems in the region and assist in the overall recov-ery process.

Social Welfare Agencies and Responding to NeedMany Americans now believe that the best response to disaster relief—and to all socialneeds—can be offered by nonprofit social welfare agencies. Indeed, most privatedonations raised for hurricane relief have been given to large, well-known nonprofitservice agencies like Catholic Charities, the Salvation Army, Goodwill Industries, Vol-unteers for America, Lutheran Social Services, and the American Red Cross. Theseagencies tend to have diverse bases of support that include government funding andindividual, corporate, and foundation donations.

So-called faith-based agencies—including large multiservice agencies such asCatholic Charities or the Salvation Army, small grassroots agencies, and churches—areamong those that provide vital services to people in need. Large agencies typically relyon extensive government funding and professional staff; small agencies, on donationsand volunteers (though some receive government grants and contracts). Manychurches offer social services locally, tending to concentrate on programs that will nottax their limited financial and volunteer resources. Examples are temporary emergencyassistance, at-risk youth mentoring, and recreation (Chaves 2004). Some churches haveundertaken more extensive services, partly in response to the Bush administration’sinitiatives to fund faith-based organizations; yet, these remain a distinct minority.

Recent growth in social service agencies has been concentrated among smalleragencies, both secular and religious, that have few staff and limited resources. Thisgrowth has tended to fragment local service provision because these community socialwelfare agencies tend to specialize and are often dependent upon government fund-

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2 S T E V E N R A T H G E B S M I T H

Rebuilding Social Welfare Services after KatrinaChallenges and Opportunities

ing. Thus, they may not extensively interact with other ser-vice agencies or the community in general. In contrast,large, multiservice agencies such as Catholic Charitiesoften have extensive connections to their local commu-nities because they offer an array of services that requirerelationships with local government and other public andprivate agencies. Larger agencies are also more likely toconduct community-wide fundraising and consequentlyto have corporate funding partners.

The Response to Katrina

The devastation wrought by Hurricane Katrina exposedserious capacity and funding weaknesses among localpublic and nonprofit agencies, which were simply over-whelmed by the vast scale of the disaster. Many agenciesclosed altogether or drastically curtailed services (Auer andLampkin 2006)—and many are still not operational sev-eral months later, though resources to rebuild are avail-able. Faced with the need to quickly provide an array ofcritical services to thousands of people, their infrastructureproved inadequate, either because they had also beenaffected by the hurricane or because they were too small toprovide aid by themselves or in cooperation with the fed-eral and state governments.

Further, Katrina glaringly exposed the fiscal weaknessesof state and local government and the corresponding effecton nonprofit organizations. Prior to the hurricane, spend-ing by the state of Louisiana on nonhealth social serviceswas far below wealthier states, and even below other poorstates such as Arizona and Mississippi (Lewin Group2004). Indeed, Louisiana’s spending on nonhealth socialservices actually dropped in the late 1990s (Lewin Group2004), even as it was rising in most states with increases in federal support for welfare-related services such aswelfare-to-work and child care (Smith, forthcoming).

New Orleans’ lack of government support for nonprofitagencies is reflected in its low per capita expenditures bynonprofit human service and community improvementagencies, compared with those around the country. Forinstance, per capita expenditures in the New Orleansmetropolitan statistical area were $291 in 2003. By con-trast, the per capita expenditures for the two areas withcomparable populations—Columbus, Ohio, and Greens-boro, North Carolina—were $646 and $443, respectively(National Center for Charitable Statistics 2005). Of course,the low per capita expenditures are also evidence of exten-sive and deep-seated poverty in New Orleans andLouisiana in general.1

Given such widespread poverty, nonprofits face a majorchallenge in raising private charitable donations. One indi-cator is the level of giving to the United Way of GreaterNew Orleans. For years, this United Way struggled toincrease its level of private giving, which was low com-pared to cities of similar size. In 2003 for example, totalgiving was just over $18 million, a 5.5 percent decline fromthe previous year. Comparable cities such as Columbusand Charlotte had much higher levels of giving for thesame year ($54.6 million and $37.5 million, respectively)(Chronicle of Philanthropy 2004).

Further evidence of the relatively low level of public andprivate support for social welfare agencies is reflected inthe substantially lower number of nonprofit organizationsin New Orleans and Louisiana compared with cities andstates of similar population. And, aggregate agency assetsare substantially lower than agencies in other states aswell.2 In this funding environment, large multiserviceagencies affiliated with national organizations (CatholicCharities, the Salvation Army, Jewish Family Services, theBoys and Girls Club, the YWCA, and the YMCA) tend todominate local services. These services are then supple-mented by small community-based agencies and localchurches.

This vital role for locally affiliated agencies of nationalorganizations does have some advantages in times ofdisaster. National organizations, with their broad namerecognition and sophisticated fundraising capabilities, canquickly raise substantial private donations, especially viathe web. Predictably, the organizations raising the mostfunds for Katrina relief have been large national organiza-tions. As of February 2006, the American Red Cross hadraised by far the most ($2.1 billion), with the SalvationArmy a distant second ($336 million). Catholic Charities,Habitat for Humanity, the United Methodist Committeeon Relief, and the Clinton-Bush Katrina Relief Fund alsoraised substantial donations (Salmon and Smith 2006).These organizations naturally channeled a substantialportion of donations to their own chapters in Louisianaand the Gulf Coast.

However, the Red Cross has received extensive criticismfor its slow distribution of funds (especially in minoritycommunities in rural Louisiana and Mississippi), its lackof cooperation with local organizations, and its difficultiesproviding aid and relief (Chronicle of Philanthropy 2006;Salmon and Williamson 2005; Wilhelm 2006). The RedCross’s problems are rooted in its relative lack of integra-tion with local networks of social welfare agencies andpublic and private funders. Except in times of disaster, the

6 After Katrina

Red Cross does not work closely with local service organi-zations, given its emphasis on blood donations, temporaryassistance after house fires, relief from smaller-scalenatural disasters, and health and safety courses. By con-trast, multiservice agencies such as Catholic Charities andthe Salvation Army are constantly in touch with a widevariety of local service providers and funders.

In times of disaster, large national faith-related agencies,such as Catholic Charities and Habitat for Humanity, haveanother advantage in responding to disasters: their links tolocal churches. For example, Catholic Charities in NewOrleans has partnered with local churches to help hurri-cane victims and provide ongoing support. Likewise, theNew Orleans chapter of Habitat for Humanity has part-nered with local Baptist congregations to build 400 homesfor needy people, especially dislocated victims of Katrina—a ten-fold increase over the church’s pre-Katrina commit-ment to Habitat.

The larger organizations’ resources are particularlyneeded as churches strive to respond to Hurricane Katrina.Most churches, especially in rural areas, are relatively small(less than 100 worshippers) and focus on support servicesfor members; they lack the capacity, resources, and exper-tise to provide extensive long-term services, especially topeople outside their community.

The value of faith in mobilizing resources is evident inthe many contributions of time and money from faith-related organizations, even from organizations that do nothave a direct connection to the Gulf Coast (for example,Habitat). More than 10,000 religious people from all overthe country have helped rebuild devastated areas. Thesevolunteers come from a wide variety of backgrounds andfaiths; some are formally organized, such as PresbyterianDisaster Assistance, while others are more informal, suchas a Bible study group (Salmon 2006). Many nationalfaith-related organizations such as the Sojourners Com-munity have encouraged citizens to give money and vol-unteer. Church World Service, a ministry of 35 differentdenominations, has raised money throughout the worldfor Katrina victims. Over 56 percent of all donations forhurricane relief were raised by faith-based organizations(Salmon and Smith 2006).

The influx of money and volunteers via the faith com-munity has been impressive. An estimated $3.27 billion forKatrina relief has been raised. Most of this assistance hasfocused, either directly through volunteer help or indi-rectly through donations to local churches and serviceagencies, on supplying emergency assistance, clearingdebris, rebuilding homes and churches, and building

temporary shelters. Thus, assistance has concentrated onmeeting immediate needs and on services that can easilybe performed by volunteers in a short, sometimes discon-tinuous period of time. Volunteers and many of theirchurch or agency partners tend to lack the resources orexpertise to provide longer-term or more complicated ser-vices, such as job training, mental health counseling, childcare, substance abuse treatment, and after-school pro-grams for at-risk youth. Moreover, the amount of moneyand volunteer time contributed—while valuable—is mod-est compared to the overall need. (Estimates of the totalfunding required for rebuilding exceed $200 billion.)

Faith-related service agencies, whether large or small,are also not well-positioned to coordinate case manage-ment for hurricane victims. In the aftermath of Katrina,thousands of people lost their homes, jobs, cars, and com-munity support, creating profound economic and socialneeds that require careful, professional assessment and theintervention of sometimes multiple agencies. The creationof coordinating entities to effectively connect citizens withappropriate services is necessary.

