Where Should the Money Go?

Charity leaders voice mixed views as Red Cross collects vast majority of Katrina contributions

The American Red Cross has put a price tag on what it expects to spend providing relief to Hurricane Katrina victims: $2-billion.

If the charity is

successful in raising that sum, it would equal almost all of the donations made in response to the September 11, 2001, terrorist attacks, and far surpass the $1.3-billion donated to U.S. relief groups for the December tsunamis.

The Red Cross says the gigantic figure reflects the vastness of the needs. It predicts that some four million people could require meals, shelter, financial assistance, and other services.

To date, the Red Cross has received $807.8-million of the $1.2-billion that charities have raised in the wake of Hurricane Katrina, nearly $7 out of every $10 donated.

The flow of dollars to the Red Cross, most of which will be spent on short-term aid, has caused many charities to question where the donations for long-term rebuilding will come from.

It has also touched off a debate within the charity world over whether any one organization should be the recipient of such a large share of the dollars that follow a major crisis.

“Monopoly in any form raises serious challenges,” says LaTosha Brown, director of the Alabama Coalition on Black Civic Participation, in Montgomery. “If that one entity breaks down, everything breaks down. It’s dangerous for us to depend on one agency.”

Ms. Brown and other black charity leaders on the Gulf Coast have formed a new relief effort, the Saving Our Selves coalition, in part out of concern that the Red Cross was not doing enough to meet the needs of black hurricane survivors.

49 Katrina Relief Funds

Charities in Louisiana, Mississippi, and Alabama are all vying for donations in the belief that they have the local knowledge that will be crucial to rebuilding cities and towns torn asunder by the storm. But many are struggling as they try to raise money on the national stage, often for the first time.

The Chronicle has identified at least 49 charities or special relief funds that are raising money to assist the people and localities devastated by the hurricane. How the activities of so many charitable entities can be coordinated to make sure donations are used efficiently, and what, ultimately, will be the best use of charitable contributions, are questions that remain open for debate.

In any case, private donations will pale in comparison to the federal government’s investment in the region. But nonprofit observers say philanthropy can play a vital role filling in gaps in aid and helping think through how government money should be spent.

While some charity officials question whether such a large percentage of donations should go to the Red Cross, many think the consolidation is a good thing.

Joshua Gotbaum, former chief executive of the September 11th Fund, which served as a central clearinghouse for donations after the terrorist attacks, thinks that one large charity needs to take the lead after a disaster, and that the Red Cross is in the best position to do that in this case.

“After a disaster, everybody wants to get in and so everybody fund raises,” says Mr. Gotbaum. “Many of the organizations that raise money frankly don’t have the competence to use it.”

Other nonprofit executives had hoped the Red Cross would play the role of primary collector of donations that could then be redistributed to other organizations as the needs become clearer.

“Perhaps they ought to share some of that money with groups that are going to be responding long-term in regard to rebuilding the destroyed or greatly damaged houses,” Millard Fuller, president of the Fuller Center for Housing, in Americus, Ga., suggested in an e-mail message.

But Marsha J. Evans, president of the American Red Cross, says paying for her charity’s own response is too costly to permit that. “We’re just not in a position to be able to do that, given the fact that we have not even begun to reach, even remotely reach, the goal that we’ve set,” she says.

$521-Million Spent

The Red Cross says the relief effort after Hurricane Katrina will be the most costly in its history. The organization says it already has spent more than $521-million providing food and shelter, physical- and mental-health services, and emergency cash to survivors.

In the first three weeks after the hurricane, the Red Cross provided more than 2.3 million overnight stays in 902 shelters across the country, distributed $337-million in emergency cash, and, along with the Southern Baptist Convention, served more than 12 million hot meals.

The Red Cross points to these statistics as evidence of its successful response to the hurricane. Not everyone, however, has been impressed by Red Cross operations in the wake of the disaster.

