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Disaster GivingDisaster Giving5/30/20065/30/2006

Heidi FrederickHeidi FrederickResearch Development Research Development

SpecialistSpecialist

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The Center on The Center on Philanthropy at Philanthropy at

Indiana UniversityIndiana UniversityLargest, most comprehensive academic center devoted to increasing the understanding of philanthropy and improving its practice.

Staff ~ 50Faculty ~ 60The Fund Raising School faculty ~ 50Budget ~ $10 million a year

Core program areas include academic program (M.A. & Ph. D. programs), the Fund Raising School, Public Affairs, Philanthropic Services, and Research.

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OverviewOverview

Magnitude of disaster relief givingWho gives for disaster reliefExplore individual giving for disaster reliefHow donations are made by individuals for disaster reliefCompare disaster relief giving to national givingWhat to look for in giving to nonprofit organizationsLaws governing disaster relief giving

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Comparing Disaster Comparing Disaster GivingGiving

* ’05 Hurricanes’ data are preliminary, do not publish

Source: Center on Philanthropy at Indiana University, 9/11 figures from Chronicle of Philanthropy

2,8001,925

5,296

150

0

1,000

2,000

3,000

4,000

5,000

6,000

11-Sep Tsunami '05Hurricanes

Pakistan

US Private Donations to Disaster Relief Efforts

(in Millions)

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Disaster Donations – Disaster Donations – 6 Month Timeline6 Month Timeline

$3,427

$207$225$342

$519

$3,163

$2,828

$3,277$2,971

$2,214$2,679

$2,200$2,146

$1,424

$1,120

$1,721$1,808

$1,820

$1,901

$831

$226$498

$1,880

$501

$934

$676

$2,000

$1,429

$904$797$727

$1,060$1,282 $1,410 $1,556

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

Gulf Coast Hurricanes 9/11 - Chronicle of Philanthropy Tsunami -COP

Some estimates assume a constant influx of dollars per week

Source: Center on Philanthropy at Indiana University, Chronicle of Philanthropy figures for 9/11

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American Red Cross’American Red Cross’Largest Donations to International Largest Donations to International

DisastersDisasters (in Millions)(in Millions)

$12

$556

$14

$39

$12

$50

$18

$14

$25

$20

0 100 200 300 400 500 600

Asian Earthquake 10/05

Asian Tsunami 12/04

India earthquake '01

Balkans crisis '99

Turkey earthquake '99

Hurricane Mitch '98

Rwanda crisis '94

Armenia earthquake '88

Africa famine '85

Mexico earthquake '85

Source: Associated Press and Center on Philanthropy at Indiana University

77

$2,116

$79

$6

$1,072

$15

$0 $500 $1,000 $1,500 $2,000 $2,500

Gulf Coast Hurricanes '05

Hurricanes '04

Wildfires Southern CA '03

September 11 '01

Oklahoma City Bombing

American Red Cross’American Red Cross’Donations to Domestic DisastersDonations to Domestic Disasters

(in Millions)(in Millions)

Source: Center on Philanthropy at Indiana University, American Red Cross, Chronicle of Philanthropy

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Gulf Coast HurricanesGulf Coast HurricanesU.S. Private Contributions - PreliminaryU.S. Private Contributions - Preliminary

($ in Millions)($ in Millions)

Preliminary data do not publish: Source, Center on Philanthropy at Indiana University; The Preliminary data do not publish: Source, Center on Philanthropy at Indiana University; The Foundation Center: Snapshot of philanthropy’s response to the Gulf Coast Hurricanes; US Chamber Foundation Center: Snapshot of philanthropy’s response to the Gulf Coast Hurricanes; US Chamber of Commerce, From Relief to Recoveryof Commerce, From Relief to Recovery

TOTAL TOTAL ESTIMATE: ESTIMATE:

$5.3 $5.3 billionbillion

Individuals $4,250.0

80%

Foundations $110.0

2%

Corporations & Corporate

Foundations $936.018%

99

Individuals$1,708.00

60.8%

Foundations, $379.8013.5%

Corporations/Corporate

Foundations, $721.825.7%

September 11th GivingSeptember 11th GivingU.S. Private ContributionsU.S. Private Contributions

($ in Millions)($ in Millions)

TOTAL TOTAL ESTIMATE: ESTIMATE:

$2.8 $2.8 billionbillion

Data: The Data: The Foundation Foundation

Center: September Center: September 11 The 11 The

Philanthropic Philanthropic ResponseResponse

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Individual Giving for Individual Giving for Katrina, Rita, and Wilma Katrina, Rita, and Wilma

relief effortsrelief efforts63% gave money for hurricane relief in 200533% of households gave more than $100.36% gave between $26 and $99.31% gave under $25.