Pressed by the urgency of relief and recovery, state andfederal government have worked together to create casemanagement programs. The state of Louisiana establishedthe Louisiana Family Recovery Corps (LFRC) with themission to “coordinate and mobilize a network of pro-viders, organizations, and government agencies to deliveraid and services to displaced Louisiana families in transi-tional housing throughout the state” (Louisiana FamilyRecovery Corps 2005). The LFRC has, in turn, subcon-tracted with established multiservice providers, includingthe Volunteers of America of North Louisiana, CatholicCommunity Services of Baton Rouge, and a consortium ofestablished agencies in New Orleans for case managementand long-term disaster relief and assistance. (Regionalfoundations including the Baton Rouge Area Foundationand the Foundation for the Mid South have given grantsto community-based agencies such as Catholic Charitiesfor case management services.3) Likewise, the United Wayof Greater New Orleans funds several agencies for casemanagement and coordination services, including theAmerican Red Cross, Catholic Charities, the SalvationArmy, and Jewish Family Services.

Support of case management services exemplifiesfoundations’ new and complicated set of responsibilitiesthat have emerged after Hurricane Katrina. Many foun-dations and their grantee organizations have been dislo-cated, and in some cases sustained damage to theirbuildings. Further, many grantees are in financially dire

Rebuilding Social Welfare Services 7

situations, due to cutbacks in government funding. But,given the many demands on their funds, local and re-gional foundations (and local United Way chapters) canonly give modest grant awards.4 In any event, the dona-tions raised by local foundations are modest relative tothose from large national organizations such as the Amer-ican Red Cross, Catholic Charities, or the Clinton-BushKatrina Relief Fund. For instance, the Baton Rouge AreaFoundation raised $39.3 million through February 2006(Baton Rouge Area Foundation 2006) and the Founda-tion for the Mid South raised $11.6 million (Foundationfor the Mid South 2006). With public attention to Hurri-cane Katrina waning, donations to larger national organi-zations, as well as to smaller regional foundations andnonprofit service agencies, are starting to decline (Salmonand Smith 2006). Consequently, the burden of financiallysupporting the myriad services required to rebuild NewOrleans and the Gulf Coast is shifting to government,especially the new public authorities such as the LouisianaRecovery Authority.

Rebuilding the Social Welfare Service Infrastructure

The philanthropic response to the tragedy of Katrina hasbeen generous and continues to help meet the needs oflocal residents. Local secular and faith-based organizationshave received millions of dollars to help disaster victims.But the devastation has exposed the substantial depen-dence of the social welfare agencies on government fund-ing, the small capacity of most churches and communityagencies, and the lack of coordination among service agen-cies. Further, philanthropy cannot be a substitute for aneffective and assertive government response to HurricaneKatrina; instead it can complement government fundingand services and help government, philanthropy, andbusiness leaders with fact finding and problem solving.The following action steps would greatly improve theimmediate situation for thousands of citizens and thelong-term future of countless service agencies in NewOrleans and the Gulf Coast.

Strengthening the Capacity of Government. Manysocial welfare agencies were already receiving federal fundsthrough Medicaid, block grants, TANF, and other federalprograms. However, the federal government still mustprovide large-scale assistance to local organizations. To anextent, this assistance has been underway since the disas-ter, but mostly focused on immediate and emergencyneeds; more sustained support will be necessary if service

agencies are to meet the demand for mental health care,child welfare, job training, and similar services.

In addition, the federal, state, and local governmentsshould think about creative ways to support the rebuilding,especially given its daunting cost. Government can supportsocial welfare agencies through a variety of direct grant andcontract programs and many indirect approaches, includ-ing tax credits and deductions, government-backed loans,and tax-exempt bonds. In this vein, Congress passed theKatrina Emergency Tax Relief Act in late 2005, to providetax benefits and breaks, including new incentives for char-itable donations, to aid in recovery (Internal Revenue Ser-vice 2006; Steuerle 2005). Tax-exempt bonds can play acritical role in rebuilding physical infrastructure such ashousing, as well as help nonprofit social welfare agenciesrebuild their own operations.

The slow response to the disaster, the fragmentation oflocal services, and the small scale of many nonprofits indi-cate that government must not only financially supportthe nonprofit sector but also monitor, regulate, and pro-mote effective services. The creation of new governmentor quasi-government entities, such as the Louisiana Fam-ily Recovery Corps, is an implicit recognition of the valueof government’s monitoring and integrating role.

Secular and Faith-Based Agencies: Thinking Cre-atively about Sustainability. Given the ongoing strugglesof many agencies and the likelihood of continued fundingshortfalls, both secular and faith-based agencies mustrethink their operations and business plans. Many organi-zations would be well served by greater emphasis oncollaboration, cost sharing, and the colocation of services.Smaller agencies might consider alliances or mergers,especially with larger, more established nonprofits withdiversified revenue streams.

Social welfare agencies might benefit from more al-liances with local churches. Churches and faith-relatedservice agencies are unlikely to provide extensive or long-term services directly; however, their strong personal rela-tionships in the community can help mobilize cash andin-kind donations and may channel donations from out-side the community or region. Churches may also bereceptive to housing service agencies or their programs.

The Role of Foundations. Regional foundations can beespecially helpful in supporting agenda setting and prob-lem solving for the rebuilding process. Given their non-partisan, neutral role, these foundations can help differentpublic and private organizations work together to developeffective, efficient policy solutions. Moreover, foundationscould be especially valuable in crafting innovative, effec-

8 After Katrina

tive solutions to the serious problems of poverty in NewOrleans and the region.

Regional and local foundations, along with local UnitedWay chapters and intermediary technical assistance orga-nizations, can be particularly useful as social welfare agen-cies rebuild their capacity and weather funding cutbacksand staff shortages. Foundations can help nonprofit socialwelfare agencies reduce their operating expenses throughtargeted grants or, where appropriate, facilitate mergersamong local agencies. Direct technical assistance withmanagement technology, such as client tracking systemsand databases, can help ensure victims are connected withappropriate services. As agencies struggle to recover, manymay also need assistance with organizational governanceand management such as board training and recruitment,especially since many nonprofit social welfare agencies are small. Technical assistance can also improve agencies’ability to raise private donations and diversify their rev-enue bases.

Concluding ThoughtsThe nonprofit community is, as noted by Lester M. Sala-mon (2003), a “resilient sector”. Nonprofit social welfareagencies in New Orleans and the Gulf region are certainlydemonstrating resilience as they struggle to rebuild and, atthe same time, meet the needs of hundreds of thousandsof citizens. And organizations are rebuilding, partlythrough the generosity of innumerable individual andcorporate donors from all over the world. National andregional foundations are providing leadership and fund-ing for many vital rebuilding projects. The faith commu-nity—including churches and many faith-based serviceagencies such as Habitat for Humanity—have played ahighly visible role in the rebuilding process.

Yet, the extensive damage and citizen dislocation fromHurricane Katrina and the slow, halting recovery under-scores government’s importance in funding local serviceagencies, providing leadership to the recovery effort, andpromoting collaboration and service coordination withincommunities and the region. Effective nonprofit socialservices depend upon an empowered, transparent govern-ment with an adequate fiscal base and monitoring capac-ity. In the months and years ahead, the government andnonprofit social welfare sectors in the region will have avaluable opportunity to work together to develop new,more effective programs for needy citizens while broaden-ing the participation of different groups and organizationsin the governance and delivery of services.

Notes1. New Orleans, as widely reported in the aftermath of Katrina, is one of

America’s poorest large cities with one of the highest levels of con-centrated poverty (Berube and Katz 2005).

2. The number of registered human service agencies in Louisiana in July2005, prior to the hurricane, was 2,684, with total assets of $1.1 bil-lion. The population of Louisiana in 2000 was 4,468,976, or 22ndamong the 50 states. Minnesota, one notch ahead of Louisiana in thestate rankings (population, 4,919,479) had 4,066 human serviceagencies with assets of $3.8 billion (National Center for CharitableStatistics 2005).

3. The Baton Rouge Area Foundation has played a major role in raisingfunds locally and nationally for relief. The Foundation has even cre-ated a new organization, Foundations for Recovery, to collect dona-tions and then re-grant them to local organizations.

4. Grants have been awarded by, for example, the Foundation for theMid South, the Greater New Orleans Foundation, and the BatonRouge Area Foundation.

ReferencesAuer, Jennifer Claire, and Linda M. Lampkin. 2006. “Open and Operat-

ing? An Assessment of Louisiana Health and Human Services afterHurricanes Katrina and Rita.” Washington, DC: The Urban Insti-tute. After Katrina: Nonprofits Respond and Rebuild Policy Brief.http://www.urban.org/url.cfm?ID=900916.

Baton Rouge Area Foundation. 2006: “Foundations for Recovery.OrgGrant Awards.” http://www.foundationsforrecovery.org/site/c.agLNI2OGKtF/b.1027567/k.9C14/Grants_Awarded.htm.

Berube, Alan, and Bruce Katz. 2005: “Katrina’s Window: ConfrontingConcentrated Poverty across America.” Metropolitan Policy Pro-gram Brief. Washington, DC: The Brookings Institution. http://www.brookings.edu/metro/pubs/20051012_Concentratedpoverty.pdf.

Chaves, Mark. 2004. Congregations in America. Cambridge, MA: Har-vard University Press.