Hurricane survivors and nonprofit officials on the Gulf Coast say that in many areas — especially in rural locations and places with high percentages of minorities — the Red Cross did not set up shelters or feeding programs after the storm or responded in a disorganized or bureaucratic way.

Soon after Katrina struck, the local leaders who founded the Saving Our Selves coalition tried to work with the Red Cross in Biloxi, Miss., to help distribute food, clothing, and other supplies to people in need. Ms. Brown, one of the new group’s founders, says a Red Cross staff member rebuffed the leaders’ offer of help, saying the group would have to become an official “community partner” before the Red Cross could hand over the supplies.

But, says Ms. Brown, the official could not provide information on the process for doing that. She says it took a week to get her call returned, and that she still has not received the paperwork necessary to apply to become an official Red Cross collaborator.

In Georgia, De Kalb County kicked the Red Cross out of the one-stop center it had set up for evacuees seeking aid, saying that the organization’s operations were too chaotic.

Racial Concerns

Perhaps most serious are allegations that Red Cross services have been easier to come by in white, affluent neighborhoods than in poorer, minority neighborhoods.

Joe Leonard, executive director of the Black Leadership Forum, a Washington coalition of civil-rights organizations, traveled to Alabama, Louisiana, and Mississippi soon after the hurricane to assess the response by the Federal Emergency Management Agency and the Red Cross. “When we first got there,” he says, “the Red Cross didn’t have anything in the black communities.”

Mr. Leonard says that when he visited Bayou La Batre, Ala., a town about 35 miles south of Mobile, the Red Cross had set up a feeding station in the downtown area, which is largely white, while it was sending mobile vans to other, predominantly black parts of town.

“It’s like the ice-cream van,” says Mr. Leonard. But “if you don’t catch it when it comes around, you don’t eat that day.”

Ms. Evans of the Red Cross says the organization did everything it could in the days following the hurricane, especially given the magnitude of the storm.

“We were every place we could be,” says Ms. Evans, “but we clearly, and particularly in the initial days, weren’t every place we would have wanted to be.”

The Red Cross, she says, has already started to review and evaluate criticism of its response.

“The challenge for us is to sort through and figure out what [problems] were idiosyncratic — just an individual who on that day of the disaster perhaps wasn’t as forthcoming or was too bureaucratic in the response — and what [problems] are really core and central, and occurred more than once in some location,” says Ms. Evans.

Concerns about the Red Cross’s response to the disaster aside, some leaders in the nonprofit world simply wonder whether the concentration of so much of the charitable contributions at one institution is a good thing.

John G. Davies, president of the Baton Rouge Area Foundation, believes, like many, that the Red Cross does important relief work.

“The problem is that the long haul becomes the big challenge for communities,” says Mr. Davies. The Red Cross, he says, because its mission is to provide emergency assistance, plays a vital role in the first third — and most dramatic part — of a disaster. “But the less dramatic and equally critical two-thirds will fall on the shoulders of local organizations.”

Small institutions in the hurricane-ravaged regions have far less experience trying to compete for funds at the national level, says Mr. Davies. “The problem with any local organization is that it has no credibility beyond its constituency,” he says. “Although we have a sterling reputation in Louisiana and among our fellow community foundations, very few people know us, and it’s because we’re local.”

Like contributions from individuals, many of the corporate and foundation gifts announced so far have gone to large national relief organizations like the Red Cross and the Salvation Army.

But a few institutions are bucking the trend. The Conrad N. Hilton Foundation, in Reno, Nev., divided its grants between organizations providing immediate relief and those focusing on long-term recovery. The foundation awarded grants of $2.5-million to the Salvation Army, $1-million to the Red Cross, $1.5-million to the efforts of the Baton Rouge Area and the Greater New Orleans Foundations, and $1-million to the Foundation for the Mid South, in Jackson, Miss.

“When the media attention goes to another event and the immediate phase has ended, funding changes,” says Casey L. Rogers, a program officer at the Hilton Foundation. “The short-term response is terrific. But we were hoping to send a message to other funders that this response is both now and in the future.”