Source: The Conference Board, survey of 5,000 households, April 2006.

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Comparing Giving by Comparing Giving by DisastersDisasters

-Individual Donations-Individual DonationsMedianMedian MeanMean % %

DonatedDonated

Katrina, Katrina, Rita, & Rita, & WilmaWilma

$26-$99$26-$99 63%63%

Tsunami*Tsunami* $50$50 $126$126 24%24%

9/119/11 $50$50 $134$134 66%66%

*Tsunami data is preliminary, do not publish

Source: Katrina- The Conference Board, survey of 5,000 households; Tsunami -Center on Philanthropy Panel Study; 9/11 – Center on Philanthropy, America Gives 2001

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$241.59$100.00

$142.17$75.00

$72.14$50.00

$0.00 $50.00 $100.00 $150.00 $200.00 $250.00

Amount Donated to September 11

$80,000 +

$40,000-80,000

$0-40,000

Inco

me

Lev

els

MedianAverage

September 11th GivingSeptember 11th GivingAverage and Median Giving by Income LevelAverage and Median Giving by Income Level

Source: Center on Philanthropy at Indiana University

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How Donations Are Made How Donations Are Made Asian TsunamiAsian Tsunami

-Preliminary Results – Do not publish-Preliminary Results – Do not publish

36.60%9.50%

31.20%

15.00%

5.00%

5.40%

7.00%

12.20%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Church

Internet

School/Work

Store

Charity Event

Mail/Telephone

TV, Radio, Media

Other

Source: The Center on Philanthropy Panel Study, 2005.

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Effects of Disaster on Effects of Disaster on GivingGiving

75% of households reported 9/11 giving was in addition to other giving in ’01 (INDEPENDENT SECTOR).84% of foundations reported their 9/11 giving was in addition to other giving in ’01 and ’02 (Foundation Center).72% of corporations reported their giving was in addition to other giving in ’01 and ’02 (Conference Board).Our research shows that giving to disasters may have short term effects on fundraising for some organizations, but has little effect even six months later.

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Effect of Disasters on Effect of Disasters on Nonprofit Nonprofit

OrganizationsOrganizationsBased on research examining total giving in the years before and after disasters from 1955 to 1999, after controlling for changes in the economy, they found no increases or decreases in total U.S. giving associated with disasters (Brown & Rooney, 2002).Among international relief and development organizations the effect of $1 being donated to organization “A”, leads to a decrease in donations of $.05 to organization “B” doing similar international relief work (Wilhelm & Ribar, 2002).

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National AveragesNational Averages- Of those households that made donationsNational Donations 69% of households donated at least $25 in

2000, 67% in 2002. Mean household donation was $2,140 in 2000,

$1,872 in 2002.

Disaster Relief Donations 64.5% of households donated to the Gulf Coast

Hurricanes and/or 9/11 Mean household donations were $126-$135

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Individuals$187.92 75.6%

FoundationsFoundations$28.80$28.80 11.6% 11.6%

BequestsBequests$19.80 $19.80 8.0% 8.0%

CorporationsCorporations$12.00$12.004.8%4.8%

United States TotalUnited States Total2004 Contributions: 2004 Contributions: $248.52 Billion by $248.52 Billion by Sources of GivingSources of Giving

Source: Giving USA Foundation – AAFRC Trust for Philanthropy/ Giving USA 2005

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Environment/Environment/animalsanimals$7.61$7.613.1%3.1%

FoundationFoundationss

$24.00$24.00 9.7% 9.7%

HumanHumanservicesservices$19.17$19.17 7.7% 7.7%

InternationInternationalal

affairsaffairs$5.34$5.342.1%2.1%

Arts, culture, Arts, culture, and and

humanitieshumanities$13.99$13.995.6%5.6%

Public-societyPublic-societybenefitbenefit$12.96$12.965.2%5.2%

EducationEducation$33.84$33.84 13.6% 13.6%

UnallocateUnallocatedd

givinggiving$21.36$21.368.6%8.6%

2004 Contributions: 2004 Contributions: $248.52 Billion By Type of $248.52 Billion By Type of

RecipientRecipient

Religion $88.30 35.5%

Health Health $21.95$21.958.8%8.8%

Source: Giving USA Foundation – AAFRC Trust for Philanthropy/ Giving USA 2005

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1964 1969 1974 1979 1984 1989 1994 1999 2004

Data are rounded.Data are rounded.

