Relief groups wait on millions pledged
Two months after Harvey, some firms have yet to make charitable payments
After Hurricane Harvey made landfall Aug. 25, major corporations such as Exxon Mobil Corp., Home Depot Inc. and Kellogg Co. announced big financial pledges to help the people of Texas and Louisiana feed their families and rebuild their homes.
Two months later, at least $76 million in pledges from companies, foundations and individuals still has not been delivered to the designated charities, a Houston Chronicle review found.
The Chronicle canvassed 18 charities that were among the major recipients of corporate pledges. Of those, nine — including United Way Worldwide and Mayor Sylvester Turner’s Hurricane Harvey Relief Fund — disclosed the amounts promised to them versus what they have actually received.
All told, those charities re-
ceived about $315 million in pledges — and are still waiting to see $76.8 million of the money, or about 24 percent.
The total of unfulfilled pledges is likely much larger than that figure suggests because many charities, including massive organizations like the American Red Cross and the Salvation Army, declined to reveal the amount of donations still outstanding.
Donors that have yet to deliver in full on their commitments include some of the biggest names in corporate America.
Google pledged $2 million to five charities, through a combination of company contributions and public giving. On Aug. 29 — the day a levee at Columbia Lake in Brazoria County was breached — Google published a plea on its online charity portal, saying that “with floodwaters continuing to rise, immediate action is needed.”
As of last week, three of the five charities — Save the Children, Habitat for Humanity International and Team Rubicon, a nonprofit that deploys military veterans to natural disasters — said they had not received donations from the tech giant.
The two other organizations — the Rebuild Texas Fund and the American Red Cross — did not provide information on the status of Google’s pledge.
A Google spokeswoman, Kayla Conti, said Friday that the company recognized “the importance of receiving critical funds in a timely manner, especially in times of crisis,” and was “on track to disburse funds through our trusted thirdparty partners.” Processing donations
Also on Aug. 29, eBay posted a news release on its website asking customers to give money to four separate Harvey relief charities and pledging to match donations up to a total of $250,000. The e-commerce company said it would donate an additional $100,000 to “relief efforts throughout the Gulf Coast.”
Two of the four designated charities, Team Rubicon and Save the Children, said they had not yet received money from eBay. Direct Relief, a nonprofit that distributes prescription medications, said it had received a partial payment. The fourth charity, the American Red Cross, declined to comment.
EBay told the Chronicle that it was working with the PayPal Giving Fund to ensure that the recipient groups were registered charities that “meet high standards of integrity.”
“Once vetted, eBay pays out each charity on a monthly basis,” the company said in a statement. “We anticipate that (the charities) will be paid out by the end of October.”
Pearson, an educational products and services company, started an internal fundraising effort Aug. 28. The company promised to match employee donations. The pledge is among hundreds included in a list of corporate commitments to Harvey relief published by the U.S. Chamber of Commerce Foundation.
Pearson told the Chronicle that the effort raised $150,000 for six charities.
Yet five of those charities — the Houston Food Bank, the United Way of Greater Houston, Save the Children, Feeding Texas and the DePelchin Children’s Center in Houston — said they could find no record of donations from Pearson.
Asked for comment, Pearson said that it had paid half the pledged amount and that the rest was on its way.
“Like many companies, Pearson uses a third-party vendor to manage our employee giving program and it takes time for that vendor to process and remit those donations to the charities,” company spokesman Scott Overland said by email. “To date, more than half of the donations have been remitted to the six designated charities and we expect the full amount to be paid by the end of November.”
Doug White, former director of the nonprofit management program at Columbia University in New York and now an adviser to donors, said the delay in converting corporate pledges to money in the bank was unacceptable.
“They take forever because it’s a bureaucracy,” he said. “It may be normal, but it is a tragedy … because people in Puerto Rico and in Florida and Texas and California all need boots on the ground and money now, and the corporate process doesn’t have the mindset to deal with that urgency.
“Corporations are not in the business of being charitable; they’re in the business of promoting themselves,” he said. “To say they’ve done ‘X’ for the charity checks that box, and to do something in follow-up is less urgent.” No hasty decisions
In all, more than $700 million has been pledged to major charities for Harvey relief, from all types of donors.
Individuals typically give immediately through online portals or texting campaigns. Corporations take longer because commitments may have to wait for board approval, or for the charity recipients to be vetted, or for the end of a monthly billing cycle.
Eugene Tempel, founding dean emeritus and professor at the Indiana University School of Philanthropy, said corporations are responsible to shareholders and have good reason to avoid making charitable donations in haste. But they can move faster, he said.
“You would think by the end of two months most organizations would have had a chance to get this put in place,” Tempel said.
Some major companies, including Exxon Mobil, Home Depot and Kellogg, have paid their pledged Harvey relief donations in full, according to the recipient charities.
