Charities: Haiti highlights charities’ crises

The utter devastation suffered by Haitian citizens after the 7.0 magnitude
earthquake that struck on 12 January rendered the biggest humanitarian response
ever recorded, reports claim. No ballpark figures yet exist, but several billion
pounds in individual donations combined with government gifts and a raft of
large celebrity cheque signings amassed unprecedented sums, all within days of
the event.

Getting it into the country in those first few days, though, proved
impossible. Most of Haiti’s infrastructure and banking system were out of
action; roads were decimated by mudslides or mountains of rubble from the
estimated 280,000 collapsed or badly damaged homes and commercial buildings. And
what use is a single dollar bill in a place where the markets, their suppliers
and the ports allowing essential imported goods in are destroyed – while their
proprietors may be among the estimated one million homeless, or the 530,000 dead
or injured?

In fact, due to the level of disturbance, the response from UK charities to
these challenges was quite literally to bundle up thousands of pounds and wire
it to Haiti through the neighbouring Dominican Republic. Vicky Annis, head of
finance at medical charity Merlin, explains that her team of 12 finance staff
had to do just that from its central London headquarters. “It has been quite
literally a case of three or four members of my finance team taking £3,000 in
cash down to our local Western Union several times a day,” she reveals. “It’s
enormously time consuming.” Merlin was one of the first charities that had no
previous business in Haiti to land there after the disaster.

David Membrey, acting chief executive at the Charity Finance Directors’
Group, confirms this has been practice elsewhere. “I know in the case of the
2004 tsunami that some charities, in the weeks after the event, were literally
sending staff out with rucksacks full of dollars,” he says. “The destruction was
so wide there that you could be on a project where there might not be a working
bank for a 100 miles. It’s not a long-term solution but it’s a practical one.”

James Steel, head of finance at faith-based charity Cafod, has to employ his
skills of persuasion and pull in help from around the business to cover sudden
need from finance. Cafod has a financial accounts team, a financial management
team and a humanitarian finance team, he explains, as well as donation
processing people to call on if it needs extra hands.

Charity FDs say they were not hit with the response for Haiti until between
72 hours and the first week after the event, once trustees and directors
(including the FDs) had decided on their level of response. “In early February,
while Haiti was going on, we had external auditors going through what
we’d done in Southern Sudan and Mozambique with a toothcomb. You’ve got to
balance that over the life of a response to something like Haiti,” he says. “It
brings a level of complexity into the organisation,” Steel says.

In and out

While the process of getting money in the door is now automated thanks to
online and text donations, FDs in even large charities found themselves
struggling to upscale dramatically in the first days after Haiti to get it out
again. It meant diverting finance staff from modest teams away from their usual
duties, diverting funds to hire temporary staff or persuading other managers to
get their non-finance volunteers mucking in. “This office was full of volunteers
processing credit cards on the weekend, because suddenly we had this massive
surge and we had no time to plan around it,” says Joe Ghandhi, head of finance
for Médicins Sans Frontières UK. “I was ringing our 0800 number first thing
every morning to test the response time and some of our country websites had
real bandwidth issues, so we had to switch things around.” MSF already had
around 800 staff in the field on a long-term programme.

Steel concurs. “In the 2004 tsunami appeal we couldn’t change the message on
our freephone donation number. It was Boxing Day and I was in the office trying
to change it, but we couldn’t get hold of anyone,” he says.

Charity FDs are learning valuable lessons around how to plan for these
problems that really hamper the increasingly common emergency responses they
have to make.

In other, ongoing ‘silent’ crises such as the conflict and mass displacement
of people in Jos, central Nigeria, or responding to the immediate needs and
longer-term rebuilding efforts in Sumatra after last September’s earthquake,
getting funds to disaster-struck communities on a regular basis proves
difficult, too – and is part of the FD’s remit.

Steel reveals how far down in the detail FDs mobilising resources can be.
“We’re making quite a big response in Jos and for that we had very immediate
spending needs. We decided on the Friday that we needed money to respond and it
got there on the Monday” – good going, given that getting money into rural
Nigeria is difficult and we work with a lot of individual clinics there, says
Steel. For Haiti, Cafod sent four people immediately, “but we were short on
dollars, borrowing them right, left and centre, making sure they’d got credit
cards: small things, but just making sure that they had what they needed.”

