Disaster Giving 5302006 Heidi Frederick Research Development Specialist

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Disaster Giving5/30/2006Heidi
FrederickResearch Development Specialist
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The Center on Philanthropy at Indiana University

• Largest, most comprehensive academic center
  devoted to increasing the understanding of
  philanthropy and improving its practice.
  
• Staff 50
• Faculty 60
• The Fund Raising School faculty 50
• Budget 10 million a year
• Core program areas include academic program (M.A.
  Ph. D. programs), the Fund Raising School,
  Public Affairs, Philanthropic Services, and
  Research.

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Overview

• Magnitude of disaster relief giving
• Who gives for disaster relief
• Explore individual giving for disaster relief
• How donations are made by individuals for
  disaster relief
  
• Compare disaster relief giving to national
  giving
  
• What to look for in giving to nonprofit
  organizations
  
• Laws governing disaster relief giving

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Comparing Disaster Giving
05 Hurricanes data are preliminary, do not
publish Source Center on Philanthropy at Indiana
University, 9/11 figures from Chronicle of
Philanthropy
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Disaster Donations 6 Month Timeline
Source Center on Philanthropy at Indiana
University, Chronicle of Philanthropy figures for
9/11
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American Red CrossLargest Donations to
International Disasters (in Millions)
Source Associated Press and Center on
Philanthropy at Indiana University
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American Red CrossDonations to Domestic
Disasters (in Millions)
Source Center on Philanthropy at Indiana
University, American Red Cross, Chronicle of
Philanthropy
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Gulf Coast HurricanesU.S. Private Contributions
- Preliminary( in Millions)
TOTAL ESTIMATE 5.3 billion
Preliminary data do not publish Source, Center
on Philanthropy at Indiana University The
Foundation Center Snapshot of philanthropys
response to the Gulf Coast Hurricanes US Chamber
of Commerce, From Relief to Recovery
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September 11th GivingU.S. Private
Contributions( in Millions)
TOTAL ESTIMATE 2.8 billion
Data The Foundation Center September 11 The
Philanthropic Response
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Individual Giving for Katrina, Rita, and Wilma
relief efforts

• 63 gave money for hurricane relief in 2005
• 33 of households gave more than 100.
• 36 gave between 26 and 99.
• 31 gave under 25.

Source The Conference Board, survey of 5,000
households, April 2006.
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Comparing Giving by Disasters-Individual
Donations
Tsunami data is preliminary, do not publish
Source Katrina- The Conference Board, survey of
5,000 households Tsunami -Center on Philanthropy
Panel Study 9/11 Center on Philanthropy,
America Gives 2001
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September 11th GivingAverage and Median Giving
by Income Level
Source Center on Philanthropy at Indiana
University
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How Donations Are Made Asian Tsunami-Preliminary
Results Do not publish
Source The Center on Philanthropy Panel Study,
2005.
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Effects of Disaster on Giving

• 75 of households reported 9/11 giving was in
  addition to other giving in 01 (INDEPENDENT
  SECTOR).
  
• 84 of foundations reported their 9/11 giving was
  in addition to other giving in 01 and 02
  (Foundation Center).
  
• 72 of corporations reported their giving was in
  addition to other giving in 01 and 02
  (Conference Board).
  
• Our research shows that giving to disasters may
  have short term effects on fundraising for some
  organizations, but has little effect even six
  months later.

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Effect of Disasters on Nonprofit Organizations

• Based on research examining total giving in the
  years before and after disasters from 1955 to
  1999, after controlling for changes in the
  economy, they found no increases or decreases in
  total U.S. giving associated with disasters
  (Brown Rooney, 2002).
• Among international relief and development
  organizations the effect of 1 being donated to
  organization A, leads to a decrease in
  donations of .05 to organization B doing
  similar international relief work (Wilhelm
  Ribar, 2002).

