Charitable giving: the communications gap

Tornado and flood tragedies in recent weeks can't help but leave your heart aching for the victims.

Tornado and flood tragedies in recent weeks can't help but leave your heart aching for the victims. The  US Chamber of Commerce's Business Civic Leadership Center (BCLC), which tracks corporate donations to disasters, reported that as of May 12, a little over $16 million has been donated by businesses to help US victims of recent storms. 

Certainly, disaster relief donation by companies and by individuals is a good thing, but there are some challenges bubbling under the surface.

In the past week or so, Apple was credited for “expediting” release of a new app to encourage donations to tornado victims in Alabama.  But you'll notice the app doesn't enable direct donations- it just steers you to charity websites. That's because Apple refuses to permit charities to collect money directly in iTunes. While Apple won't explain why, the likely reason is unease over being expected to police where that money goes.

Transparency remains a nagging issue despite the earnest efforts of watchdog groups like Charity Navigator and Better Business Bureau. As a result of the botched Hurricane Katrina relief effort, a group called the Disaster Accountability Project was formed to ask questions about where donations go. Earlier this year, on the first anniversary of the Haitian earthquake, DAP reported most relief organizations were not being transparent about the money they collected.

Another factor is a disconnect between public expectations and the realities of delivering disaster relief.  Practitioners speak of “The CNN Effect,” as people rush to donate when they see an emotional need unfold on TV. For example, NBC Nightly News this past week did a story about a Detroit dog rescue group down to its last $42. Within 72 hours, the group reported on its Facebook page that it was flooded with more than $100,000 in donations.

But the downside of the CNN effect is that money chases the latest disaster that is made for media, not necessarily the disaster where help is most needed. Charities say they need to be able to have flexibility in where to use donations and how quickly. But such flexibility is controversial.

In Tennessee, folks are arguing because 15% of flood relief donations from 2010 are not yet committed. But the charities say disaster relief and recovery comes in stages, and money is often needed a year or more later. The Tennessean reports the criticism has just led to a new state law requiring charities to report how flood donations are spent.

As technology continues to make it easier to donate, there are good tips available for both individuals and companies in how to do so responsibly. But the public needs more frequent and ongoing communication from the charities on how they are using the funds. That might lead to more tolerance and trust from the public in return.

Mike Lawrence is EVP and chief reputation officer at Omnicom agency Cone.

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