Chronicle of Philanthropy. 2004: “Donations Reported by 432 UnitedWays for 2003–04.” Chronicle of Philanthropy, 14 October.

———. 2006: “How the Red Cross Should Move Forward: Advice fromExperts.” Chronicle of Philanthropy, 12 January.

Foundation for the Mid South. 2006: “Hurricane-Related Grant Awardsof 2.27.06.” http://www.fndmidsouth.org/Katrina_grants_main.htm.

Internal Revenue Service. 2006. “Tax Law Changes Related to Hurri-canes Katrina, Rita and Wilma.” FS-2006-12. http://www.irs.gov/newsroom/article/0,,id=152734,00.html.

Lewin Group. 2004. “Spending on Social Welfare Programs in Rich andPoor States.” Report for the U.S. Department of Health and HumanServices. Washington, DC: U.S. Department of Health and HumanServices. http://aspe.hhs.gov/hsp/social-welfare-spending04/.

Louisiana Family Recovery Corps. 2005. “Louisiana Family RecoveryCorps (home page).” http://www.recoverycorps.org/.

National Center for Charitable Statistics. 2005: “The Aftermath of Ka-trina: State of the Nonprofit Sector in Louisiana.” Washington, DC:The Urban Institute.

Salamon, Lester M. 2003: The Resilient Sector. Washington, DC: Brook-ings Institution Press.

Salmon, Jacqueline L. 2006: “By the Thousands, Faithful Toil to Resur-rect Gulf Cities.” Washington Post, 5 February, A01.

Rebuilding Social Welfare Services 9

Salmon, Jacqueline L., and Leef Smith. 2006: “Two-Thirds of KatrinaDonations Exhausted.” Washington Post, 27 February, A01.

Salmon, Jacqueline L., and Elizabeth Williamson. 2005: “Red Cross Bor-rowing Funds for Storm Relief.” Washington Post, 28 October.

Smith, Steven Rathgeb. Forthcoming. “Government Financing of Non-profit Activity.” In Nonprofits and Government: Collaboration andConflict, 2nd ed., edited by Elizabeth T. Boris and C. Eugene Steuerle.Washington, DC: Urban Institute Press.

Steuerle, C. Eugene. 2005: “Charities on the Frontline and Making theBest Use of Tax Policy to Help Them.” Testimony before the Sub-committee on Social Security and Family Policy, Senate FinanceCommittee, 13 September. http://finance.senate.gov/hearings/testimony/2005test/cstest091305.pdf.

Wilhelm, Ian. 2006: “Charity at a Crossroads.” Chronicle of Philanthropy,12 January.

10 After Katrina

For decades, charitable organizations in the United States have played an importantrole in providing disaster assistance and relief. Many such efforts are local and specificand have not received national attention or scrutiny. In the past four years, however,two major disasters of national scope and significance have heightened the public’sawareness of the important role charities play in assisting those in need. In the after-math of the terrorist attacks of September 11, 2001, and more recently, the Gulf Coastdevastation caused by Hurricanes Katrina and Rita, charities’ roles have been highlypublicized and scrutinized.

As the congressional “watchdog” agency, the U.S. Government Accountability Office(GAO) has conducted reviews of the national response following national disasters andcurrently has several ongoing studies focused on the response to recent hurricanes. Intestimony before the House Ways and Means Oversight Subcommittee on December13, 2005, GAO discussed (1) lessons learned from charities’ response to the September11 terrorist attacks and (2) preliminary observations regarding the performance ofcharities in response to Hurricanes Katrina and Rita. In our preliminary observations,we focused on charities’ fundraising, their efforts to improve coordination, and diffi-culties charities encountered in trying to balance access to services with safety concerns.

The following is drawn primarily from the GAO testimony on December 13, 2005.Information in the testimony was based on ongoing work; published GAO reports;relevant interviews with federal, state, and local government officials in states affectedby Hurricanes Katrina and Rita; interviews with charitable officials and nationalexperts; and data on total hurricane-related donations to charities from Indiana Uni-versity’s Center on Philanthropy.

SummaryGAO learned from its work following the September 11 attacks that charities could do more:

● take steps to make it easier for survivors of disasters to get the help they need,● improve coordination among charities and the Federal Emergency Management

Agency (FEMA),

11

3 C Y N T H I A M . F A G N O N I

Observations on Charities’ Response to Hurricanes Katrina and Rita

● better educate the public about charities’ roles in disas-ter recovery, and

● plan for responding to future disasters.

Following GAO’s September 11 charities report (2002),seven charities formed a network to share informationelectronically about aid recipients and services provided,improve coordination, and ease access to aid. The groupworked in partnership with FEMA to develop a databaseto share information between agencies.

In three-and-a-half months, charities had raised morethan $2.9 billion to assist in hurricane relief and recoveryefforts. In addition, charities have taken other steps toimprove coordination following the Gulf Coast hurri-canes. Charities shared information through meetings atthe American Red Cross headquarters, daily conferencecalls, and electronic databases that allowed multiple orga-nizations to access information about services provided tohurricane victims. Despite these efforts, some charitiesraised concerns about the usefulness of the conferencecalls and electronic databases for sharing information. Forexample, some charities said that daily conference callsafter Katrina included too many organizations and did notprovide the information they needed.

There were also problems with providing charitable ser-vices to victims in some hard-to-reach areas. GAO teamsin the field reported that the American Red Cross did notprovide relief in certain areas because of safety policies. Inareas where the American Red Cross did not operate, GAOteams observed that other charities, such as the SalvationArmy and smaller charities (often local churches), pro-vided relief services. Although smaller organizations provided needed charitable services in the Gulf Coastregion, some concerns have been raised about their abilityto provide adequate services to victims.

BackgroundCharities are organizations established to serve broad pub-lic purposes, such as the needs of the poor or distressedand other social welfare issues. The Internal Revenue Ser-vice (IRS) reported that for 2002, 501(c)(3) organizations,which include charities, had total assets of over $1.7 tril-lion. In 2004, the IRS recognized 820,000 charities, ac-counting for about 90 percent of 501(c)(3) organizations.1

Charities can include organizations with missions such ashelping the poor, advancing religion, educating the pub-lic, or providing disaster relief services. Although the fed-eral government indirectly subsidizes charities through

their tax-exempt status and by allowing individuals todeduct charitable contributions from their income taxes,the federal government has a fairly limited role in moni-toring charities. States provide the primary oversight ofcharities through their attorneys general and charityoffices.

Charities’ Response to National Disasters

Charities have historically played a large role in thenation’s response to disasters. For example, after the Sep-tember 11 attacks, 35 of the nation’s larger charities—including the American Red Cross and the SalvationArmy—collected almost $2.7 billion to provide food, shel-ter, mental health services, and other types of aid.

Charities’ roles in responding to disasters can vary.Some charities, including the American Red Cross and theSalvation Army, are equipped to arrive at a disaster sceneand provide immediate mass care, including food, shelter,and clothing, and in some circumstances, emergencyfinancial assistance to affected persons. Other charitiesfocus on providing longer-term assistance, such as jobtraining, scholarships, or mental health counseling. Inaddition, new charities may form after disasters to addressspecific needs, such as the charities established after theSeptember 11 attacks to serve survivors of restaurantworkers and firefighters.

National Response Plan

The U.S. government’s national response plan provides asingle, comprehensive framework for the federal responseto domestic incidents, such as natural disasters and ter-rorist attacks. The plan provides the structure and mecha-nisms for the coordination of federal support to states andlocalities. Major cabinet and other federal agencies are sig-natories to the plan, along with the American Red Crossand the National Voluntary Organizations Active in Dis-aster (National VOAD), a national charity umbrella orga-nization. The American Red Cross and National VOADare the only nongovernmental organizations that signedthe plan. In December 2004, the Department of HomelandSecurity released the plan, which was developed at therequest of President George W. Bush. The plan incorpo-rates and replaces several previous plans for disaster man-agement, including the federal response plan, originallysigned in 1992. One of the ways the plan changed the fed-eral response plan was by not naming charities active indisaster relief other than the American Red Cross, but

12 After Katrina

instead incorporating them under the umbrella organiza-tion, National VOAD.

The plan designates 15 emergency support functions,each identifying a specific disaster response need as well asorganizations that have key roles in helping meet thoseneeds. The sixth emergency support function, the functionmost relevant to charities involved in disaster relief, createsa working group of key federal agencies and charitableorganizations to address

● mass care, including sheltering, feeding, and emergencyfirst aid;

● short- and long-term housing; and● human services, such as counseling, processing of bene-

fits, and identifying support for persons with specialneeds.

As a direct service provider, the American Red Cross feedsand shelters victims of disasters. In addition to fulfillingthis role, the American Red Cross is responsible for coor-dinating federal efforts to address mass care, housing, andhuman services under Emergency Support Function 6with FEMA. The American Red Cross is the only charity toserve as a primary agency under any Emergency SupportFunction. The plan gives the American Red Cross respon-sibility for coordinating federal mass care assistance insupport of state and local efforts. The American Red Crossalso has responsibilities under other emergency supportfunctions, such as providing counseling services and work-ing with the federal government to distribute ice andwater. FEMA’s responsibilities include convening regularmeetings with key agencies and coordinating the transi-tion of service delivery from mass care operations to long-term recovery activities, among other responsibilities.

