Posted on February 28, 2006

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With Two-Thirds of Katrina Funds Spent, Many Challenges Remain, Survey Finds

Six months after Hurricane Katrina battered the Gulf Coast, charities and relief agencies have disbursed more than $2 billion of the almost $3.3 billion they raised for the storm's victims, leaving less than $1 billion to help hundreds of thousands of people rebuild their lives, the Washington Post reports.

According to a Post survey, two-thirds of the $3.27 billion raised by nonprofit organizations went to assist evacuees and other Katrina victims with immediate needs, including food, temporary shelter, medical care, tarps for damaged homes, and school supplies for displaced children. The survey revealed that the American Red Cross has distributed roughly 84 percent of its Katrina and Rita funds, with 50 cents of each donated dollar handed out in the form of emergency cash assistance. The survey also found that 56 percent of the donations that have not been spent are controlled by faith-based organizations, including Catholic Charities USA, the Salvation Army, the United Methodist Committee on Relief, and United Jewish Communities.

What remains to be done in New Orleans and the rest of the region goes well beyond the costs of rebuilding infrastructure, however, with some estimates putting the long-term tally at $200 billion, not all of which will come from the federal government. "There are many, many needs that the federal government cannot cover," said Don Powell, a former Federal Deposit Insurance Corp. chairman whom President Bush selected in November to coordinate the region's long-term recovery. Many of those needs involve "the crucial part of life that we all depend on," Powell added. "It's not public works. It's not water, sewage, or utilities. It's the soul of our life."

Unfortunately, the line between federal responsibility and what the private sector can and should do is blurred. Even though some Gulf Coast residents are eligible for federal assistance for replacement housing costs, many others don't qualify. And the law that governs federal spending after a disaster strictly limits how much can go to private entities such as places of worship, arts groups, mental health service providers, youth programs, and child-care centers, leaving many charities bracing for the hard decisions they will have to make as they spend what is left.

In an effort to confront these issues head on, the Baton Rouge Area Foundation has hired a team of planners and consultants at a cost of $15 million to devise a blueprint for development in southern Louisiana, a task normally undertaken by the Federal Emergency Management Agency. The foundation also is spending $1.2 million on consultants to map out a regional healthcare system. "We can do it, and we can do it much better" than the federal government, said BRAF president and CEO John Davies.

Salmon, Jacqueline. Smith, Leef. “Two-Thirds of Katrina Donations Exhausted.” Washington Post 2/27/06.

Primary Subject: Philanthropy and Voluntarism
Secondary Subject(s): Hurricane Relief
Location(s): Gulf Coast

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