Total Giving As a Total Giving As a Percentage of Gross Percentage of Gross Domestic Product, Domestic Product,

1964-20041964-2004 2.12.2

1.71.81.71.71.82.12.0

Source: Giving USA Foundation – AAFRC Trust for Philanthropy/ Giving USA 2005

2020

1.4

1.6

1.8

2.0

2.2

2.4

2.6

1964 1969 1974 1979 1984 1989 1994 1999 2004

Personal income Disposable personal income

Giving As A Share of Giving As A Share of Personal and Disposable Personal and Disposable Personal Income 1964-Personal Income 1964-

20042004

Source: Giving USA Foundation – AAFRC Trust for Philanthropy/ Giving USA 2005

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Organizations Receiving the Organizations Receiving the Largest Amount of Private Largest Amount of Private

SupportSupport(2004, in Million)(2004, in Million)United Way $3,884

Salvation Army $1,546Feed the Children $888American Cancer Society $868AmeriCares Foundation $801YMCA $773Gifts In Kind Foundation $750Lutheran Services in America$723Fidelity Charitable Gift Fund$683Catholic Charities USA $581

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American Red Cross $2.116 billionSalvation Army $325 millionCatholic Charities USA $133 millionBush-Clinton Katrina Fund $100 millionHabitat for Humanity $78 million

Organizations Receiving Organizations Receiving The Most Funds for the The Most Funds for the Gulf Coast Hurricanes Gulf Coast Hurricanes

Relief EffortsRelief Efforts

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599,575 626,225 654,186692,524

733,790773,934

819,008865,096 909,574

964,4181,010,395

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

The Number of 501(c)(3) The Number of 501(c)(3) OrganizationsOrganizations

Source: Giving USA Foundation – AAFRC Trust for Philanthropy/ Giving USA 2005

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The Number of 501(c)(3) The Number of 501(c)(3) OrganizationsOrganizations

The number of registered charities increased by 4.8 percent between 2003 and 2004.This number includes some, but not all, religious congregations. Some scholars estimate that there are 300,000 to 350,000 congregations in addition to registered charities, making an official count of charitable subsector approximately 1.3 to 1.35 million entities. A study by Kirsten Gronbjerg at Indiana University found one-third more nonprofit organizations operating in the state of Indiana than were registered at the federal level. If the same is true for other states, the number of registered charities, congregations, and not-yet registered charities could be as high as 1.7 to 1.8 million.

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What to Look for In What to Look for In NonprofitsNonprofits4,000 websites collected money for Hurricane Katrina and

60% were oversees suggesting they may be fraudulent (FBI). Always go to the official website for an organization. Match your interests (even with disaster giving).

Relief vs. Rebuilding, Kidney Disease vs. Animals You can go to the Network for Good & Interaction to find out what organizations are doing for disaster relief.

Check out an organization’s website for situation reports (the timing and thoroughness will tell you quite a bit about an organization) or check out groups like the Better Business Bureau (BBB) Wise Giving Alliance, But….Don’t worry so much about what % of your gift goes for administrative costs, consider making the gift unrestricted.

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The LawThe LawAny individual can give money to any person or any organization. When the donor desires a tax deduction for that gift that is when the law comes into play.To receive a tax deduction (which means you have to itemize your deductions on your taxes), you must give to an IRS designated 501(c)(3) organization or its equivalent. Organizations must apply for articles of incorporation from the State and for tax-deductibility status (501(c)(3)) from the IRS.

After a disaster this process is usually fast-tracked.

Organizations are then required to use your gift as they said they would when you gave.

This means gifts for Katrina relief cannot be spent on gifts for Rita relief.

Because giving is located in the tax code that defines charity, giving must be for a charitable purpose. Loosely defined, but had consequences for 9/11.

American Red Cross troubles in 9/11Reason why many organization stopped requesting funding for the Tsunami

Your gift must be irrevocable in order to get a tax-deduction.