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Disaster Giving 5/30/2006 Heidi Frederick Research Development Specialist

Disaster Giving 5/30/2006 Heidi Frederick Research Development Specialist. The Center on Philanthropy at Indiana University. Largest, most comprehensive academic center devoted to increasing the understanding of philanthropy and improving its practice. Staff ~ 50 Faculty ~ 60

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Disaster Giving 5/30/2006 Heidi Frederick Research Development Specialist

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  1. Disaster Giving5/30/2006Heidi FrederickResearch Development Specialist

  2. The Center on Philanthropy at Indiana University • Largest, most comprehensive academic center devoted to increasing the understanding of philanthropy and improving its practice. • Staff ~ 50 • Faculty ~ 60 • The Fund Raising School faculty ~ 50 • Budget ~ $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.

  3. Overview • Magnitude of disaster relief giving • Who gives for disaster relief • Explore individual giving for disaster relief • How donations are made by individuals for disaster relief • Compare disaster relief giving to national giving • What to look for in giving to nonprofit organizations • Laws governing disaster relief giving

  4. Comparing Disaster Giving * ’05 Hurricanes’ data are preliminary, do not publish Source: Center on Philanthropy at Indiana University, 9/11 figures from Chronicle of Philanthropy

  5. Disaster Donations – 6 Month Timeline Source: Center on Philanthropy at Indiana University, Chronicle of Philanthropy figures for 9/11

  6. American Red Cross’Largest Donations to International Disasters(in Millions) Source: Associated Press and Center on Philanthropy at Indiana University

  7. American Red Cross’Donations to Domestic Disasters(in Millions) Source: Center on Philanthropy at Indiana University, American Red Cross, Chronicle of Philanthropy

  8. Gulf Coast HurricanesU.S. Private Contributions - Preliminary($ in Millions) TOTAL ESTIMATE: $5.3 billion Preliminary data do not publish: Source, Center on Philanthropy at Indiana University; The Foundation Center: Snapshot of philanthropy’s response to the Gulf Coast Hurricanes; US Chamber of Commerce, From Relief to Recovery

  9. September 11th GivingU.S. Private Contributions($ in Millions) TOTAL ESTIMATE: $2.8 billion Data: The Foundation Center: September 11 The Philanthropic Response

  10. Individual Giving for Katrina, Rita, and Wilma relief efforts • 63% gave money for hurricane relief in 2005 • 33% 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.

  11. Comparing Giving by Disasters-Individual Donations *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

  12. September 11th GivingAverage and Median Giving by Income Level Source: Center on Philanthropy at Indiana University

  13. How Donations Are Made Asian Tsunami-Preliminary Results – Do not publish Source: The Center on Philanthropy Panel Study, 2005.

  14. Effects of Disaster on Giving • 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.

  15. Effect of Disasters on Nonprofit Organizations • Based 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).

  16. National Averages - Of those households that made donations National 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

  17. United States Total2004 Contributions: $248.52 Billion by Sources of Giving Foundations$28.80 11.6% Corporations$12.004.8% Bequests$19.80 8.0% Individuals$187.92 75.6% Source: Giving USA Foundation – AAFRC Trust for Philanthropy/ Giving USA 2005

  18. 2004 Contributions: $248.52 Billion By Type of Recipient Internationalaffairs$5.342.1% Public-societybenefit$12.965.2% Environment/animals$7.613.1% Foundations$24.00 9.7% Arts, culture, and humanities$13.995.6% Unallocatedgiving $21.368.6% Religion $88.30 35.5% Humanservices $19.17 7.7% Health $21.958.8% Education$33.84 13.6% Source: Giving USA Foundation – AAFRC Trust for Philanthropy/ Giving USA 2005

  19. Total Giving As a Percentage of Gross Domestic Product, 1964-2004 2.2 2.1 2.1 2.0 1.8 1.8 1.7 1.7 1.7 Data are rounded. Source: Giving USA Foundation – AAFRC Trust for Philanthropy/ Giving USA 2005

  20. Giving As A Share of Personal and Disposable Personal Income 1964-2004 Source: Giving USA Foundation – AAFRC Trust for Philanthropy/ Giving USA 2005

  21. Organizations Receiving the Largest Amount of Private Support(2004, in Million) • United Way $3,884 • Salvation Army $1,546 • Feed the Children $888 • American Cancer Society $868 • AmeriCares Foundation $801 • YMCA $773 • Gifts In Kind Foundation $750 • Lutheran Services in America $723 • Fidelity Charitable Gift Fund $683 • Catholic Charities USA $581

  22. Organizations Receiving The Most Funds for the Gulf Coast Hurricanes Relief Efforts • American Red Cross $2.116 billion • Salvation Army $325 million • Catholic Charities USA $133 million • Bush-Clinton Katrina Fund $100 million • Habitat for Humanity $78 million

  23. The Number of 501(c)(3) Organizations Source: Giving USA Foundation – AAFRC Trust for Philanthropy/ Giving USA 2005

  24. The Number of 501(c)(3) Organizations • 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.

  25. What to Look for In Nonprofits • 4,000 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.

  26. The Law • Any 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 9/11 • Reason why many organization stopped requesting funding for the Tsunami • Your gift must be irrevocable in order to get a tax-deduction.

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