Where Most Needed

Katrina giving is back in the news with the release of a Conference Board survey of 5,000 households about their giving relating to Katrina, the same households used for the monthly Consumer Confidence Survey.  The New York Times report suggest that the survey disproves "donor fatigue," falling in line with earlier reports from the Washington Post and Chronicle of Philanthropy.  But the survey results in fact tell us that one in ten donors admitted diverting their Katrina donations from other causes.  (Somewhat in line with an earlier report from the UK suggesting that 20% of tsunami contributions were reallocations rather than net new money.) 

Curiously, Stephanie Strom's report in the Times even quotes a United Way official in Kansas who saw a 9.8% drop in donations this year—but attibutes it to other causes.  It is not clear why there is such strong aversion by the press to the idea that at least some Katrina funding was diverted from other causes.  It would be more convincing if these "no impact" reports were from closer to the impact area, like Memphis, Birmingham, Houston, or Atlanta. 

But more significantly, the Conference Board survey provides some perspective on the generosity of Americans in the wake of an unprecedented catastrophe.  The giving was less than spectacular in either breadth or depth.  A quarter of the respondents reported no charitable giving at all in 2005.  Twenty eight percent gave to charities, but not Katrina.  Of the 47% that reported Katrina donations, 2/3 (or 32% of all respondents) gave less than $100.  Of the rest, 13% gave $100 to $499 and 3% reported giving over $500. 

And even that may be overstated. 

We projected the survey responses over the 2004 estimate of 112 million households in the US and found that the survey reponses imply far more giving than charities reported receiving.  Even if all the giving was at the absolute low end of each range, the projected total Katrina giving based on survey responses is $3.7 billion, which exceeds the widely reported figure of $3.2 billion in giving (or $3.6 billion according to the Conference Board release), and the reported figure includes non-household corporate giving that some estimated as high as $1 billion. 

An even better projection would be based on estimated average giving in each range.  This strongly depends on the average for the "over $500" givers.  If the average "over $500" gift was near the low end, say $2,000, it implies a total of $10 billion.  If it is higher, say $7,000 (and it could be, knowing that Boone Pickens, for one, reportedly gave $7 million), the total projected from the survey response becomes $25 billion—again, compared to actual reported giving of $3.2 or $3.6 billion.  All of this is to say that quite a few people seem to be exaggerating their contributions, or perhaps that the Conference Board household survey is biased toward relatively affluent households.