Best way to spread Haiti relief funds

Marketplace Staff Feb 8, 2010

Best way to spread Haiti relief funds

Marketplace Staff Feb 8, 2010


Kai Ryssdal: Miley Cyrus has decided to do her part for Haiti relief. Disney’s “Hannah Montana” announced today that she’s organized a celebrity online auction to raise money for earthquake victims. Bidders could win some of her leftover party dresses or a tour of the set for Hugh Jackman’s new movie, that kind of thing. Interesting, sure, but not news in and of itself, until you get to the bottom of the press release, where it says that proceeds will go to the American Red Cross.

More than $640 million has been raised for Haiti so far. The biggest aid agencies, like the Red Cross, have gotten most of it. This week the Chronicle of Philanthropy explores some ways that that money might be distributed more widely. Stacey Palmer is the editor of the Chronicle. Welcome to the program.

STACEY PALMER: Good to join you.

Ryssdal: What happens when the biggest aid groups get the biggest chunk of the money?

PALMER: What happens is that everybody who didn’t get the money would like a share of it, and so there’s beginning to be some squabbles now that so much money has been donated. And everybody is good at doing different kinds of things, so there are questions about whether the right organizations are getting the money, and how does an average donor even know who is the best organization to support?

Ryssdal: And there has been a call, hasn’t there, for this pooling of donations, for everything to go to one big group and then that group parses it out.

PALMER: Right, that’s a solution that some other countries use where everybody gives to one coordinated fund. It’s sort of like the way the United Way works where everybody puts the money in, and some experts decide where it’ll go. But there’s always criticisms of those kinds of things, because who are the experts, who decides where it goes, so there’s a lot competition in that respect, too.

Ryssdal: We’ll do the downsides in a second, but let’s get the upsides. I mean, what are the positives to having one group collect all the money and then dish it out.

PALMER: If one group could collect all the money, it wouldn’t be based just on how great a group is at marketing its message and getting all those ads out there. But instead it might be, I’ve got an application process, we’ve got a group of experts reviewing, and saying these are the biggest needs in this disaster, and these are the groups that are best at doing it, and they would parse out the money.

Ryssdal: OK, so now back to the downsides, and those experts you were talking about. That’s kind of a scary term, when somebody else, some other expert decides how you get to do what you do, right?

PALMER: That’s one of the problems: Who gets to decide. But one of the concerns is that it could take a lot of time to get these donations out, because the experts are going to have to vet them all. But also, every time that that dollar has to pass through different hands, first it goes to the pool group, then it goes down to other people to pass it out eventually to the recipient, you lose some of that money along the way, and so nobody wants to see that happen.

Ryssdal: Let’s look at a real life example. The telethon, the telethon for Haiti that George Clooney ran a week or so ago, they decided to pool all their donations, right, and they’re distributing it?

PALMER: Exactly, so they’ve gathered together a bunch of experts, and they’re figuring out which groups decide to get the money. The Clinton/Bush initiative is pooling the money. So you can give to them, and then they’re going to decide which groups are going. So there’s a couple of different options for people who want to decide to give to the pool fund versus giving to the groups that they know about, like Red Cross.

Ryssdal: Over the long term, then, Stacey, I mean, which one of these would work better do you think?

PALMER: I think the pooled model might be able to get to more of the different kinds of needs. There’s a lot of things happening that people might not think so much about when they think about relief. They think about hunger and shelter, but there are other kinds of things that are needed. Haiti needs a lot more trees, because everybody is moving out to the countryside. And erosion is bad, the agriculture is bad, it’s not going to be able to sustain people. There are lots of amputees. People are going to need handicap assistance, that’s one of the sad things that happened about this disaster. So those are the kinds of concerns that don’t get publicity, but that a pooled fund might think about.

Ryssdal: Well, then, Stacey, what do we do next time? Next time there’s this huge event that happens, people need help, and Americans pull out their checkbooks, what do we do?

PALMER: The best thing to do is to give an immediate donation to whatever charity you trust but hold back some of that money and think about those needs that are coming long term. Think about it a little like your portfolio. You’re going to give some of it to the most immediate needs, and then you’re going to think a little bit about long term. So you don’t need to do it all right away. You can do some research, figure out what the best groups are, and if you’re not sure, give to one of these pooled funds, or ask some kind of expert. There’s loads of advice on the Internet right now that’s very, very good and very helpful.

Ryssdal: Stacey Palmer. She’s the editor of the Chronicle of Philanthropy. Stacey, thanks a lot for coming in.

PALMER: Thank you.

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