National VOAD, a membership organization com-posed of approximately 40 charities that provide servicesfollowing disasters, is designated as a support agencyunder Emergency Support Function 6, but it does not pro-vide direct services to victims.2 Rather, National VOAD isresponsible for sharing information with its member orga-nizations regarding the severity of the disaster, needs iden-tified, and actions taken to address these needs.

Collaboration Can Enhance Charities’Contributions after DisastersFollowing September 11, GAO reported several strategiesthat could help charities enhance their response to futuredisasters.

● Ease access to aid for those eligible. GAO reported thatcharities could help survivors find out what assistance isavailable and ease their access to that aid through a cen-tral clearinghouse of public and private assistance. Wealso suggested offering eligible survivors a case manager,as was done in New York City and in Washington, D.C.,following September 11, to help identify gaps in serviceand provide assistance over the long term.

● Enhance coordination among charities and withFEMA. GAO also found that private and public agenciescould improve service delivery by coordinating, collab-orating, sharing information with each other, andunderstanding each other’s roles and responsibilities.Collaborative working relationships are critical to thesuccess of other strategies to ease access to aid or iden-tify service gaps, such as creating a streamlined applica-tion process or a database of families of those killed andinjured.

● Increase attention to public education. After Septem-ber 11, GAO reported that charities could better educatethe public about the disaster recovery services they pro-vide and ensure accountability by more fully informingthe public about how they are using donations. Chari-ties could improve transparency by taking steps whencollecting funds to specify more clearly the purposes ofthe funds raised, the different categories of people theyplan to assist, the services they plan to provide, and howlong the charity plans to provide assistance.

● Plan for future events. Further, GAO reported thatplanning for how charities will respond to future dis-asters could aid the recovery process for individuals and communities. Although each disaster situation isunique, it could be useful for charities to develop anassistance plan to inform the public and guide charities’fundraising efforts. In addition, state and local emer-gency preparedness efforts could explicitly address therole of charities and charitable aid in future events.

GAO recommended that FEMA convene a working groupto encourage charities involved in disaster response to inte-grate lessons learned from the September 11 attacks. Afterour report, FEMA encouraged charities to form a workinggroup to share information following disasters; this groupbecame the Coordinated Assistance Network (CAN). Theseven charities that formed CAN are the Alliance of Infor-mation and Referral Services, the American Red Cross,National VOAD, the Salvation Army, 9/11 United ServicesGroup, Safe Horizon, and the United Way of America. The

Observations on Charities’ Response 13

group worked in partnership with FEMA to develop a data-base to share information among agencies.

The CAN network addressed several of the strategiesthat GAO identified. To ease access to aid for those eligi-ble, the network is designed to share client data, such asprevious addresses, employment information, and FEMAidentification numbers, among charities. CAN is intendedto ensure that victims need only explain their circum-stances once rather than repeatedly to different serviceproviders. To enhance coordination among charities andwith FEMA, the CAN network is designed to make eachcharity more aware of the services other charities provideand to identify gaps or redundancies in services. Finally, toplan for future events, the CAN network intends to buildpartnerships or working relationships among disasterresponse charities before disasters strike. While the CANnetwork databases are still largely in the pilot phase, bothgovernment and charity representatives have praised thedatabase’s potential to improve collaboration and notedthat it functioned well following the disasters, consideringthat it was not fully developed.

Preliminary Observations of Charitable Organizations’ OperationsFollowing the Gulf Coast HurricanesHurricanes Katrina and Rita caused massive destructionand large-scale disruption of lives in Alabama, Louisiana,Mississippi, and Texas. In response to this destruction, wehave witnessed heroic efforts by public, private, and non-profit organizations and volunteers. These natural disastershave placed strengthening the nation’s emergency responseefforts once again at the top of the national agenda.

Charities Have Raised More Than $2.9 Billion Following the Gulf Coast Hurricanes

As of January 2006, charities have raised more than $2.9billion in cash donations in response to the Gulf Coasthurricanes, according to the Center on Philanthropy atIndiana University. The center notes that this number is alow estimate since it does not include direct giving to indi-viduals, giving to smaller charities, or in-kind donations.The American Red Cross has raised about $2 billion, about63 percent of all dollars raised. The Salvation Army hasraised the second-highest amount, about $300 million,about 16 percent of the amount raised by the AmericanRed Cross.

Charities Took Steps to Improve Coordination but Experienced Some Challenges

Charities operating in the Gulf Coast region following thehurricanes coordinated services through the convening ofmajor national disaster relief organizations at the Ameri-can Red Cross headquarters, daily conference calls orga-nized by National VOAD, and databases established byCAN. Some charity representatives questioned the useful-ness of the daily conference calls and the CAN databases.

In the weeks following Hurricane Katrina, the Ameri-can Red Cross organized a national operations center withrepresentatives from FEMA and several major nationalcharities, including the Southern Baptist Convention andthe Salvation Army, at its headquarters in Washington,D.C. Because of the scale of the hurricane disaster and thelarge response needed, this was the first time the AmericanRed Cross coordinated this type of national operationscenter following a disaster. This working group helped themajor charities coordinate services on the ground byallowing for face-to-face interaction and ongoing com-munication, according to charity representatives andFEMA officials.

To help fulfill its information-sharing role under Emer-gency Support Function 6, National VOAD organizeddaily conference calls with FEMA and other federal gov-ernment representatives and its member organizationsoperating in the Gulf Coast region. National VOAD alsoinvited nonmember charitable organizations that wereproviding relief to hurricane victims to participate in thesecalls, which sometimes included more than 40 organiza-tions at once. During these calls, both the federal govern-ment and charities were able to provide information andanswer questions about services provided, needs identi-fied, and the organizations’ abilities to meet these needs.Representatives from charitable organizations told us thatthese calls were an effective way to coordinate the deliveryof supplies among charities and help identify those regionsmost in need of charitable services.

Charities were also able to share information throughCAN databases. Following the hurricane disasters, CANcreated a web-based shelter registry that provided infor-mation about emergency shelters operating in the GulfCoast region, including their capacity and operating sta-tus. CAN also activated the database of victim informa-tion, which at the time was being tested in six pilotcommunities. More than 40 charities—all of whom mustsign CAN participation agreements, including the Ameri-

14 After Katrina

can Red Cross, the Salvation Army, and the United Way ofAmerica—were able to access this database and inputinformation about the services they provided to individualclients, according to CAN representatives. Charities couldshare information about these clients, who were requiredto sign privacy releases, through the web-based database,thus reducing service duplication and the need for victimsto give the same information to multiple organizations.

Although the charity representatives we interviewedreinforced the importance of the conference calls and theCAN databases, they also raised concerns about the useful-ness of these systems. For example, some representativeswere concerned the conference calls had too many partici-pants. Because 40 or more charities might be participatingin any one call, the calls often ran long or dealt with issuesthat may not have been of interest to the whole group,according to some charity officials. Additionally, charityrepresentatives told us that call participants sometimesprovided information that turned out to be inaccurate.

Charity officials we spoke with were supportive of CANand its mission, but they raised several concerns about theusefulness of its databases following the hurricane disas-ters. One concern that we heard from a few charities wasthat the CAN case management system is still in its de-velopmental stages and was therefore not ready to be acti-vated on such a large scale. Many volunteers had notreceived sufficient training on the system, and some of thetechnological glitches had not been completely resolved,according to charity representatives. In addition, repre-sentatives told us that the shelter database, developed soonafter the hurricanes, had not been previously tested andmay not have been ready for widespread use. In addition,some officials said that after Katrina there was neither elec-tricity nor Internet access in certain locations, and as aresult, the CAN databases could not always be used. Someofficials stated that they needed to collect information inwriting at the time of the disaster and then input the datainto the system once they had Internet access—a time-consuming task that diverted resources from other neededareas. CAN officials responded that the CAN databaseswere created primarily for long-term recovery efforts thatwould take place after electricity and Internet access wererestored, rather than for short-term relief.

Charity representatives also told us that daily confer-ence calls and electronic databases helped with coordina-tion efforts, but these systems were not as important tocoordination efforts as preexisting relationships. Several ofthe charities we spoke with stated that, for charities tofunction efficiently following a disaster, they must have

some sort of established working relationship with theother charities involved in disaster relief efforts. One char-ity representative told us that it is difficult to make intro-ductions in the chaos of a disaster. He stressed thatcharities that operate in disasters should have memoran-dums of understanding signed before a disaster strikes—apractice many charities use—so that they can immediatelycoordinate efforts in a disaster situation.

