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Where Do The Millions Go In Disaster Relief? [UPDATE]

Money
Scott Olson

When people donate money to help in the relief efforts we are left with the feeling that we have helped out in some small way. However, the question that remains is: “Where Do Those Millions Go?”

When disaster strikes, many charitable organizations and emergency relief agencies answer the call to aid in relief efforts to rebuild communities. In May, tornadoes created a wave of destruction in several communities in the state of Oklahoma.

Organizations such as the Salvation Army and The Red Cross come to mind when hearing about disasters. The one thing to understand is these efforts can take time and money to get a community back on its feet. Each organization has it’s own approach for aiding in relief efforts.

First the Salvation Army, according to their website; 83 cents of every dollar donated goes to “helping the homeless, the mentally ill, the physically challenged, victims of drug and alcohol abuse.” The website also states that when a donation is made towards a disaster “100% of the donation goes towards disaster victims.”

The Salvation Army raised $12 million for relief efforts for the May tornadoes. Four million was used for immediate relief efforts such as food, water and clothing.

What of the other $8 million dollars? The organization states that the remaining $8 million is currently being used for long-term recovery assistance. The Salvation Army estimates that recovery services are expected to continue for the next two years.

In November 2013, The Red Cross released a six-month report of the current status of the Oklahoma tornadoes that hit the state in May. The report states that the organization has received “approximately $51 million in donations and have spent or have made commitments to spend $35.9 million.”

Of that $35.9 million the report indicates that 37% of the money has went to individual recovery planning, 22% for immediate casework and assistance and 15% for emergency food, shelter and relief items. Another 15% of the funds went to individual and community resilience. Medical services and assistance took up 4% of the funds and another 4% went to school preparedness and recovery.The remaining 3% was put towards rebuilding the community.

According to the Red Cross website and the six-month report, an average of 91 cents per dollar donated is used for relief efforts. The remaining 9 cents is used for general operations.

With that in mind of the $51 million, approximately $4.59 million is being used for general operations for the disaster relief organization with the formula stated from the Red Cross website.

However, while doing the math on how much was being used for general operations, an interesting find was discovered. If a person donates a dollar and 91 cents go towards disaster relief, then donating two dollars would mean $1.82 is going towards these efforts. When you multiply 0.91 with $51 million you get $46.41 million. By taking the $4.59 that should be used for general operations and adding the $46.41 million you get $51 million.

Now the $46.41 million is the 91 cents of every dollar donated while the $4.59 million is the remaining 9 cents. Take the $35.9 million that is stated in the report with the $46.41 million and you get $10.51 million that was not stated in the report.

Has the $10.5 million not been committed for use yet? Was it put towards general operation costs? Was it put towards future use for the state of Oklahoma or other disasters in the the country?

UPDATE: Red Cross Senior Financial Director Tamara Pratt has got into contact with us and stated the following:

“We are waiting for the communities to help us decide how (the $10.5 million) needs to be spent, because the idea behind long term recovery is helping those communities and those residents in those communities get back on their feet. They don’t even know what they need yet or what they will be needing as we are only six months into the process.”

Pratt also stated that people are still coming to Red Cross facilities seeking assistance from the May tornadoes.

“We are not putting a time from on long-term recovery, we are going to be there for as long as the community needs us,” Pratt said.

An article will be released later in the week that fully details the American Red Cross long-term recovery plan.

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