Red Cross says domestic disaster dollars depleted

It's been less than three months since the Red Cross announced that Jeff Towers would be the new chief development officer for the Red Cross. Technically, he's only been on the job since May 5th.

Even though he might have missed the executive shake-up from this past winter, a major RFP process for new fundraising consultants, a contenious funding relationship between local chapters and the national office, and ongoing attention from pesky bloggers... today he is dealing with a serious fundraising problem.

The Associated Press is reporting that during a conference call today, Towers said that its Disaster Relief Fund is wiped out and it's being forced to borrow money to help flood victims throughout the Midwest.

The shortage in the organization's only domestic disaster relief fund comes as it continues flood relief efforts in soaked Iowa and ramps up its work downstream in Illinois and Missouri as more flooding is expected there. Officials said the Red Cross has 2,500 workers on the ground, 89 percent of them volunteers.

Joe Becker, senior vice president of disaster services, said the fund has been depleted over the past few years in the absence of large-scale disasters that bring attention to the relevance of the Red Cross.

"We have had a large number of mid-size disasters or silent disasters that have cost us a considerable amount of money where we've not been able to raise what it's cost us to provide that service," he said.

So far the flood relief work in the Midwest has cost $15 million. Towers estimated that the cost could rise to $40 million and that funds are desperately needed. If you would like to donate now, you can do so by clicking here.

American Charities Raise $33-Million for Asian Disasters

The Chronicle of Philanthropy released the first real fundraising numbers I've seen to date on the pair of recent natural disasters in China and Burma.

"American relief groups have raised at least $32-million for victims of the China earthquake and the Myanmar cyclone. The groups say about $16-million has been donated to each cause."

Hat tip to Caroline Preston for pulling together the great research in pulling together a long list of foundations who have made big grants and the charities that have been in a position to put the good will to work where it's needed.

Fundraisers encounter challenges in cyclone fundraising

The tragedy of what Cyclone Nargis did to Burma's delta region is almost beyond comprehension.

The International Committee of the Red Cross and Oxfam have estimated that the death toll of 100,000 could be made significantly worse if disease sets in. More than one and a half million people in desperate need of food and water.

So, is it just me or have donors been slow to respond?

Save the Children, Christian Aid, World Vision International and the British Red Cross all began fundraising last Tuesday.

Unfortunately, the military junta in Burma has displayed "sluggishness or suspicion when it comes to taking up offers of overseas and even non-governmental aid." The lack of media access has prevented the worldwide distribution of videos and still images. Are donors getting a free pass as a result?

I mean... after Hurricane Katrina and the Tsunami, a lot was written by Convio, NTEN, and others about the lessons learned by nonprofit fundraisers. Rapid response on the internet was supposed to have revolutionized fundraisers ability to raise needed money quickly.

Unfortunately, not only do fundraisers need to react quickly in order to raise the needed funds, but relief organizations have any equally difficult task of trying to figure out how to spend the money that is raised. From last Thursday's Times Online:

A national British appeal was launched today to raise money for the aid effort in Burma. The major overseas aid charities say they will join forces and co-ordinate their fundraising and emergency relief efforts due to the extent of the disaster and the dire need of the Burmese people.

The Disasters Emergency Committee (DEC), the umbrella group which represents the 13 biggest aid charities and co-ordinates major disaster appeals, will run the campaign. The DEC took almost two days to make up its mind on whether or not to launch a national appeal, similar to that after the Asian Tsunami.

There have been fears that the charities would struggle to spend a large sum of money effectively due to restrictions placed on their workers by the military dictatorship in the country. The cash raised will go towards not just emergency shelter and food, but reconstruction and rehabilitation afterwards.

To learn more about where you can donate, go here.

September 11 Memorial hits fundraising goal

From the New York Sun:

A fund for the National September 11 Memorial & Museum at the World Trade Center has reached a $350 million construction fundraising goal after a recent donation by the financial services firm Cantor Fitzgerald, which lost 658 employees in the attacks of September 11, 2001.