Charities Struggled to Balance Access toServices with Concerns Regarding Safety ofService Providers and Victims

GAO teams that visited the Gulf Coast in October 2005observed that the American Red Cross did not providerelief in certain areas because of safety policies; and thus,other charities, such as the Salvation Army and smallercharities, often helped to meet the needs of those areas.The American Red Cross told us that with the AmericanSociety for Civil Engineers and FEMA, it had previouslydeveloped policies to protect the safety of service providersand victims following a disaster. These policies include notestablishing shelters in areas that may become floodedduring a disaster or in structures that strong winds maycompromise. However, victims remained in areas wherethe American Red Cross would not establish shelters. Fur-ther, where the American Red Cross was able to establishshelters, victims’ needs sometimes exceeded the capacityof the American Red Cross, as this was the largest responseeffort in American Red Cross history. GAO teams in Mis-sissippi observed that the Salvation Army and smallercharities, such as local church organizations, filled manyof the needs for volunteer services that the American RedCross did not meet. Additionally, GAO teams estimatedthat in the Birmingham, Alabama, area, a significant por-tion of the approximately 7,000 evacuees were being caredfor and sometimes being housed by local churches andtheir members.

Although smaller organizations provided needed char-itable services in the Gulf Coast region, some concernshave been raised about the organizations’ abilities to pro-vide adequate services to victims. Some officials told usthat the smaller organizations helped meet importantneeds, but many organizations had never operated in a dis-aster situation and may not have completely understoodthe situation. For example, officials told us that some ofthe small charities that placed children who were separatedfrom their parents in homes did not retain sufficient infor-

Observations on Charities’ Response 15

mation about which children were placed where. Thismade it difficult to locate missing children. Other officialstold us that some of the smaller organizations that tried toestablish “tent cities” to house evacuees were not preparedto provide the water, sanitation, and electricity these typesof shelters require.

Concluding ObservationsIn closing, the devastation of Hurricanes Katrina and Ritaonce again challenged federal, state, and local govern-ments and charitable organizations’ abilities to providelarge-scale aid to hundreds of thousands of survivors. Italso provided a critical opportunity to assess how thenation’s charities have incorporated lessons learned fromresponding to the September 11 tragedy. GAO’s ongoingwork on the coordination of charitable efforts in responseto Hurricanes Katrina and Rita will examine the moneycharities have raised and how these funds have been used,how well charities are meeting their responsibilities underthe national response plan, how well charities are coordi-nating their relief efforts, how people affected by the hur-ricanes have accessed charitable services and relief suppliesand the challenges they encountered in dealing with char-ities, and what charities are doing to guard against fraudand abuse.

In the coming months, much of the congressionalscrutiny related to Hurricanes Katrina and Rita will focuson federal agencies’ preparedness and response. Given theconcerns raised about the effectiveness of federal, state,and local disaster preparedness and response, the non-profit sector will likely continue to play a critical role inresponding to disasters. As a result, this sector, too, willface continued scrutiny. An important issue those whostudy the nonprofit sector should examine will be theextent to which oversight and accountability systems arein place to ensure that charities’ performance is enhanced.

Notes1. This estimate based on data from the IRS, with modifications by the

National Center for Charitable Statistics (NCCS) at the Urban Insti-tute. NCCS excluded foreign and governmental organizations fromthe data.

2. For a list of National VOAD members, see the appendix.

ReferencesGAO. See U.S. Government Accountability Office.U.S. Government Accountability Office. 2002. “September 11: More

Effective Collaboration Could Enhance Charitable Organizations’Contributions in Disasters.” GAO Report No. 03-259. Washington,DC: U.S. Government Accountability Office.

16 After Katrina

Observations on Charities’ Response 17

Appendix 3.1

Members of National Voluntary Organizations Active in Disaster Relief

Adventist Community ServicesAmerica’s Second HarvestAmerican Baptist MenAmerican Radio Relay LeagueAmerican Red CrossAnanda Marga Universal Relief TeamCatholic Charities USACenter for International Disaster InformationChristian Disaster Response InternationalChristian Reformed World Relief CommitteeChurch of the BrethrenChurch World ServiceConvoy of HopeDisaster Psychiatry OutreachEpiscopal Relief and DevelopmentFriends Disaster Service, Inc.The Humane Society of the United StatesInternational Aid

International Critical Incident Stress FoundationInternational Relief Friendship FoundationLutheran Disaster ResponseMennonite Disaster ServiceMercy Medical AirliftNational Emergency Response Teams National Organization for Victim AssistanceNazarene Disaster ResponseNorthwest Medical Teams InternationalThe Points of Light FoundationPresbyterian Church (U.S.A.)REACT International, Inc.The Salvation ArmySociety of St. Vincent de PaulSouthern Baptist ConventionUnited Church of ChristUnited Jewish CommunitiesUnited Methodist Committee on ReliefUnited Way of AmericaVolunteers of AmericaWorld Vision

The attacks of September 11 and the more recent natural disasters in South Asia andon the Gulf Coast of the United States thrust many charity regulators into nontradi-tional roles and caused them to approach their traditional roles differently. Charityregulators quickly became aware that they would have to adapt their offices in light of charity relief efforts and public contributions of a magnitude never experiencedbefore.

After September 11, New York Attorney General Eliot Spitzer immediately con-vened meetings of relief organizations and encouraged them to provide additionalfinancial information to contributors and coordinate their efforts by creating a shareddatabase to ensure all eligible individuals would receive relief services, while protect-ing the privacy of the organizations and their clients.1

The disasters spawned numerous new relief and fundraising organizations, creat-ing a challenge for regulatory offices concerned with ensuring compliance with regu-latory requirements and remedying fraud. State regulators and the Internal RevenueService (IRS) implemented procedures, including outreach to charitable organizationsand sharing of information among agencies, to encourage compliance and expediteprocessing registrations and applications for tax exemption.

In response to the increased number of charitable organizations, the unprecedentedcharitable contributions from the public, and the public’s demand for more informa-tion on charities, state and federal regulatory offices assumed a greater role in publiceducation programs for contributors and those who manage charitable assets.

New York Attorney General’s Response to September 11In the wake of the attacks of September 11, 2001, the American people respondedimmediately and dramatically by opening their hearts and wallets in an unprecedentedway. Estimates are that nearly 60 percent of Americans donated money to some formof September 11 relief; an outpouring of contributions was also received from theinternational community (Independent Sector 2001). The public also expected to haveaccess to information confirming that their contributions had been used for theirintended purposes. Victims of the attacks and the families of those who died also

19

4 K A R I N K U N S T L E R G O L D M A N

Nonprofits and DisasterThe Experience of New York State on September 11, 2001

needed information concerning relief organizations fromwhich they could seek assistance.

To respond to these needs, the attorney general’s Char-ities Bureau worked with private industry to create asearchable database that was added to the attorney gen-eral’s web site to (1) inform victims of available services,(2) provide contributors with information about organi-zations to which they might make donations, and (3) pro-vide “real-time” financial information from relief chari-ties concerning funds they received and expended for disaster relief. The site posted information concerningover 200 relief organizations, many of which voluntarilyposted information concerning contributions receivedand relief services provided.

Challenges Facing the September 11Charitable Relief EffortConsistent with their unique missions, the charities work-ing in the September 11 arena determined individuallywhich victims, families, and affected communities to assistand which means (direct cash aid, services, grants) toemploy to deliver that assistance. Nationwide, over 250new funds were created (Lipman 2002). Some were cre-ated spontaneously by organizations with no prior experi-ence in administering charitable assets. All of theSeptember 11 charities—whether newly formed or longestablished—confronted a daunting administrative bur-den that severely taxed their staffs and resources.

The demand for relief was huge. The incapacitation ofthe communications and transportation infrastructure ofLower Manhattan further complicated the logistics of dis-pensing aid at the early stages of the disaster.

Many individuals and families were initially too over-come with grief to seek aid. Experienced and novice charitiesalike struggled to define their aid eligibility requirements,balance concerns for accountability with the importance ofprotecting families’ privacy, identify and reach the specificpopulations they wished to serve, and mobilize the thou-sands of people who volunteered their services.

Meanwhile, the public understandably demanded thatrelief be made available quickly, with minimal red tape.The public also expressed concerns that the charities takesteps to avoid fraud and waste, ensure some measure ofequity in the distributions, and guard against any victim“falling between the cracks.” Finally, the public sought ahigh level of accountability by the charities and expectedinformation on the relief effort to be made availablepromptly, accurately, and in detail.

Adding to the pressures on relief organizations was therelaxation of the “need and distress” distribution stan-dards applicable to charities providing relief to victims ofthe September 11 attack. Notice 2001-78, issued by the IRS(2001), permitted charities to make grants to victims aslong such grants were “related to the charity’s exempt pur-pose, provided that the payments [were] made in goodfaith using objective standards.” While some charities dis-tributed larger grants than they might have otherwise dis-tributed, many retained funds for long-term needs such asscholarships and mental health treatment.

Role of the Attorney GeneralIn addition to the oversight of charitable assets and orga-nizations, one of the central responsibilities of the attorneygeneral is making information filed with the attorney gen-eral available to the public so that donors may makeinformed decisions. However, the legally mandated an-nual filings by the charities do not make that informationavailable as readily as many members of the public haveurged.