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National Averages

• - Of those households that made donations
• National Donations
• 69 of households donated at least 25 in
• 2000, 67 in 2002.
• Mean household donation was 2,140 in 2000,
• 1,872 in 2002.
• Disaster Relief Donations
• 64.5 of households donated to the Gulf Coast
  Hurricanes and/or 9/11
  
• Mean household donations were 126-135

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United States Total2004 Contributions 248.52
Billion by Sources of Giving
Foundations28.80 11.6
Corporations12.004.8
Bequests19.80 8.0
Individuals187.92 75.6
Source Giving USA Foundation AAFRC Trust for
Philanthropy/ Giving USA 2005
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2004 Contributions 248.52 Billion By Type of
Recipient
Internationalaffairs5.342.1
Public-societybenefit12.965.2
Environment/animals7.613.1
Foundations24.00 9.7
Arts, culture, and humanities13.995.6
Unallocatedgiving 21.368.6
Religion 88.30 35.5
Humanservices 19.17 7.7
Health 21.958.8
Education33.84 13.6
Source Giving USA Foundation AAFRC Trust for
Philanthropy/ Giving USA 2005
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Total Giving As a Percentage of Gross Domestic
Product, 1964-2004
2.2
2.1
2.1
2.0
1.8
1.8
1.7
1.7
1.7
Data are rounded.
Source Giving USA Foundation AAFRC Trust for
Philanthropy/ Giving USA 2005
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Giving As A Share of Personal and Disposable
Personal Income 1964-2004
Source Giving USA Foundation AAFRC Trust for
Philanthropy/ Giving USA 2005
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Organizations Receiving the Largest Amount of
Private Support(2004, in Million)

• United Way 3,884
• Salvation Army 1,546
• Feed the Children 888
• American Cancer Society 868
• AmeriCares Foundation 801
• YMCA 773
• Gifts In Kind Foundation 750
• Lutheran Services in America 723
• Fidelity Charitable Gift Fund 683
• Catholic Charities USA 581

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Organizations Receiving The Most Funds for the
Gulf Coast Hurricanes Relief Efforts

• American Red Cross 2.116 billion
• Salvation Army 325 million
• Catholic Charities USA 133 million
• Bush-Clinton Katrina Fund 100 million
• Habitat for Humanity 78 million

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The Number of 501(c)(3) Organizations
Source Giving USA Foundation AAFRC Trust for
Philanthropy/ Giving USA 2005
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The Number of 501(c)(3) Organizations

• The number of registered charities increased by
  4.8 percent between 2003 and 2004.
  
• This number includes some, but not all, religious
  congregations. Some scholars estimate that there
  are 300,000 to 350,000 congregations in addition
  to registered charities, making an official count
  of charitable subsector approximately 1.3 to 1.35
  million entities.
• A study by Kirsten Gronbjerg at Indiana
  University found one-third more nonprofit
  organizations operating in the state of Indiana
  than were registered at the federal level. If
  the same is true for other states, the number of
  registered charities, congregations, and not-yet
  registered charities could be as high as 1.7 to
  1.8 million.

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What to Look for In Nonprofits

• 4,000 websites collected money for Hurricane
  Katrina and 60 were oversees suggesting they may
  be fraudulent (FBI).
  
• Always go to the official website for an
  organization.
  
• Match your interests (even with disaster
  giving).
  
• Relief vs. Rebuilding, Kidney Disease vs. Animals
  
  
• You can go to the Network for Good Interaction
  to find out what organizations are doing for
  disaster relief.
  
• Check out an organizations website for situation
  reports (the timing and thoroughness will tell
  you quite a bit about an organization) or check
  out groups like the Better Business Bureau (BBB)
  Wise Giving Alliance, But.
• Dont worry so much about what of your gift
  goes for administrative costs, consider making
  the gift unrestricted.

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The Law

• Any individual can give money to any person or
  any organization.
  
• When the donor desires a tax deduction for that
  gift that is when the law comes into play.
  
• To receive a tax deduction (which means you have
  to itemize your deductions on your taxes), you
  must give to an IRS designated 501(c)(3)
  organization or its equivalent.
• Organizations must apply for articles of
  incorporation from the State and for
  tax-deductibility status (501(c)(3)) from the
  IRS.
• After a disaster this process is usually
  fast-tracked.
  
• Organizations are then required to use your gift
  as they said they would when you gave.
  
• This means gifts for Katrina relief cannot be
  spent on gifts for Rita relief.
  
• Because giving is located in the tax code that
  defines charity, giving must be for a charitable
  purpose. Loosely defined, but had consequences
  for 9/11.
• American Red Cross troubles in 9/11
• Reason why many organization stopped requesting
  funding for the Tsunami
  
• Your gift must be irrevocable in order to get a
  tax-deduction.