FEMA’s Expansion Threatens Charitable Competition
By Mary Theroux • Thursday September 25, 2008 5:14 PM PDT • 4 Comments
In 2003, in the aftermath of 9/11, the Federal Emergency Management Agency (FEMA) was placed under the Department of Homeland Security. The disastrous aftermath of Hurricane Katrina two years later marked the first test of the new FEMA, and there is widespread agreement that the agency utterly failed. Much of the tragedy following Katrina was exacerbated by or would not have occurred at all had FEMA not displayed gross incompetence, in stark contrast with private, voluntary efforts. I have detailed these differences and their implications in “Public and Private Responses to Katrina, What Can We Learn?”, and further insight is provided in “The Long Road Back: Signal Noise in the Post-Katrina Context,” by Emily Chamlee-Wright (The Independent Review, Fall 2007).
Of course, precious few government agencies are ever shut down for failure—each is instead almost always, and generally significantly, expanded. In the case of FEMA, the extent and danger of this expansion is only now coming to light, in the aftermath of the first significant hurricanes since Katrina, Gustav and Ike this year. Apparently, since private charities have been repeatedly shown to be so effective, FEMA has now chosen to avoid the embarrassment and simply eliminate the competition. Unlike Katrina, which was a media bonanza, FEMA took inordinate control of media access following Gustav and Ike, greatly diminishing awareness among Americans of the true extent of the aid needed in the affected areas. In fact, significant aid is needed and is being provided by the traditional responders to such disasters such as The Salvation Army and Red Cross. Yet the viability of these agencies—which have been efficiently and effectively providing disaster relief since the 19th century—is now threatened by FEMA’s deliberate move to de-fund those life-saving private charities that have been so effective through the establishment of its own agency, the Aidmatrix Foundation, to intercept disaster relief contributions from private donors and divert them to government efforts.
The Salvation Army first became aware of these efforts during the Republican National Convention, when word came that Cindy McCain and Laura Bush were going to make a joint appeal for donations for hurricane relief. Salvation Army personnel quickly made calls to make sure the Salvation Army would be among the agencies listed, and received assurances it would be. During the event however, the screen behind Mrs. McCain and Mrs. Bush during their appeal, directed concerned viewers wanting to assist hurricane victims instead to Aidmatrix’s toll-free phone number, four state government websites (www.servealabama.gov; www.floridadisasterfund.org; www.mississippirelief.com; and www.texasresponds.org), and Aidmatrix’s own website. Each of these state websites in turn links to Aidmatrix’s site for making contributions.
The Aidmatrix Foundation was created by FEMA, and FEMA and 27 states have in turn signed a Memorandum of Understanding with Aidmatrix, designating it as the approved solicitor for disaster relief contributions. While claiming that Aidmatrix only targets “unaffiliated” donors, in practice, Aidmatrix has broken the traditional link between private donors and private charity, by diverting those seeking to provide contributions in aid of victims of natural disasters to FEMA’s Aidmatrix site.
The flow of money out of Aidmatrix is completely intransparent, and will, by definition, be determined politically by inside interest groups. In the case of the aforementioned Gustav appeal, for example, websites for the four states ruled by Republican governors were displayed on the convention’s screens; relief for the one state ruled by a Democrat—Louisiana—was referred directly to Aidmatrix’s site. And the resulting influx of funds can only provide attendant political benefits to those Republican governors.
And thus, the politicization of charitable disaster relief.
Meanwhile, the impact to The Salvation Army and others has been dramatic:
- The Salvation Army received $399 million in private contributions for the relief it provided following Katrina
- It has received $1/2 million following Ike.
The Red Cross has been similarly severely impacted, and last week asked Congress for $150 million in emergency funding to replenish its disaster relief reserves. Paul C. Light, a professor of nonprofit groups and the federal bureaucracy at New York University, warns that by so doing the Red Cross risks blurring its status as an independent charity, resulting in its being seen as a quasi-governmental organization. Light further predicts that “if the Red Cross takes federal money, it will effectively become a ‘de facto arm of the federal government,’ which could make donors skeptical and less likely to contribute.”
As experience has shown time and again, government money drives out private money, and government agencies drive out competing private agencies. People quickly and easily forget that things used to be different, and it will soon be commonplace to accept that, “of course,” it’s the federal government’s responsibility to provide disaster relief, just as it’s allegedly responsible for bailing out investment banks.
The displacement of committed, experienced and proven-effective voluntary disaster responders with unaccountable, expensive and proven-incompetent bureaucrats bodes ill. FEMA’s power grab of the disaster relief sector will predictably result in many more Congressional investigations into FEMA’s future failures, and the cry for greater and greater amounts of taxpayer money to achieve results falling farther and farther short of those historically provided by the Red Cross, The Salvation Army, and countless other voluntary associations and charities.