Most charities are required to register with the Chari-ties Bureau of the attorney general’s office and file annu-ally reports detailing their fundraising and expenditures. Acharity must file its annual report with the attorney gen-eral within four-and-a-half months after the end of its fis-cal year. The IRS routinely grants a six-month extension tofile IRS Form 990, and the Charities Bureau, which alsorequires the filing of Form 990, follows the IRS’s exten-sions. All such filings must be provided to anyone whorequests them. However, with extensions of time to file,financial information concerning funds raised and ex-pended in the early stages of the September 11 relief effortwould not be available until late 2002 or early 2003. Somecharities, including several very active in providing Sep-tember 11 relief (such as the American Red Cross and reli-gious charities), are exempt from these registration andreporting mandates in New York, though they remainsubject to the attorney general’s investigatory oversight.The attorney general urged charities to provide voluntar-ily more timely financial information to the public.

In keeping with that oversight role, the attorney generalrecognized early on the critical importance of coordina-tion among the charities as their relief work got under way.Building upon lessons learned from the Oklahoma Citybombing of 1995, the attorney general and his staff workedto jump start the necessary collaboration through severalkey initiatives. One such initiative was the attorney gen-

20 After Katrina

eral’s public web site, http://www.wtcrelief.info, launchedon October 10, 2001. It provided detailed information onover 200 charities and other private entities, as well as asearch function and updated news bulletins concerningthe relief effort. In addition, by November 1, 2001, theattorney general had assembled a pro bono team of privatesector firms—McKinsey and Company, IBM, Silver-Stream Software, Qwest Communications, and KPMG—to help create a victims database that would allow charitiesto coordinate assistance better, avoid duplication, andensure fairness. Initially, the attorney general obtained thesupport of the largest charities involved in the relief effort,including the American Red Cross, the Salvation Army,Safe Horizon, and the September 11th Fund (whichtogether accounted for approximately 80 percent of thefunds raised). On December 14, 2001, at the attorney gen-eral’s urging, these groups were joined by 10 others inannouncing the creation of the 9/11 United ServicesGroup (USG), which maintained the victims database butalso assigned an individual case worker/service coordina-tor to anyone receiving assistance.

Immediately after September 11, those seeking reliefhad to complete multiple and different applications to thevarious relief organizations from which they sought assis-tance. Victims and the relatives of those who died in theattacks reported that the process of accessing relief serviceswas often tedious and especially difficult to navigate in atime of extreme grief. The implementation of the USGdatabase allowed applicants to submit a single applicationaccepted by multiple agencies and to take advantage of theadvocacy of caseworkers who identified and assisted inobtaining appropriate assistance. As a result, access torelief services was simplified and expedited. Although USGis no longer active, the technology is being maintainedshould it be needed in a future disaster.2

The attorney general urged charities to avoid haste indistributing their funds and to take the time necessary toevaluate recipients’ needs, both current and future, whenmaking funding decisions. In addition, the attorney gen-eral’s office investigated and prosecuted fraud and abusecases as they arose, while also assisting many charities withtheir internal efforts to curb waste. The attorney generalalso encouraged charities to publicize on a regular basis theamount of money they received, detailing how muchmoney was spent and for what purposes. Many of the Sep-tember 11 charities did exactly that, providing substantialdetail through their web sites, interim reports, and otherpublicly available materials (see Spitzer 2002). The attor-ney general’s Charities Bureau tracked the voluntary

disclosures and monitored the various surveys and sum-maries compiled during 2001 and 2002.

The Internal Revenue Service and the StatesAfter the attacks of September 11 and the natural disastersof 2004 and 2005, the IRS announced the implementationof an expedited review and approval process for disasterrelief organizations seeking tax exemption. In announcingthe expedited procedures after the natural disasters, IRSCommissioner Mark W. Everson said, “We want to makesure we do all we can to help new charitable organizationsget up and running so they can begin providing the assis-tance the victims of this terrible disaster so desperatelyneed. Just as we did after September 11, 2001, we will putthese applications at the head of the queue and turn themaround promptly” (IRS 2005).

At the request of the Charities Bureau, the IRS routinelyprovided New York with copies of the applications for taxexemption and determination letters sent to newly exemptSeptember 11 relief organizations. With the informationreceived from the IRS, the Charities Bureau reached out tonewly formed organizations to help them comply withNew York’s registration requirements.

When the South Asian tsunami and Hurricane Katrinaspawned new relief organizations, the IRS once againprovided the Charities Bureau with applications and de-termination letters, and the Bureau again assisted thoseorganizations with registration in New York.

Public Information/EducationThe Internet has made financial information about chari-table organizations easily accessible to the public. NewYork, as well as several other states, provides links from theattorney general’s Internet site to the Forms 990 of regis-tered charities.

Launched in May 2005, the attorney general’s sitelinking reports of tax-exempt organizations had over350,000 hits in its first six months. Also, exempt organiza-tions’ IRS Forms 990, posted on http://www.guidestar.org,are in great demand.

Most state and federal charity regulators publish guide-lines for the public to assist in identifying recipients ofcharitable contributions. After the terrorist attacks and thenatural disasters of recent years, many agencies have addedguidelines aimed at contributors to disaster relief organi-zations to their “generic” advice on charitable giving. The

Nonprofits and Disaster 21

Internet sites of almost all state charity regulators and theIRS, the Federal Bureau of Investigation, the Federal TradeCommission, the Federal Communications Commission,and the Untied States Postal Service provide advice oncharitable giving, and about half those agencies provideadvice on contributing to disaster relief organizations.

Charities and regulators have learned a great deal fromrecent disasters. The initial lesson was that the publicdemands—and deserves—information about how contri-butions are used. Many charities have responded to thatdemand by posting additional financial information ontheir web sites, and regulators have posted links to finan-cial reports of their registrants. Charities should makeefforts to provide real-time information to the public.

We have learned from our experience that some reliefefforts must continue for many years—victims are stillseeking assistance from charities more than 10 years afterthe Oklahoma City bombing, and four years after Septem-ber 11, many families continue to receive aid. Childrenborn after their fathers died on September 11 are nowturning 4, and they will need scholarships for at leastanother 17 years. Charities must plan for the long-termneeds of those they serve, and contributors must be madeaware that contributions used for certain purposes maynot be expended for a number of years.

Oklahoma City and September 11 taught us muchabout the importance of coordinating relief efforts. TheGulf Coast hurricanes taught us that victims of a “local”disaster may need relief services thousands of miles from

the disaster. Charities and regulators must now focus onhow to adapt their practices and oversight to meet theunique needs and circumstances of such disasters.

Notes1. Portions of this report are taken from Spitzer (2002).2. Although the United Services Group database is easily adaptable to

disasters whose victims are located in the same geographical area, itsusefulness in coordinating relief to victims dispersed throughout aregion or a country, such as those who fled the devastation of Hurri-cane Katrina, is likely not as great.

ReferencesIndependent Sector. 2001. “Charitable Giving: September 11th and

Beyond.” Washington, DC: Independent Sector. http://www.independentsector.org/media/sept11survey2.htm.

Internal Revenue Service. 2001. “Disaster Relief Distributions by Char-ities to Victims of September 11, 2001 Terrorist Attacks.” Notice2001–78. Washington, DC: Internal Revenue Service. http://www.irs.gov/pub/irs-drop/n-01-78.pdf.

———. 2005. “IRS Expedites Charity Applications, Urges Use of Exist-ing Charities.” Announcement IR-2005-93. Washington, DC: Inter-nal Revenue Service. http://www.irs.gov/newsroom/article/0,,id=147281,00.html.

Lipman, Harvey. 2002. “IRS Handling of September 11 Charities ShowsWeaknesses of Approval System, Critics Say.” Chronicle of Philan-thropy 14, March 7.

Spitzer, Eliot. 2002. “September 11th Charitable Relief: An Overview atOne Year, Report of New York State Attorney General Eliot Spitzer.”New York: Office of the Attorney General. http://www.oag.state.ny.us/charities/september11_charitiable_report/sept11_report.htm.

22 After Katrina

Disasters—whether man-made or natural—galvanize societies. The death, injury, loss,and despair left in their wake mobilize bursts of sympathy and unleash a flood of vol-untarily contributed money, materials, and time. Such new resources and new capa-bilities are often required to buttress the response of existing institutions, for they arelikely to be overwhelmed by the effects of the disaster. And, material hardship is theaspect of disaster most easily fixed by an infusion of emergency aid. If the victims’ spir-its are not broken, if the social structure does not completely collapse, if public insti-tutions and leaders are capable, an influx of aid can make a big difference in a shorttime. So we expect the voluntary sector will play a large part in the social response todisaster.

That, at least, is one story. And it has long been a powerful one—a strong reason tobelieve in the voluntary sector’s role in helping societies move from disaster to recov-ery. Observations after Hurricane Katrina give us no particular reason to doubt thisstory. We have been given, however, an opportunity to reflect on how we rely on thevoluntary sector—both in its actions and as a force that shapes the actions of businessand government. We can begin to discern and calibrate the sector’s various roles as aresource mobilizer and coordinator, as an emergency service provider, as an opera-tional link to victims, as a space where new emergency capacities might be built, andas a voice for those whose interests might be ignored in recovery.