Mayor Bloomberg, who took over as chairman of the September 11 Memorial & Museum in October 2006 and has donated at least $15 million to the project, announced yesterday at the quarterly board of directors meeting that more than $217 million toward the first phase of fund-raising had been raised in the past year and a half, including $10 million from Cantor Fitzgerald. More than 60,000 individuals contributed from 50 states and 31 countries.

I'm not sure what the bigger takeaway is... Mayor Bloomberg knows how to get things done OR the fact that they did it with the classic donor pyramid approach by getting the top 15 donors to give more than half of the $350 million raised for the first phase of fundraising?

House Committtee investigates two Veterans charities over excessive fundraising charges

The President and Founder of the nonprofit group "Help Hospitalized Veterans" was forced to testify before the House Committee on Government Oversight and Reform late last week.

Forbes reported this story:

The focus of Thursday's session was Roger Chapin, president of Help Hospitalized Veterans (HHV) of Winchester, Calif., and the Coalition to Salute America's Heroes Foundation in Ossining, N.Y. Chapin had declined an invitation to appear voluntarily at a December hearing, forcing the committee to subpoena him.

Philip Rucker covered the story on Friday and shared enough details to guarantee the scandalous story would receive front page treatment in Friday's Washington Post.

At a raucous, three-hour hearing [Thursday], House members questioned California entrepreneur Roger Chapin about his management of two charities. One charity, Help Hospitalized Veterans, spent hundreds of thousands of dollars in donations that were to help wounded soldiers on personal expenses for Chapin, executive director Mike Lynch and [conservative activist] Richard A. Viguerie, to whom the charity has awarded millions of dollars in fundraising-consulting contracts, the hearing found.

The expenses included at least $340,000 in meals, hotels and entertainment; a $135,000 loan to Lynch for a divorce settlement with his former wife; a $17,000 country club membership; three airplane tickets to Hawaii; and a $1 million loan to Viguerie for a start-up initiative at his firm, several members of the committee said.

Rep. Henry A. Waxman (D-Calif.), chairman of the committee, said Help Hospitalized Veterans raised more than $168 million from 2004 to 2006. The charity spent a quarter of those donations on the veterans, with the rest going to direct-mail fundraising, salaries and other expenses, Waxman said.

At one point during the hearing:

Rep. Christopher Shays (R-Conn.) asked Chapin what would happen if his charities told donors how their donations were spent.

"If we disclose, which I'm more than happy to do, we'd all be out of business," Chapin said.

"Nobody would donate. It would dry up."

Chapin said few people know how expensive fundraising can be.

"If I could do better, I would," Chapin said. "I've tried television, I've tried radio, I've tried foundations, I've tried corporations and the only thing that works is direct mail."

You can watch or listen to the hearing here.

(Photo Credit: Sarah L. Voisin, The Washington Post)

James Brown's children fight late singer's charitable trusts

According to an Associated Press story on Time.com:

Five of James Brown's children say their late father's will should be invalidated because his former advisers used undue influence to get him to create charitable trusts that the advisers would profit from, according to court documents filed this week.

The New York Times adds this:

Five Brown children are challenging the will in Aiken County Probate Court. They claim Brown's longtime advisers Buddy Dallas, Alford Bradley and David Cannon convinced the soul singer to create the trusts so the advisers would profit from managing the two charities after Brown died.

Just how much money is involved in Brown's estate is unclear. In October, Forbes reported Brown made an estimated $5 million in 2005 alone. But attorneys have said Brown's accounts do not have the money they expected.

Did public radio put pledge drive before breaking news?

On December 27th, Benazir Bhutto was assassinated as she left a rally for the Pakistan Peoples Party. The Opposition leader's death is a major news story since many observers predict it could spell uncertainty for Pakistan's future.

While almost all news outlets gave the story breaking news coverage, the public radio station WNYC in New York decided to to go ahead with a one-day fundraiser that day.

FishbowlNY, the media news and gossip blog, clipped a couple angry listener comments from WNYC's message board and ran a story with the title, "WNYC Listeners Fume Over Fundraising That Interrupts Bhutto Coverage."