Hearst Communications Inc., the Chronicle’s parent company, pledged $1.4 million to the Greater Houston Red Cross, through a $1 million corporate donation and a $400,000 match of employees’ $200,000 in donations.
The initial $1 million was sent to the Red Cross early last month, and the rest of the money had been delivered by mid-October, according to a Hearst spokesman. The company also gave $200,000 to the Southeast Texas Food Bank.
The impact of delayed pledges varies from one charity to the next. Larger organizations can draw on cash reserves to put food, clothing or cash in the hands of storm victims immediately. And some corporate gifts are designated for longer-term needs, such as rebuilding parks and schools.
But charities can be put in a bind when promised funding is slow to materialize.
The Houston Food Bank was promised $25.2 million for Harvey relief. The nonprofit purchased or leased forklifts, trucks, warehouse space and food, banking on the pledged donations to come through in time to pay the bills.
“It’s a reasonably educated leap of faith, but … it’s the biggest leap of faith we’ve ever done,” said Brian Greene, president and chief executive of the food bank.
At the beginning of this month, the organization was still waiting on $1.7 million in promised donations. Greene’s faith was eventually rewarded, however: As of this week, only $175,000 was still outstanding. Specific purposes
On Aug. 29, AT&T pledged a total of $350,000 to Harvey relief. Of that, $50,000 was promised to the Coastal Bend Community Foundation, a Corpus Christi group that makes grants to charities, school districts and local governments in the rural Gulf Coast area.
As of mid-October, the foundation had not gotten the money. On Oct. 18, the Chronicle called AT&T to ask about the pledge. Two days later, a $50,000 check from AT&T was hand-delivered to the foundation, according to its president and chief executive, Karen Selim.
A lag between pledge and payment can put a squeeze on small, local charities.
“We are able to make grants from what we get, period,” Selim said of her organization. “We’re not able to front it.”
Money is given to the foundation for specific purposes, she said, adding: “I can’t take scholarship money and move it to hurricane relief because that’s illegal, to be frank about it. … To use money that’s designated for a certain purpose for others, that’s the end of that charity.”
Fortunately, she said, the foundation had some money available for immediate post-Harvey needs, including emergency grants to four Gulf cities. Selim said the AT&T donation will be used for long-term recovery efforts, such as financial help for low-income families, veterans, the elderly and the disabled.
None of the charities contacted by the Chronicle said it had to withhold services because of delays in receiving donations.
Of the $76.8 million in outstanding pledges documented by the Chronicle, $48 million is owed to the Rebuild Texas Fund, created by the Michael and Susan Dell Foundation and the OneStar Foundation. The fund is focused largely on long-term rebuilding efforts benefiting children and other vulnerable groups.
Lori Fey, executive director of Rebuild Texas, said some of the donations have been delayed by corporate bureaucracy, but others are associated with multiyear grant agreements or were gifts of stock that need to be liquidated.
Team Rubicon, based in Los Angeles, tracks the money pledged to it for Harvey relief, along with the amounts received, on an online dashboard.
The display serves as a public scorecard on how well donors are carrying through on commitments. It shows pledges and actual payments in three categories — corporations, foundations and households. Households have paid all their pledges for Harvey relief. Foundations pledged $3.5 million and are within $400,000 of reaching that goal.
Corporations aren’t doing as well. Of approximately $4.3 million in outstanding pledges to Team Rubicon, $3.9 million — or 90 percent – was owed by corporations. Transparency critical
Matt Scott, deputy director of development operations for Team Rubicon, said the organization understands that corporate donors must vet charities carefully, and that some delay is unavoidable.
“It’s not problematic,” Scott said. “We think transparency is critical to disaster response, and though we would love to have funds released earlier, the fact that it allows for more accountability in the industry, that’s our preference.”
White, the former Columbia University program director, isn’t convinced. He said companies typically check out charities before announcing pledges. Although charitable groups are loath to complain publicly when donors are slow to deliver on pledges, it’s still a problem, he said.
“They’re not making headlines by accusing corporations of anything. But by the same token, the reality is, in a disaster situation time is of the essence,” White said.
“If the parents whose house has been blown away or had water neckhigh have to go to a shelter for food and wait in line with 4,000 other people, then we have issues — and that’s who’s getting hurt.”
“Corporations are not in the business of being charitable; they’re in the business of promoting themselves. To say they’ve done ‘X’ for the charity checks that box, and to do something in follow-up is less urgent.” Doug White, adviser to donors
Rob “Gator” Collett, front, a volunteer leader with Habitat for Humanity, hangs a door with the help of Dustin Maples, left, and Brian Thompkins in Houston. Habitat for Humanity is one of the three charities that hasn’t received donations pledged by Google.