Fundraising and the Asian tsunami

By Jackie Randles

This article was published in Living Ethics: issue 59 autumn 2005

The tsunami appeal raises many ethical issues, not least accountability and transparency, writes Jackie Randles.

Like millions of people around the world, I spent days after the Boxing Day tsunami glued to the radio, both horrified at the scale of the disaster and transfixed by stories from people describing what they had experienced. Frequently moved by extraordinary tales of loss and survival, I wished I had useful skills that could have helped in some practical way.

Many others entertained fantasies about physically doing something to help. While some impulsively gathered up all kinds of stuff to send to the survivors – blankets, winter clothes, household goods, much of which turned out to be totally useless – others offered to volunteer both at home and abroad.

Aid agency websites had to contend with scores of would-be volunteers lacking specialist skills, who in their eagerness to ‘do something’ had perhaps not considered that presenting for duty without the specific experience and expertise required in a disaster zone could be a hindrance rather than help. Volunteers, after all, must be fed, housed and accommodated alongside the homeless and displaced, putting further pressure on limited resources when food, water and medicines are already scarce.

Donating to charity was one way of doing something useful in the face of adversity. But to which charity would I donate? With each running separate campaigns, it was difficult to decide. When you make a donation, you trust a charity to be reputable and accountable, and to ensure that your money reaches the people who need it most as quickly as possible.

In many ways it is a leap of faith. In collectively written press statements, CEOs of major charities assured the Australian public that strict systems are in place to ensure that all funds are vigorously tracked, from the moment the donations are received to the moment they are spent in the affected areas. Most agencies committed to spending no more that 10% of funds raised to cover costs.

Overall, Australians feel proud of their tsunami effort. The largest agencies are reported to have secured $243 million of the $260 million worth of donations raised in Australia. However, of this amount, their combined administrative costs on the tsunami appeal will soak up $21.2 million – almost 9% of total funds raised.

A recent Age survey of aid agency expenditure indicated that the timeframe for aid distribution may extend to ten years. Keen to counter public perception that not enough is being done, the major charities have continued to issue careful statements about their progress so far and their commitment to transparency and accountability.

Don D’Cruz of the Institute of Public Affairs is just one individual who says charities are too vague in disclosing financial reports. He argues that agencies have a duty to repay the public's trust by telling us exactly how and when they plan to spend the money. Expenses like accommodation, travel and wages for staff are legitimate costs associated with the delivery of aid that cannot be avoided. That such costs are described as ‘project costs’ rather than ‘administrative costs’; and therefore may be in excess of the blanket 10% allocated towards expenses is a bone of contention for Don D’Cruz. He says that by embedding these costs in projects, agencies are fudging the issue. World Vision CEO, Tim Costello, argues that it is reasonable to allocate such costs to projects:

You can't deliver aid, if you think about it for a moment, without actually someone being there, receiving it and unloading it. People like to say there should be volunteers doing all of that, but, in an emergency you can't do that. You have to have people who know what they are doing, and who are trained.

Considering the number of ‘partner organisations’ that are contracted by charities to work in affected countries, who presumably incur further overheads, questions persist about how much aid money is spent before it reaches people on the ground. Public perception that aid is spent properly is everything. So when news emerges about funds being set aside for long-term projects aimed at economic recovery and infrastructure rebuilding as we continue to hear about forgotten communities who are yet to see one cent of international aid, public confidence in the process can be shaken.

In contrast, first-hand accounts from individuals returned from tsunami-affected regions about tremendous local efforts made on a small scale tend to inspire confidence that aid delivered directly from one community to another avoids cumbersome red tape and actually meets its target more effectively.

The proliferation of local fundraising initiatives established between communities all over the world with groups of tsunami survivors, usually set up by people who have direct contact with someone in an affected community, reflects a desire to deliver cash and goods directly from people to people. These kinds of initiatives provide donating communities with a sense of involvement and perhaps give people a stronger sense of having made a contribution than an anonymous donation to a large charity would.

But they still beg questions about how funds are allocated equitably and what processes are in place to ensure accountability. And while many small-scale, local efforts continue to provide relief throughout tsunami-affected regions, ad hoc initiatives that make a real difference to some people won't reduce the need for ongoing, large-scale aid that is coordinated by professional agencies with experience and expertise in providing disaster relief.

The fickle nature of mass concern

Perhaps because the tsunami affected so many first-world tourists on holiday (it could have been me), the intense level of media interest crystallised the hearts and minds of the public in a way that other tragedies do not. How often do natural disasters and issues of preventable disease and famine in third-world countries win such international and consistent media attention?

Writing in the The Sydney Morning Herald, Simon Chapman, Professor of Public Health at the University of Sydney, observed that:

... the Asian tragedy has again illustrated the fickle but predictable nature of mass concern. The earthquake in Bam, Iran on Boxing Day 2003 killed 41,000 and left 75,000 homeless. The Darfur crisis in Sudan had killed 70,000 by last October. There were no tourists caught up in either disaster, and the rich world's philanthropy squibbed miserably.

Meanwhile, Matthew Moore, the Fairfax correspondent in Jakarta, reports that fierce competition between donating governments to secure responsibility for prestigious infrastructure projects, such as building schools and roads, is frustrating the Indonesian minister responsible for the huge international aid effort promised for Aceh. Moore says the chairman of the National Planning Agency, Sri Mulyani Indrawati is concerned by the persistent lack of co-ordination and agreement on how to spend funds. She has called on donor countries, including Australia, to put more of their aid money through the Indonesian budget instead of insisting that their donations and programs be kept separate.

While acknowledging that many donors want to keep control of their own money because of Indonesia's notorious corruption, Dr Indrawati is said to fear that the world will judge the reconstruction efforts harshly:

I wonder how history will judge us a year or five years from now. Will the newspaper stories be full of how money was wasted as donors competed against each other for the best projects, and the Government failed to co-ordinate or lead the effort? Or will they record how together we introduced a new way of doing business, in which we work in harmony?*

When the Australian Government pledged $1 billion worth of emergency aid funds to Indonesia, it became the world's most generous post-tsunami donor at the time. These funds, however, were allocated on the condition that they go to a new body the Government plans to run jointly with Indonesia, and only on condition that the money be kept outside the Indonesian budget. While a sense of pride may prevail about Australia's generosity and selflessness, we must not lose sight of the complex ethical questions around aid, sovereignty and where we set to gain from our aid efforts.