One comment from a listener named Evan Robinson puts it this way:

I too am shocked and dismayed at WNYC's continuing the pledge drive during this tragic and important event. The WNYC I used to know was the one that suspended a pledge drive when Leonard Bernstein passed away. The management at that time recognized the importance of the event to the culture, the city and the world, and saw fit to honor an important figure rather than beg for money. Laura Walker owes all of WNYC's listeners an apology for such a crass demonstration.

Even if Evan's comments are a bit over the top, the reaction does highlight the difficult decision all fundraisers face when major news events or natural disasters interrupt our campaign plans.

Brothers get 8 years prison for Katrina donation scam

Two Houston brothers were each sentenced this week to more than eight years in prison for wire fraud and aggravated identify theft in connection with operating a Web site that purported to raise money for the Salvation Army to help Hurricane Katrina victims.

The brothers were convicted in June after a four-day trial. According to the U.S. Attorney's Office, they registered a Web site called www.salvationarmyonline.org on Sept. 3, 2005 - less than a week after the hurricane hit the gulf coast.

More than 250 people donated over $48,000 before the corresponding PayPal accounts were frozen because of reports of fraud, according to the prosecution.

U.S. District Judge David Hittner sentenced Steven Stephens, 24, to 63 months each on six convictions of wire fraud, prosecutors said Wednesday. U. S. Attorney Don. DeGabrielle told the Houston Chronicle that Hittner sentenced Bartholomew Stephens, 27, to concurrent 57-month prison terms on each of his six wire fraud convictions.

Fires impact San Diego fundraisers

The 14th annual San Diego Triathlon Challenge, which was scheduled for yesterday, was canceled because of the wild fires.

The event is the primary fundraiser for the local Challenged Athletes Foundation, which provides wheelchairs, prosthetics, coaching and travel expenses to the physically challenged. The half-Ironman distance relay raised nearly $12 million the first 13 years, including more than $1 million last year.

Another major CAF fundraiser, the Qualcomm Million Dollar Challenge bike ride from San Francisco to San Diego, was cut short last Tuesday near Santa Barbara as the cyclists entered fire-ravaged Southern California.

Virgina Tech processes 90,000 gifts since shooting

This blog has previously discussed the fundraising actions taken by Virginia Tech's development office after the campus shooting earlier this year.

I was a little surprised today to see the school has received more than 90,000 gifts of consolation from around the world. The response was so large, the school has its own archive room tagging, photographing, and logging all donations into a database.

The Associated Press reports:

Tech has received items from across the country and around the world, including letters from Argentina and the ambassador of Jamaica, a U.S. Coast Guard buoy with signatures of Tech graduates from Puerto Rico and a jacket with signatures of University of British Columbia engineers from Canada.

Though there have been many proposals for what to do with the -- including a possible museum to house the collection -- no decision has been made.

Baby Jessica's $1 million trust fund

Twenty years ago, an 18-month old girl named Jessica McClure captured the nation's attention when she was trapped in a well behind her parents Texas home.

Sympathetic viewers were glued to their televisions as "Baby Jessica" was rescued after a 2 1/2 days. Strangers showered the family with teddy bears, homemade gifts, cards and cash. The money was placed in a trust fund which Jessica is to receive when she turns 25.

An Associated Press article today reports that Jessica is leading a quiet existence today - however that might all change in 3 1/2 years when all the donations sent to her when she was a baby mature into a payment of $1 million or more.

I found an article from 1997 on the ten year anniversary of the rescue - and it looks like the trust fund was valued at $1 million even then - so isn't it possible the money has significantly appreciated since then?

The story made me wonder, "Why was a trust fund set up?"

Her parents, Chip and Cissy McClure, have been described as poor teen-agers in 1987 struggling to make ends meet during the depths of the oil bust.

The McClures were also criticized for quickly spending at least $80,000 of the money sent to them. Much of it went toward a failed business. They divorced in 1990.

So, I guess well wishing donors wanted to make sure the money actually got to Jessica, but setting up a trust fund that matures when she hits 25 seems to miss the point of donor intent.

Either way, if you sent money to Baby Jessica, rest assured knowing that in a little over 42 months from now, that money will reach its intended target.