The Voluntary Sector Facilitates Human SolidarityVoluntary sector organizations provide a channel for those both near and far from adisaster to express solidarity with its victims. Simply by providing an address wheremoney can be sent, or a location where clothes can be donated, or a facility whereblood can be distributed, charities create an opportunity to display sympathy and sol-idarity. Charitable voluntary sector organizations create the scaffolding of a worldwidecommunity that exists to help fellow human beings who have suffered through no faultof their own.

It is tempting to measure contributions primarily by volume and by the relief theyprovide. We can count the money, the canned goods and clothes, and the volunteertime. But often overlooked is the effect that donations have on those who give. This is

23

5 M A R K H . M O O R E

Disasters and the Voluntary SectorReflections on the Social Response to Hurricane Katrina

unfortunate, for any proper accounting of a contribution’svalue would recognize its value for the giver—and for thecommunity that giving helps create—as well as for the vic-tims. After all, if we think it is socially valuable to producelemon-scented furniture polish because people seem towant it and are willing to pay for it, we must also view cre-ating an opportunity to alleviate the suffering of others associally valuable.

Further, to the degree that creating an opportunity togive connects with, sustains, or amplifies values such asempathy and charity, the voluntary sector creates a kind ofsacrament. In participating, we renew our commitment toour values and to one another. The voluntary sector trans-forms disasters into occasions for the creation of whatRobert Putnam has called “social capital.” Social capitalrefers to the felt willingness and obligation of individualsto help one another without necessarily expecting animmediate personal return from their effort. And as Put-nam has shown, social capital improves the quality of indi-vidual and community life in such disparate areas asgovernmental performance, economic performance, andeven the health of communities (Putnam 2000).

Material Resources—More for DisasterRelief, Less for Disaster Recovery

Having emphasized the voluntary sector’s importance tothose who wish to help victims and in encouraging theexpression of values and commitment to the human com-munity, I restate the more obvious point: the expression ofcharitable aspirations also unleashes a flow of materialresources that improves victims’ welfare. When we focusattention on material resources and on improving con-ditions in a disaster area, two crucial questions emerge: (1) how much of the aid actually reaches its target, and (2) how efficiently (and perhaps equitably) is the aid distributed?

Interestingly, some evidence has shown that charitablecontributions are larger in the United States than in othercountries. Yet, however large the donations are, they havebeen dwarfed by government contributions and by soci-ety’s overall need (Steuerle and Hodgkinson 1999). Thisfinding implies that we cannot expect charitable contribu-tions to meet the needs of disaster relief.

Yet, what is true for charity in general might not be fordisaster relief. The gap between charitable dollars and needmight be smaller in the case of natural disasters, wherecharitable contributions come much closer to meetingneeds and seem larger relative to government and private

sector contributions, than in other cases such as health,education, or care of the aged. Indeed, in cases such as Sep-tember 11 or famines, the amount of aid contributed hassometimes been greater than what was needed—at leastfor the purposes of short-run relief. In such cases, materialresources for disaster relief have accumulated unspent andundeployed, raising weighty questions about what shouldbe done with the excess.

At this point, I will distinguish between disaster relief,on one hand, and disaster recovery and rehabilitation, onthe other. The line between the two is admittedly blurry,but nonetheless important. Donors often give to relief, notto rehabilitation—perhaps because disaster relief is rela-tively simple, straightforward, and morally uncontrover-sial. When victims lack shelter, food, clothing, and medicalcare, it is pretty obvious what needs to be done. Further,the response is neither particularly difficult nor particu-larly expensive. And the effects are immediate, large, andgratifying.

When, however, the issues become how much moneyshould be provided for rebuilding individual homes andbusinesses, how much mental health care should be pro-vided to those who suffered even before the disaster,whether funds should be given to those who plan to reset-tle elsewhere—our obligations are less apparent and ourtasks more difficult. Meanwhile, administrative costs rise,the immediate gratification of doing right falls, and con-troversy emerges. When there are excess funds for disasterrelief and inadequate funds for disaster recovery, divertingfunds is tempting. But donors may contest this new, moreproblematic use of their money.

This issue has become salient after Hurricane Katrinabecause the natural disaster exposed a man-made one. It ishard to draw the line between disaster relief effortsdesigned to restore New Orleans and much larger andmore sustained efforts to improve it. And it is by no meansclear which of these goals is being supported by the socialresponse to Katrina.

Fungibility of Resources and Its CostsThe voluntary sector’s ability to mobilize resources canalso be profoundly affected by the forms in which thoseresources come. Money, of course, is the most liquid andfungible resource, and therefore probably the easiest touse—it can be converted quickly and precisely into thingsvictims need and want—and account for. But in the after-math of Katrina, resources appeared in other, less fungibleforms: food, clothing, and volunteer efforts. When mate-rial resources are more concrete and specialized than

24 After Katrina

money, they are less easy to fit to particular needs andwants.

This problem was vividly illustrated by a report that theIRS had been asked for a charitable exemption for an orga-nization that would distribute clean underwear to Katrinavictims. On one hand, it seemed hard to deny the charita-ble intent and value of the effort. On the other, what apeculiarly specific way to contribute!

It is perhaps enough to observe that the administrativecosts associated with moving material resources fromdonor to beneficiary are likely different for money than forfood and clothing or volunteers. The value of volunteersdepends on how readily they adapt to conditions in thedisaster area and adjust their initial ideas about how theycan help.

Particularism and Sectarianism in the Voluntary Sector ResponseRelated to the issue of resource adaptability is particular-ism and sectarianism in the use of voluntarily contributedresources. As noted above, a general problem with vol-untary contributions is that they do not always come inprecisely the form that is needed. This can be attributed tothe physical characteristics of the resources themselves(money versus material contributions and volunteertime). But the problem also arises when donors not onlygive certain kinds of resources, but give them to some indi-viduals and not others without necessarily considering rel-ative need. For example, some church groups whirred intoaction to collect food and clothing for the victims of Katrina. Then the resources were delivered to a “sisterchurch,” whose congregation or beneficiaries may nothave been those in most urgent need of aid.

The problem of delivering aid to those we feel closest torather than to those who have the greatest need can arisecompletely unselfconsciously. It feels natural and good toreach out to others through social networks that alreadyexist. The difficulty is that such networks tend to followlines marked by class, race, and religion, which may not bereliably correlated with the urgency of need. But this prob-lem can also be produced self-consciously; donors some-times condition that their donations be used for particulargroups judged worthy of help.

What is at issue in both an unconscious and a consciouspreference for helping those we feel particularly close to isthe potential conflict between donors’ desire for specificaccomplishments and the objective needs of all victims.The difficulty, of course, is that establishing any objective,

shared view of the best possible social response, particu-larly in the midst of a crisis, is difficult. Afterward, howwell voluntarily contributed resources managed to hit thetarget of greatest social need can be examined. And therewill be many different views expressed about how fair andjust and socially responsible and efficient the voluntaryresponse was. But during a crisis, in the urgency to mobi-lize, there is the risk that the aid will be spotty (rather thansystematic) and marked by different kinds of favoritism(rather than focused ruthlessly on the most urgent need).

Even if we could organize a policy process that wouldproduce a collective agreement about priorities, it wouldbe hard to ensure that the voluntary, spontaneous responseactually corresponded to the most just and effective distri-bution of effort. After all, donors decide voluntarily whatto do. They can be guided by some collective process, butnot necessarily controlled by it. If a process emerged thatdefined particular contributions to particular individualsas especially worthwhile, then possibly, many donors whowanted to give in other ways would be discouraged fromdoing so. Thus, charities must accept voluntary contribu-tions that may be large in aggregate but are expensive toadminister and produce a spotty result, or must ensurethat contributions are exactly the ones needed for a sociallyjust and efficient response.

Can the Voluntary Sector Effectively Coordinate the Social Response to Disasters?

These observations lead inevitably to somewhat soberingconclusion: if we ask whether the voluntary sector alone iscapable of both coordinating and guaranteeing a just andeffective social response to disasters, the answer seems tobe, unambiguously, no. This is partly a matter of scale. Thevoluntary sector might be able to provide a significantshare of the resources required for disaster relief, but itprobably cannot provide adequate resources for disasterrehabilitation and recovery—the crucial, long-run socialtask. It is also partly a matter of being able to efficiently andeffectively mobilize and distribute resources (the volun-tary sector has difficulty raising fungible assets and target-ing them to the specific needs it identifies, has to acceptwhat is given, and has no guarantee that what is given iswhat is needed) and partly a matter of equity. Because (1) the voluntary sector accepts voluntary contributions,(2) those contributions may be implicitly or explicitly con-ditioned by the contributor, and (3) there is no way eitherbefore or after the fact to constrain these contributions tosome collectively defined idea of a just and fair response,

Disasters and the Voluntary Sector 25

the voluntary sector lacks the capacity to ensure that itsresponse is just and fair. Inequities are the inevitable resultof the sector’s ad hoc character.

This means that the government must inevitably bepart of organizing the social response to disasters. Gov-ernment is the one institution with the scale to mobilizethe necessary resources. It is the one institution with theauthority to distribute the burdens and benefits of therelief and recovery effort fairly. It is also the institution thatcan be called to account by citizens for the justice andequity of its response. And only through a democraticprocess organized by government can society create theoccasion for a meaningful collective discussion of what isowed to the victims of a disaster.

