One-Third of the $1.6-Billion Raised by U.S. Charities Has Been Spent

American charities raised more than $1.6-billion to help people in South Asia recover from the devastating

earthquake and tsunamis that struck last December.

In the days following the disaster, as emotional television footage and articles in the news media brought home the scale of the event, many relief groups saw unprecedented levels of giving, much of it from first-time donors.

The response has put relief groups in the unusual position of having large amounts of cash still on hand as the disaster’s one-year anniversary approaches. Over all, aid groups have spent about a third of the money they have raised for tsunami relief.

The public’s generosity has allowed relief groups to prepare for the long-term task of rebuilding the houses, schools, and businesses destroyed by the waves. Many charities have outlined multiyear plans to help the damaged sections of India, Indonesia, Sri Lanka, and other nations rebuild — and without the need for additional fund raising.

“It’s unprecedented for us,” says Mike Kiernan, a spokesman for Save the Children USA, in Westport, Conn., which still has $79-million of the $132-million raised for tsunami relief. “Most emergencies are underfunded, and we usually spend down what we receive fairly quickly.”

The charity plans to spend the rest of the money over the next four years on efforts that include building 3,000 new houses in Indonesia.

The group also stands to earn as much as $4-million in interest income during that period on its tsunami donations as they await allocation. Mr. Kiernan says these earnings also will go toward the recovery efforts in the region.

In the past, interest income from disaster funds was minimal, and the earnings were applied to the charity’s general fund.

Lutheran World Relief, in Baltimore, has spent just $4.1-million of the $23.4-million it received for the tsunamis, but it says that money will help pay for its 10-year rebuilding plans.

While charities are thankful to have money in the bank, saying it will help them make smart decisions with lasting impact, they also recognize that donors are eager for reports of progress and could be critical of slow spending.

To keep donors apprised of the accomplishments, Save the Children has begun producing printed and online progress reports every six months. Each report runs about 14 pages.

“We have never printed out special reports like this for individual disasters,” Mr. Kiernan says. “We felt that this was important because this is a multiyear effort and we took very seriously from the start the need to account for all the money we have received.”

Save the Children also created an Office of Stakeholder Accountability that serves as a “special internal auditing group” to monitor its work in the region.

First-Time Donors

Charities are especially interested in trying to keep many of the donors who gave to their organizations for the first time in response to the tsunamis.

AmeriCares, in Stamford, Conn., received gifts from more than 104,000 people who had not previously given, enabling the group to raise $45-million for tsunami relief. Mercy Corps, in Portland, Ore., raised $33-million, thanks in large part to 90,000 new donors.

At Save the Children, more than 90 percent of the 165,000 individuals who made gifts had never previously supported the organization.

Greg Forney, director of communications at Food for the Hungry, in Phoenix, says more than 7,000 new donors contributed to the $4.4-million raised for the tsunamis.

He says that the new donors are being kept updated on Food for the Hungry’s efforts, but that the charity has not simply sent those contributors the same materials it sends to its long-term donors.

“We are trying to build a relationship with them,” Mr. Forney says. “We want to bring them on slowly, to help them understand what Food for the Hungry is about,” without overwhelming them with too many appeals.

Food for the Hungry sent the new donors e-mail appeals to raise money for the charity’s efforts to provide relief to victims of Hurricane Katrina and the Pakistan earthquake.

More than 20 percent of the recipients also gave to one or both of these efforts, a percentage that Mr. Forney calls “very encouraging.”

AmeriCares has also achieved success with new donors.

Thirteen percent of them have since made additional donations, both in response to appeals concerning additional disasters and for the group’s general operating fund.

“While historically we have thought that people who contribute to disaster-relief efforts were more likely to view their donations as a one-time gift, this year we have seen a new trend emerging,” says Carolyn O’Brien, AmeriCares’s senior vice president of development.

Direct Relief International, in Santa Barbara, Calif., raised $14.3-million for tsunami relief, and has spent $9.5-million. The charity made no effort to solicit that money.

“We only do an end-of-year appeal,” says Jason Kravitz, a spokesman for the organization. “We never ask for money for individual disasters.”

Direct Relief is producing special reports every six months as a way to keep its donors — including the roughly 30,000 new ones — informed about its work. The charity also has regular updates on its Web site, including personal accounts of relief efforts, complete with pictures.

“It’s almost like a blog,” Mr. Kravitz says. “We’ve had tremendous feedback from it, and our donors now expect us to continue this type of communication.”

Mercy Corps is taking things one step further.

In January the group is bringing a delegation of big donors to Southeast Asia for a firsthand look at the organization’s work in the tsunami zone. Donors will pay their own expenses for the trip.

“With the one-year anniversary upon us, it’s all about accountability,” says Mercy Corps’s director of communications, Jeremy Barnicle. “We feel that the best way to thank major donors for their incredible generosity is to show them how their money is improving lives of tsunami survivors.”