The Rockefeller Foundation, in New York, divided its $3-million commitment among three national organizations focused on rebuilding after the storm — the Enterprise Foundation, Habitat for Humanity International, and the Local Initiatives Support Corporation — and two local institutions in New Orleans, the community foundation and the Urban League.

“We recognize that for national foundations, we sometimes need local institutions as partners to help us in supporting local community-based organizations,” says Darren Walker, director of the Rockefeller Foundation’s domestic programs.

A ‘Placeholder’

Charities say that even for groups that focus on long-term rebuilding, the window of opportunity for fund raising is limited.

The Enterprise Foundation and the Local Initiatives Support Corporation, two national organizations that focus on economic development and low-cost housing, have started a Community Recovery Fund, which will make loans to finance the development of housing in areas hit by the storm.

The charities started the fund as a sort of “placeholder” to emphasize to foundations and other donors that economic-development groups can bring expertise and experience to the effort to rebuild the region, says Bart Harvey, chief executive officer of the Enterprise Foundation.

“This is a little bit of the cart before the horse,” says Mr. Harvey. “But we wanted to have these major resources in hand to assure that community development would have a seat at the table.”

Many Players

The Community Recovery Fund is just one of dozens of charitable efforts to help the victims of Hurricane Katrina.

In addition to charities that quickly come to mind after a disaster, such as Catholic Charities and Habitat for Humanity, donors can also contribute to funds set up by the National Trust for Historic Preservation, the National Association for the Advancement of Colored People, or one of the multiple funds set up by government officials.

Offering donors so many options has its benefits and its challenges, says Lester M. Salamon, director of the Center for Civil Society Studies at the Johns Hopkins University, in Baltimore.

“People want to find a way to connect to this crisis, and you’re likely to increase the total amount of funding if you have multiple organizations mobilizing their own communities,” says Mr. Salamon. “The big negative, of course, is that people will trip all over themselves. The coordination problem becomes significant.”

So far, one of the biggest fund-raising powerhouses has been a relief fund started by two former presidents, George H.W. Bush and Bill Clinton, which has raised more than $100-million. In addition, funds have been created by the governors of Alabama, Mississippi, and Louisiana, and by the mayor of New Orleans.

Exactly how the money raised by these funds will be used is not clear, but charity officials say it will be crucial that the distribution of funds not become politicized, and that groups that are often overlooked, such as minorities and people living in rural areas, have a say in how the funds are spent.

“It is imperative that these bodies have a place at the table for those who traditionally don’t receive help from the usual movers and shakers,” says George D. Penick, president of the Foundation for the Mid South.

At this point, no one knows how much Americans will ultimately give to help the Gulf Coast recover.

While government will pick up much of the tab for reconstruction, many charity officials believe that advocating for fairness and equity in the rebuilding process and providing support for careful planning of the effort would be among the best uses of limited philanthropic dollars.

“There needs to be money in the hands of people who are representing the interests of low-income people, because they are usually the softest voice,” says Mr. Harvey, of the Enterprise Foundation.

“They may have some very different sets of issues than the more powerful business interests do in how things get rebuilt,” he adds.

Fundamental social issues such as race and poverty will be at stake in the rebuilding process, and it will take thoughtful planning to make sure that the unequal social conditions that were in place before the storm are not simply rebuilt, says Mr. Salamon, of the Center for Civil Society Studies.

“People need to get the mental power organized to make sure that this is done in a sensitive way,” he says. “Private funding could easily be spent to dream up two or three alternative game plans for how this could be done.”

Mr. Davies, of the Baton Rouge Area Foundation, agrees.

“How do you reconstitute a city?” he asks. “They don’t just drop out of the sky.”

Nicole Lewis, Suzanne Perry, Elizabeth Schwinn, and Ian Wilhelm contributed to this article.