The Crucial Role of Government, and Partnerships with Government

That the voluntary sector will inevitably work alongsidethe government raises another observation: in respondingto disaster, voluntary sector organizations must establishand maintain a workable relationship with governmentthat protects both their unique ability to help and theirindependence, even though they are likely to operate as akind of junior partner.

First, voluntary organizations must consider how theyaccept guidance from the government. In one model, avoluntary sector organization would contract with thegovernment; in accepting the contract, the nonprofit orga-nization would implicitly accept the government’s guid-ance (at least with respect to the activities bought by thecontract). In a second model, voluntary sector organiza-tions would be partly dependent on the government forinformation about victims’ needs; therefore, their re-sponse would be conditional on the government’s view ofwhat is needed and what others have already provided. Inboth instances, the nonprofit organization would retainthe right to decide the type of help to supply.

Second, when a voluntary sector organization partnerswith government, its reputation will be associated with thequality of the overall response. So a nonprofit organizationmay not be able to distinguish itself from an inept govern-ment response.

Third, a nonprofit might want to retain an independentposition where it is capable of publicly assessing the gov-ernment response. An independent stance might be nec-essary for a nonprofit’s operational success, not simply forits reputation.

Fourth, a voluntary sector organization must recognizethat, like government, it provides a kind of social insur-

ance that insulates people from some consequences of anatural disaster. Even before disaster strikes, both volun-tary sector organizations and government stand ready to help; that “insurance” shapes people’s views of whetherthey are at risk, and influences whether they buy pri-vate insurance and where they locate their homes andbusinesses.

Is Katrina a Special Case?

So far, these observations are fairly general and do notapply specifically to Hurricane Katrina. But some particu-lar features of the Katrina disaster made the social responseto it particularly difficult or ironic.

Most important, Katrina was an acute, natural disasterthat landed on top of a chronic social, economic, and polit-ical disaster years in the making. This has made relief andrecovery difficult. Local institutions that had been ineffec-tive before Katrina could not necessarily become moreeffective in the midst of the crisis. And those who had wit-nessed the charitable response to Katrina noted that orga-nizations such as the American Red Cross that had beenvery effective in national fundraising efforts lacked well-oiled local connections, so the mismatch between resourcemobilization and distribution was more awkward thanusual. Funds were raised for relief, but the greater need wasfor rehabilitation and recovery.

Exactly what or how much disaster recovery shouldsociety provide? Is the goal to return all New Orleanians totheir position ex ante? That seems a mistake. For some, thedisaster represents an opportunity to improve NewOrleans. But that means deploying aid not to the simpletask of restoration, but to the more complex tasks of re-envisioning and re-creating. Who will be wanted in theimproved New Orleans? The same people who want toreturn? What are victims of Hurricane Katrina entitled to,versus new residents, or those employed in reconstruc-tion? These questions have yet to be resolved.

Conclusion: Setting Reasonable Expectations and Establishing Achievable Benchmarks

With the response to Hurricane Katrina still beingdebated, it seems important for the voluntary sector toinitiate a public conversation on reasonable standards forvoluntary sector response to disasters. Several unreason-able expectations have emerged after Hurricane Katrina:

26 After Katrina

● That the voluntary sector can do it all;● That the voluntary sector’s response will be simultane-

ously fast, intelligent, just, and flawless—with zeroadministrative costs to boot; and

● That the response be made without distorting the mis-sions or twisting the capacities of the existing voluntarysector organizations.

Once articulated, these standards seemed patently un-realistic. Developing a more realistic and appropriate setof expectations will require emphasizing the followingpoints.

First, society must understand that mobilizing and dis-tributing resources does not come free. It costs money andtime to gather resources and get them to the right placesand the right people at the right time. No frictionlessmachine links the impulse to give to the most effective useof what was given; administrative costs are necessary. Tocomplain about them while expecting agencies to grace-fully accept any contribution and find a just and effectiveuse for it is particularly inconsistent.

Second, while “more efficient coordination” of volun-tary organizations is worthwhile, how to implement it isanother matter. Suppose there are economies of scale incombining and coordinating voluntary sector operations;further, that combining voluntary sector organizationsmight allow better public oversight and accountability;and finally, that more explicit coordination might increasethe capacity to identify the best uses for funds and to poolthem for maximum desired effect. Then consider that onestrength of the voluntary sector response is that it is some-what ad hoc and responsive to how individuals want tohelp their fellows. If individuals want to contribute whatthey want to contribute—if for some reason, they want togive the victims underwear—then too much coordinationand focus could blunt some of this enthusiasm. The costmight be fewer resources to the victims, less satisfaction forthe donors, and less support of the values and relation-ships that could be established through the disaster.

Third, almost everyone agrees that voluntary sectororganizations should meet appropriate demands foraccountability from the wider society. But we have not yetclarified to whom or to what voluntary sector organiza-tions should be accountable. We could easily imagine thatvoluntary sector organizations should be accountable todonors, to clients and beneficiaries, and to the public atlarge. The difficulty is that these different accountabilitiesmay not be well aligned. And, when accountabilities arepoorly aligned, which should be the priority?

Finally, the discussion of charities’ response to disastertoo often neglects the role of the private sector. Thisincludes the provisions that individuals threatened by nat-ural disaster make for themselves and the capacity of theprivate market system (including the insurance market) torespond to individuals’ needs for protection. In a prelim-inary analysis of the financial impact of Katrina presentedat an informal discussion of the social response to Katrinaat the Hauser Center, Elizabeth Keating estimated thatonly a small share of the property damage caused by Kat-rina was covered by private insurance. As we aid in recov-ery, we must address who should properly bear the risks.

It seems then that Katrina caught us off guard—withrespect not only to our capacity to respond to tragedy, butalso to our understanding of the institutions we trust.With luck, continued hard work, and a willingness toengage in constructive criticism and assessment, we mightremedy both problems. At least we can better tackle thetough problem of how society will rely on the market, thegovernment, and the voluntary sector to make a just andeffective response to natural disasters.

ReferencesPutnam, Robert D. 2000. Bowling Alone: The Collapse and Revival of

American Community. New York: Simon and Schuster.Steuerle, C. Eugene, and Virginia A. Hodgkinson. 1999. “Meeting Social

Needs: Comparing the Resources of the Independent Sector andGovernment.” In Nonprofits and Government: Collaboration andConflict, edited by Elizabeth T. Boris and C. Eugene Steuerle (71–98).Washington, DC: Urban Institute Press.

Disasters and the Voluntary Sector 27

Elizabeth T. Boris is the founding director of the Center on Nonprofits and Philan-thropy at the Urban Institute. She is the author of numerous articles and reports onnonprofit organizations and philanthropic foundations and with C. EugeneSteuerle is the coeditor of Nonprofits and Government: Collaboration and Conflict(second edition, Urban Institute Press, forthcoming). She has a Ph.D. in politicalscience from Rutgers University.

C. Eugene Steuerle is a senior fellow at the Urban Institute, codirector of the Urban-Brookings Tax Policy Center, and columnist for Tax Notes magazine. His researchon charity and philanthropy includes studies on maximizing charitable giving fromcharitable deductions, the patterns of giving by the wealthy, the effect of taxes oncharitable giving, payout rates for foundations, unrelated business income taxes,and other ways of simplifying and reforming tax rules for charitable contributions.With Elizabeth T. Boris, he is the coeditor of Nonprofits and Government: Collabo-ration and Conflict (second edition, Urban Institute Press, forthcoming).

Cynthia M. Fagnoni is the U.S. Government Accountability Office’s (GAO) manag-ing director for Education, Workforce, and Income Security Issues. She has workedon issues in welfare reform, education, the workforce, Social Security, and privatepensions. Her several GAO-wide awards include Distinguished Service, Outstand-ing Achievement and Teamwork, and Meritorious Service.

Marion Fremont-Smith is senior research fellow at the Hauser Center for NonprofitOrganizations at Harvard University and the author of Governing Nonprofit Orga-nizations: Federal and State Law and Regulation (Harvard University Press). Mrs.Fremont-Smith is former assistant attorney general and director of the Division ofPublic Charities in Massachusetts.

Karin Kunstler Goldman is section chief in the New York State Attorney General’sCharities Bureau. Her duties include enforcement of statutory obligations of charities, public education, and legislative drafting. Prior to her career in law, Ms.Goldman was a Peace Corps volunteer in Senegal.

Mark H. Moore is the Hauser Professor of Nonprofit Organizations and faculty direc-tor of the Hauser Center. His work focuses on the ways leaders of public organiza-tions can engage communities in supporting and legitimizing their work and in therole that value commitments play in enabling leadership in public sector enterprises.

Steven Rathgeb Smith is a professor of Public Affairs and associate dean for the Daniel J.Evans School of Public Affairs at the University of Washington, where he also directs theNancy Bell Evans Center on Nonprofits and Philanthropy. He is the coauthor of Non-profits for Hire: The Welfare State in the Age of Contracting (Harvard University Press).

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About the Editors and Contributors