Finances can be very tricky, especially for emergent grassroots relief groups and smaller community-based organizations that aren't set up to raise funds over the internet and aren't prepared to spent funds quickly and in transparent ways.
Organizations that can accept funds over the internet can raise thousands, even millions, of dollars during a disaster event. They can also solicit donations immediately and expand their community of donors.
Organziations that can document precisely where the funds they raised are being spent will be able to sustain fundraising efforts into the recovery phase and beyond. They can also develop effective funding criteria, enabling them to shape intiatives that emerge in response to the disaster.
Fundraising for disasters often begins immediately after they strike. The photos, video and narratives that emerge from the disaster compels a wide variety of people to give in a wide variety of ways.
- give immediately through their cell phone or a website.
- research various disaster relief groups and give to the group they find most compelling.
- give funds that will be spent in a specific way, such as through project-based fundraising or via gift registries.
It's important to have a process for engaging with all your group's donors because someone who has given once to your group is many many times more likely to give again than someone who has not.
Converting someone into a donor is a difficult challenge that, unfortunately, goes beyond doing amazing work that everyone wants to support. It requires building lists of potential donors, documenting your work, inviting people to give, and convincing them that the time to give is now!
Tracking the funds that flow into and through your group is essential for ensuring that money gets where it's supposed to go and that your group stays within legal compliance. Transparent accounting allows people within your group to confidently answer questions about how money is being allocated and spent, which can quell the hurt feelings and suspicion that arise when stakeholders feel like they're being left in the dark.
Bringing money into a groups or organization isn't always as easy as it may appear. Legally speaking, money needs to go to an entitiy - whether that's an individual or some other type of legal structure. There are tax implications for every choice.
A successful fund allocation process will be transparent and easy to navigate, and will enable those who recieve funds to use the allocation process to build their reputation and attract more resources going forward.
An unsuccessful process will be opaque and difficult to naviate, and groups will not want to broadcast that they recieved funds through the process.
You can also run into problems surrounding "donor intent" if you raise money saying it'll go to one thing and then spend it on something else. For example, if you say "all money we raise will be used for food and water" and then you spend it on plywood and sheetrock your might be violating laws governing nonprofits in your state - and the state attorney general could strip your organization of it's nonprofit status.
That's why it's very important to come up with a plan easy, describe it generally on any fundraising materials that you have (website, print materials, etc) and execute your plan faithfully.
Three types of fund allocation you might want to engage in are Emergency Funds for the immediate aftermath of the storm, Project Funds for the midterm relief effort and Community-Led Budgeting for the long term recovery.
Another popular (and highly institutional) allocation strategy is the development of an Unmet Needs Fund.