Shakira gives $45 million to charity

Shakira announced an enormous $45 million charity donation yesterday in New York.

The Colombian superstar revealed that the charity she co-founded, Latin America for Solidarity Foundation, will donate $40 million to help earthquake stricken Peru and damage caused by a hurricane in Nicaragua.

She gave the news at a summit on global climate change yesterday, organised by Bill Clinton, says Reuters.

The singer also revealed a $5 million effort to help children in area who live in poverty.

Ongoing fundraising saga for Flight 93 Memorial

This blog has given the fundraising folks at the Flight 93 National Memorial a hard time over the past year because they have raised less than half of the $30 million they need.

In January, we wrote about how they were blaming their consultants at Ketchum and fired them. In April, we profiled how the group had shifted to a direct mail approach. In August, we pointed out that there was more blame to go around.

Now today, I was stunned to hear this twist:

Apparently back in December of 2001, state Sen. Jane Orie had an idea to raise $10,000 by selling a thousand wristbands for $10 each. Within the first year the Hearts of Steel campaign had sold 100,000 wristbands and had raised $1,000,000!

In fact, federal rules forced the Hearts of Steel fund to close in 2003 and be placed in trust when it grew to $1 million.

Officials plan to announce Thursday that money from the campaign will be transferred to The Pittsburgh Foundation, a move that will free the fund from those regulations and allow money-raising to begin again for the construction of a Flight 93 memorial in Somerset County.

Holy cow. So, let me get this right... while the official group's fundraising has stalled as the fundraisers tried to figure out whether to take a major donor, corporate, or low dollar approach... the one idea that seems to have worked really well was stopped because of some technicalities almost 4 years ago - and is ONLY NOW being re-started??!?!

But why use The Pittsburgh Foundation? Why not transfer the bracelet money directly to the federal memorial account?

Flight 93 Memorial fundraising still slow

Kecia Bal at The Tribune-Democrat published an excellent article today on the fundraising challenges facing the Flight 93 National Memorial.

One might expect that, after five years of fundraising, more than $12 million would have been raised nationally.

Particularly since Shanksville became an American icon: The first symbolic counterstrike against the terrorists; the riveting cell phone calls from plane to home and vice versa; heroics that prevented a crash at the Capitol.

Some people have blamed the slow fundraising on the fact that Shanksville is in the middle of nowhere:

One challenge is that corporate donations are more likely to go to the memorials in the metropolitan areas, said Daniel Borochoff, president of the American Institute of Philanthropy, a Chicago-based charity watchdog group.

“It’s not as attractive from a marketing standpoint,” he said. “It’s not all about altruism. It’s about courting favor with the public and gaining publicity.”

But this blog previously reported in April of this year that fundraising trouble was brewing.

Officials involved in the memorial began in April a transition to let go of Ketchum Inc., a Pittsburgh agency retained two years ago to generate the $30 million.

The National Park Foundation, which is chartered by Congress to serve in a philanthropic role, is to take on new aspects of fundraising.

I recommend the entire article for more of a detailed analysis.

Six die at charity drag race

Six people, ages 15 to 22, died, and at least 23 others were injured when a drag racing car crashed during the “Cars for Kids” annual fundraiser in Selmer, Tennessee.

Four high-powered dragsters, including one driven by pro drag racer Troy Critchley, were scheduled for the show's popular "burnout exhibition" in which drivers spin their tires to make them heat up and smoke. Hundreds of spectators, unprotected by guard rails, lined both sides of a three-lane highway to watch the show.

Critchley was first off the line, but he lost control and crashed into spectators standing several rows deep in front of a fast-food restaurant.

Amateur video of the crash, broadcast on WMC-TV in Memphis, showed the car's engine revving loudly before the vehicle sped down the highway. After a few hundred feet, the smoking car skidded off the road and into the crowd.

Organizers say the event has been held in Selmer for 18 years. Cars for Kids holds several events throughout the nation and raises close to $200,000 per year for charities that help children in need, according to the charity's Web site.

The first month since the VA Tech shooting

It's been almost month since the shootings at Virginia Tech. We thought it would be interesting to revisit the topic of fundraising in the wake of the tragedy and to examine the progress of those fundraising efforts.

