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Giving After Disaster Strikes

Natural disasters can make humans feel powerless.

As I write this article, Hurricane Irma has just wreaked havoc in the Caribbean and the Southeast U.S., and Houston residents are still coping with the damage left in the wake of Hurricane Harvey. Nearly simultaneously, a devastating earthquake off Mexico’s southern coast left dozens dead, and thousands of people in the Western U.S. have been evacuated amid an especially nasty season of wildfires.

For those who can only watch, the impulse to help is both natural and admirable. But while there is no such thing as “bad generosity,” some gifts are more valuable than others. Letting emotion drive your charitable giving can lead you to be less effective or, in the worst case, to give in a way that is actually counterproductive.

The first step is selecting where to give. Some people in the wake of the disaster just default to the first charity they think of, usually a big-name organization such as UNICEF or the Red Cross. Some people face the opposite problem; instead of being too quick to give, they end up paralyzed with indecision when trying to choose among the many organizations asking for help. Neither of these approaches is ideal.

Instead, you should approach disaster giving much the same way you would approach choosing an organization for a major gift or bequest. At Palisades Hudson, we recommend our clients look at three major attributes when evaluating a charitable organization: efficiency, effectiveness and innovation. In other words, ask these questions: How well does the organization manage the donations it receives? How well does the organization address the issue it is designed to combat? And compared to other organizations working on similar issues, does it do the same thing better or is its work qualitatively different? How much each of these factors matter, especially the last, is up to you – but you should be able to answer all the questions. Lack of transparency is, itself, a reason for concern.

After a disaster, there is no one-stop shop for finding the most effective place to give. But even a simple Google search can alert you to any high-profile controversy surrounding an organization’s management or use of funds. Even better, there are several well-known organizations dedicated to evaluating charities, including Charity Navigator, GiveWell and GuideStar. These websites can give you a useful overview, especially in conjunction with one another. Consider how much of the charity’s inflow goes to administration and overhead, for instance. GiveWell also looks directly at how much capacity an organization has for spending additional donations – arguably hard to measure, but a useful thing for a donor to know.

Many experts suggest that donating to local charities in a disaster area does more good than donating to big national or international organizations. Local groups with significant experience in a particular location often operate more smoothly and are ready to spring into action without having to transport people and resources into an area still coping with the after-effects of a disaster. You can also be sure any follow-up donations will go to those in the affected community, if that is important to you. In addition, smaller organizations tend to rely more on volunteers and often spend less money on fundraising, so donations go further.

If you’re not sure where to start when looking for a place to donate, a quick online search for the name of the disaster in question and “ways to help” will usually bring you to lists compiled by reputable news outlets. You can use these lists as a starting place, but be sure to check for a solid track record of effective and efficient aid before you contribute, whether it is a big-name organization or a local food bank. The Federal Emergency Management Agency (FEMA) also offers suggestions if you are unsure where to give.

Be wary of crowdfunding appeals from people you don’t know. Many of the calls for help from disaster victims on sites like GoFundMe are real, but others are from people taking advantage of strangers’ generosity. Some fraudsters reportedly even copy the photographs and text from real appeals, meaning that without some personal connection to the recipient, it can be hard for even careful supporters to evaluate these requests. While crowdfunding sites do their best to crack down on scams, volume can make this effort challenging. All else being equal, give to a vetted charitable organization; your gift will go farther, and you can be reasonably sure it will get to people who need it.

Once you have selected one or more organizations to support, you may wonder what to give. Donating tangible goods like clothes or bottled water may seem helpful, but you should nearly always resist that impulse. Houston doesn’t need your old clothes and teddy bears.

That assessment may sound harsh, but it is based in observation. After Hurricane Mitch struck Honduras in 1998, useless clothing – including a bale of winter coats – arrived in the Central American republic. Drivers who couldn’t find recipients for truckloads of clothes donated in the wake of Hurricane Andrew in 1992 dumped them on the side of the road, where they quickly became more trash to clear away. And after the shooting in Newtown, Connecticut – a tragedy, but not a natural disaster – the incoming donations included about 67,000 teddy bears. Every child in the community got a few bears apiece; the rest had to be disposed of.

Even local organizations that would normally welcome donations of goods may not have ways to transport or store them after a major catastrophe. Bob Ottenhoff, president and CEO of the Center for Disaster Philanthropy, told NPR in the wake of Hurricane Harvey: “With the floods blocking off streets, when warehouses are not available, there’s no place for these products — there’s no place to store anything, there’s no place to distribute anything. And that’s going to be the case for some time.” If you have items in good condition and cash is tight, consider selling them and donating the proceeds instead.

Locals who were lucky enough to escape the worst of a disaster themselves may have a few more options. While out-of-towners shouldn’t strain resources by turning up without a plan, organizations like the National Volunteer Organizations Active in Disaster (NOVAD) coordinate local volunteers to work at shelters, food pantries and cleanup sites. Such organizations urge volunteers not to “self-deploy” – that is, don’t just show up, even if you live close by. Let the professionals direct you where you can do the most good.

People nearby but outside the immediate disaster area may also have access to other ways to help. Ahead of both Hurricane Harvey and Hurricane Irma, Airbnb let hosts open their homes to evacuees for free. And major disasters often result in blood shortages, so local blood drives are often a regional way to pitch in.

For anyone who isn’t near a disaster area, and even for most who are, cash donations are nearly always the most helpful choice. Texting a donation, while convenient when available, is usually not the best method, because charities have to wait on the phone company to release the money. Donating directly at a charity’s website will get the money to its destination quicker. You should also keep a receipt of all your donations, especially to organizations where such gifts are deductible at tax time.

Depending on the size of your intended gift and your resources, you may also want to consider giving appreciated securities, such as shares of stock or mutual funds. Such a gift can stretch your generosity further, because you can avoid capital gains tax on the appreciation. This means that giving the appreciated security directly allows you to transfer extra value as compared to selling the security and donating the proceeds after paying tax.

If a disaster or tragedy inspires you to develop a long-term philanthropic plan, there are a variety of planning tools at your disposal. (My colleague Eric Meermann wrote an article, “Creative Approaches To Charitable Giving,” describing many of them.) However, for immediate response in a disaster, direct gifts of cash or securities are almost always the best way to go, since other options can be complex and time-consuming to set up.

Many charities receive a great deal of support right after a disaster, but find that it trickles off in the long weeks and months of rebuilding. Consider setting a calendar reminder in a month or two to donate again, after media attention has died down and need may be greater. Or you might consider an automatically recurring donation on a monthly or quarterly basis. In the long run, consider whether an ongoing issue such as hunger or homelessness is worth supporting, even without the emotional trigger of a headline-making disaster.

Fred Rogers, of “Mr. Rogers’ Neighborhood,” famously encouraged those who are frightened by disasters and tragedies to “look for the helpers” in times of disaster. Stepping up to offer that help is always an admirable urge, and taking the time to help thoughtfully can ensure your help goes as far as possible.

Senior Client Service Manager Rebecca Pavese, based out of Atlanta, contributed several chapters to our firm’s recently updated book, Looking Ahead: Life, Family, Wealth and Business After 55, including Chapter 2, “Relationships With Adult Children”; Chapter 3, “Planning For Incapacity”; and Chapter 7, “Grandchildren.” She was also among the authors of the firm’s book The High Achiever’s Guide To Wealth.