Tags: Bailouts, Charity, Elections, Fascism, Insurance, Monopoly and Antitrust, Politics, Privatization, Religion, The State, Urban Issues 
Hi Mary,
I discussed your column with a friend from Houston who’s just been through the hurricanes firsthand.
She replied with a few points I wanted to pass on.
” Local media provided information about different options for volunteering and donations. This not only included the national organizations but also local food banks, blood banks and many other local service organizations... I personally did some research on the Red Cross and the dire need for funding – it is not due to this storm. They are in need of additional funding because they have had so many disaster events this year (excerpt below). I have attached the information that I received from the local Red Cross office:
‘The Red Cross has responded to more than 60 large-scale disasters this year. We are still involved in a massive feeding response in Louisiana, where we have served more than 1,000,000 meals and snacks. This year has seen a record number of tornadoes, the worst flooding in the Midwest in 15 years, an early wildfire season and a very active hurricane season that is far from over. On top of that, we also responded to thousands of “silent disasters” such as small house and apartment fires.’ ”
So do you know if the Red Cross donations are down similarly to the Salvation Army donations? Because their literature states they need funding due to the high number of disasters they’ve responded to.
And did the Salvation Army get the same amount of coverage during Ike? While I’m not comfortable with Aidmatrix at all and am a huge advocate of private sector non-profit, maybe it was competition for air time by lots of non-profits that affected donations as well?
Cheers,
Paula
Paula Cassin | Oct 20, 2008 | Reply
Thanks for your comment, Paula.
First of all, it’s not surprising that the local media would correctly cover the range of responders and their activities — they have a vested interest in delivering information that’s actually valuable to their local market. However, the majority of disaster-relief donations come in response to broader, national media coverage, which media, for the first time this year, are receiving their information primarily from FEMA. The Salvation Army’s spokesman, Major George Hood, explained: “It was impossible to get our 800 number and our Web address on the news, when historically we’d have had that on all the networks. This year, they would not list nongovernmental phone and Web addresses, a new policy this hurricane season. This is breaking down our ability to communicate with the heart of the American public.” (http://philanthropy.com/news/updates/index.php?id=5813)
As background, in the aftermath of the largely-government-caused Katrina-response fiasco, Congress held hearings. In its typical blame-the-victim pattern, Congress decided the best fix for FEMA’s having failed abysmally to direct relief to Katrina’s victims would be to make FEMA the lead responder for all future natural disasters — in the place of the Red Cross, which had previously been contracted by the federal government as the primary response agency.
In the aftermath of this year’s hurricanes, FEMA was thus the lead provider of information for the media, and FEMA designated its newly-created AidMatrix as *the* agency of record for donations. I’m not sure if you’ve noticed in years past, that the major networks and others would run a whole slew of relief agency names, with contact 800 #s and websites in a continuous loop on their newscasts. This year, they *only* listed AidMatrix.
And, if you Search on YouTube for hurricane Ike relief, for example, you’ll see CNN’s 15-minute homage to FEMA, with nary a mention of any private agencies. It’s a piece worthy of Soviet propaganda at its height.
Finally, no, this year has not seen particularly unusual levels of disasters — very average, or even below-average. The piece your friend received from the Red Cross is likely the pitch they opted to use as more likely to elicit giving, rather than saying they haven’t been able to raise as much money as in years past. Again, see the above-referenced story in The Chronicle of Philanthropy for their explanation of their funding shortfall to the professional philanthropic community.
As a footnote, Congress granted $100 million of the $150 million the Red Cross asked for — all part and parcel of the $700 billion+ “Bailout” Christmas-tree bill that Congress continues to decorate daily.
If you go to the YouTube video of Laura Bush and Cindy McCain issuing their “appeal” at the Republican National Convention, note the Orwellian reference directing donations to the “charities” listed on the screen behind them — government agencies all.
This blurring of public vs. private sectors, in combination with the massive diversion of private money to government agencies, promises to deliver us all to the mercy of DMV-quality disaster relief services. I for one quake at the thought.
Mary Theroux | Oct 21, 2008 | Reply
Thanks for that clarification, Mary.
It’s just so discouraging, isn’t it!? What can one do? I love the work you all do at the Independent Institute, but it’s a voice calling out into a great void at times. We seem to be in such a minority right now, with Congress and the Executive encroaching on private enterprise and non-profit enterprise with little effective resistance.
Cheers
Paula
Paula Cassin | Oct 21, 2008 | Reply