Within 8 days of the shootings, the Chronicle of Philanthropy reported:

The university' s new Hokie Spirit Memorial Fund — created the day after the shootings to pay for grief counseling, memorials, and other needs of victims' families and survivors — has raised more than $1-million, including an estimated 8,000 online donations totaling about $800,000, said Michael Kiser, the university's director of development communication.

In addition to the general fund, the school also created the Hokie Spirit Scholarship Fund to support students university-wide, in addition to specific funds in the name of each of the victims. (Check this for a list of funds that have been established in victims' names.)

The school has said that the final criteria for these funds will be dependent upon approval by each family. When I peeked at the secure donation form the school was using, I was a little confused by the list. It will be interesting to see how this fundraising tactic plays out.

It has also been interesting to see how student run websites like DonateVT.com were established immediately and have flourished in the past thirty days.

In fact, I am also curious how the ongoing unrestricted fundraising efforts by the school will be effected by this outpouring of special giving. The Hokie Athletic Club website says the school was already behind in total fundraising through February 2007, raising $15.7 million as compared to $19.6 million the same time last year.

International Katrina aid goes unclaimed

The Washington Post ran a troubling story Sunday about the extent of aid from international allies that went unused, spoiled, or uncollected after the hurricanes that hit the gulf in 2005.

Allies offered $854 million in cash and in oil that was to be sold for cash. But only $40 million has been used so far for disaster victims or reconstruction, according to U.S. officials and contractors. Most of the aid went uncollected, including $400 million worth of oil. Some offers were withdrawn or redirected to private groups such as the Red Cross. The rest has been delayed by red tape and bureaucratic limits on how it can be spent.

In addition, valuable supplies and services -- such as cellphone systems, medicine and cruise ships -- were delayed or declined because the government could not handle them. In some cases, supplies were wasted.

And if that doesn't seem shameful on its surface - the article also shares internal communications between government workers who struggled to explain why things failed.

In one exchange, State Department officials anguished over whether to tell Italy that its shipments of medicine, gauze and other medical supplies spoiled in the elements for weeks after Katrina's landfall on Aug. 29, 2005, and were destroyed. "Tell them we blew it," one disgusted official wrote. But she hedged: "The flip side is just to dispose of it and not come clean. I could be persuaded."

In another instance, the Department of Homeland Security accepted an offer from Greece on Sept. 3, 2005, to dispatch two cruise ships that could be used free as hotels or hospitals for displaced residents. The deal was rescinded Sept. 15 after it became clear a ship would not arrive before Oct. 10. The U.S. eventually paid $249 million to use Carnival Cruise Lines vessels.

I fear that the future responsibilities of managing these offers of in-kind contributions after the next major national incident have still not been adequately incorporated into disaster response plans.

Is "Flight 93" firing Ketchum?

Flight 93 National Memorial partners hired Ketchum two years ago to generate $30 million in private donations for the proposed landmark. Despite bringing retired Army Gen. Tommy Franks and former Pennsylvania governor Tom Ridge on as honorary national chairmen of the fund-raising campaign, the group's fundraising has not met some expectations.

This past Sunday, Kirk Swauger at The Tribune-Democrat reported:

Though officials have not outwardly derided Ketchum, there has been an undercurrent of dissatisfaction with the agency, which has raised $10 million in two years despite the national release of a Flight 93 movie, two cable television documentaries and the exposure that goes with them.

The Pittsburgh agency was paid a flat fee of $80,000. Now, just weeks before Ketchum’s contract is set to expire in February, the partners announced they have retained T.C. Benson study the ongoing fundraising efforts.

Benson will make suggestions after evaluating the partners' objectives, fundraising efforts and possible future opportunities.

A Ketchum representative, Jason Zajac, declined to speculate about whether his company will be retained when contacted by the Associated Press.

Similiar to the problems experienced at the World Trade Center site, the Flight 93 National Memorial finds itself behind on fundraising plans and facing larger than planned design costs. In September of 2005, the Flight 93 coalition unveiled plans for a memorial that was to cost between $30 million and $58 million to build.