Informed response

Ghandhi highlights the communication skills needed from FDs in crisis
response. His finance function worked closely with its fundraising and press
departments on the Haiti appeal to stay informed about what campaigns were
running, as it has a direct impact on his mandate. “Because of that, finance
knew early that we had a fantastic response from the public so we then had to
shift quickly to asking donors to donate for our general programmes rather than
specifically for Haiti,” he says. This fulfils its other longer-term projects
and uses money wisely.

Keeping track of what is spent where, as well as building an overall plan to
rebuild communities is something the charity FD needs to balance. Steel says
that 72 hours after the Haiti earthquake his finance team were finalising areas
of responsibility for spending mechanisms and for setting a framework for
accountability.

“You need to establish mechanisms for receiving money, setting up outsourcers
which can be complex, then working out how all of it is going to get back into
your database and how it is going to be accounted for,” he says. “You’re sending
people to Darfur and you have to meet their pension and payroll needs.” Annis
designated an additional finance person to manage everything to do with Haiti
from the UK and assigned a specific code to all costs arising from the response,
to make accounting for it simpler.

“Now it’s about bringing in all our financial procedures and controls so we
can understand where we are for developing a full budget, having that reporting
on cashflow and having an idea on a weekly basis what cash is going to be
required in the field, and managing how we transfer the money on a much more
regular basis.” She adds: “We need to identify our Haiti spend against different
donor projects and split them down into project level, start reporting against
it and understanding where we are on our budgets.” Merlin will place a permanent
country FD in Haiti for the next six months to oversee this reporting process.

Ghandhi will need to finance the rebuilding of its three field hospitals, all
of which were badly damaged in the earthquake. “I have to talk with our central
team about how much we can spend over the next three years, say, to fix them –
so our campaigns have to match that amount.”
Against the backdrop of what corporate FDs have had to manage recently, the work
charity FDs have done to respond to Haiti and other disasters is impressive. “It
can be difficult to scale up in a very dramatic way – something that no one in a
sane world would do – but you just have to do it,” says Steel.
“There is the supply chain management, procurement is very difficult and there
is all the political stuff. We had a briefing in early February from someone wh
o just came back from Haiti and his message to us was, ‘why send tents when the
rainy season is coming, can’t we get into semi-permanent construction’. The
logistics of getting materials into the country with no infrastructure make that
absolutely impossible.”

At some point, though, they’ll just have to.

Charity FDs – what to watch out for

In regular contact with charities across the UK, the Charity Finance
Directors’ Group has the big picture view on how the sector responded to Haiti
and some chronic issues charity FDs face in disaster response. Acting CEO David
Membrey shares his observations and where he sees troublespots for FDs.

Logistics

“A good charity FD really understands the operational networks and logistics
of the charity better than anybody else. They should know what is where and they
should understand the systems that will tell them how many blankets they’ve got
at their depot in Wigan, for example. If they don’t, they should know where to
get it.”

Sector-wide collaboration

“If you don’t have a programme in Haiti you don’t have to set one up
overnight: you piggyback on somebody else. That happens a lot in the charity
sector as they all know each other and often get together, so they can share
resources. They can do more if they share resources than they can if they work
in isolation and there’s no point ordering the same thing for the same area.”

Disaster planning

I know of some charities trying to set up a network of warehouses and
facilities to house goods for emergency response across the world, rather than
mobilising stuff from, say, Europe to be flown to the Caribbean or Asia at a
moment’s notice. The next disaster of Haiti’s kind is not likely to be in
London, so why keep all your stores there? FDs of charities need to think about
this and I know they have done.”

Donors should listen to the FD’s funding decisions

“Donors to the 2004 tsunami wanted to see immediate results and it was
difficult for many charities to reconcile that with the need for long-term
planning. The fact that a lot of that money wasn’t spent after two or three
years was viewed negatively, but charities wanted to make a lasting difference,
to rebuild homes so they won’t fall down the next time. That is a very real
issue for FDs: they have to say, ‘no, at the moment the bank is the best place
for it’.”