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When you give to Mercy Corps and Medical Teams International, where does your money go?
[April 23, 2011]

When you give to Mercy Corps and Medical Teams International, where does your money go?


Apr 21, 2011 (The Oregonian - McClatchy-Tribune Information Services via COMTEX) -- Few events move the heart and pocketbook like a natural disaster. After the earthquakes in Haiti and Japan, millions of dollars began flowing to two local nonprofits on the front lines of disaster relief: Mercy Corps and Medical Teams International.



But what exactly happens to the donations? How much goes to relief, how much to expenses? And what kind of relief? The answers are more complicated than you might think.

Both Portland-based Mercy Corps and Tigard-based Medical Teams are highly regarded, and both pride themselves on using as much money as possible on the people who need it.


"They're among the world's two leading and reputable international relief organizations," said Doug Stamm, chief executive officer of the Meyer Memorial Trust, which has given money to both.

The charities also shared numbers; transparency is a key indicator of a charity's reliability -- and the only real way to vet how an agency uses its money. The information is particularly relevant amid questions this week about how much money author Greg Mortenson's charity spent actually building schools in Afghanistan and Pakistan.

Liz Grant, head of the charities division at the Oregon attorney general's office, noted that the financial documents charities must file with the federal government provide general information, not details on every penny.

In Oregon, Grant said, nonprofits aren't required to open their books to the public or even audit their financials. But if they do audit, they're supposed to file the documents with the attorney general's office, where the public can gain access through a records request.

Charities such as Mercy Corps and Medical Teams do even better, providing everything from audited financial statements to executive salaries on their websites.

Also, within all the data is a wrinkle. Nonprofits typically count on-the-ground expenses -- salaries, lodging and meals, for example -- as relief work, not overhead; that can muddy breakdowns of just what percentage of donations goes into direct aid.

"It's standard practice and in accordance with generally accepted accounting principles for nonprofits," said Deborah Steinkopf, director of development and communications at the Nonprofit Association of Oregon. "Anybody who works at a nonprofit and is associated with delivering programs is considered part of 'services.'" To shed more light on their relief work, Mercy Corps and Medical Teams offered breakdowns on how they're spending contributions in Japan and Haiti.

Mercy Corps Broadly, Mercy Corps has two missions: economic development in Third World countries and providing relief after natural disasters.

Mercy Corps is still assessing needs in Japan, so how money will be spent there is a still-developing picture.

As of April 18, the agency had raised $8 million, setting aside $1.1 million for overhead. The rest is projected to be spent on economic recovery, emergency relief and psychological support for youths. Some money also will be used to cover operational costs such as staff salaries and lodging.

Counseling programs, said Joy Portella, a Mercy Corps communications director who recently spent about 10 days in Japan, will be invaluable because disasters cause stress, and rebuilding the country's infrastructure will take time.

"The Japanese do not usually embrace therapy," Portella said. "But we see a big need for this." Portella said it's particularly important because the Japanese government doesn't address psychological needs.

For a clearer picture of how Mercy Corps uses money, the agency outlined activities in Haiti, a Third World country with vastly different needs than modern Japan.

Through February, the agency raised $46.4 million -- about $28.8 million through federal and United Nations grants, and $17.6 million from foundations, corporations and individuals.

About $6.9 million, or 15 percent, was set aside for overhead costs. An additional $15 million has been spent on programs that have touched roughly 830,000 Haitians. Of that, presuming about 15 percent for overhead for total spending of about $17.6 million so far, costs break down as follows: -- $7.4 million, or 42 percent, on economic recovery programs such as distributing cash vouchers and jump-starting small businesses with grants or loans; -- $3 million, or 17 percent, on distributing emergency relief such as food; -- $2.1 million, or 12 percent, on water-sanitation and hygiene services; -- $1.4 million, or 8 percent, on in-the-field operational costs, including salaries and expenses for all staff during the first six weeks of the response; after that, the agency covers salaries but not living expenses; -- $900,000, or 5 percent, for emotional support for traumatized children; -- $100,000, or 1 percent, on agricultural programs to help subsistence farmers, among others; -- $100,000, or 1 percent, on energy-saving initiatives, such as cooking technologies, to improve quality of life.

The remaining $24.5 million will stay in the nonprofit's bank account for Haiti relief; the interest will be used for worldwide operations.

Medical Teams Medical Teams International is a Christian-based humanitarian aid group that develops health care programs in the Third World and provides emergency relief in disaster areas.

Unlike Mercy Corps, it has no economic development programs and relies more heavily on in-kind gifts such as medical supplies and volunteer doctors.

As of April 19, Medical Teams had raised about $497,000 for Japan relief and plans to use about $20,000, or 4 percent, for administrative and fundraising costs. The rest will go to program services.

So far, the agency has spent $39,000 on relief supplies and expenses such as plane tickets and cell phones for volunteers. The rest is in a money market account; accrued interest will go toward overhead.

For Haiti, Medical Teams had raised about $5.2 million in cash as of March 31 and spent about $2.5 million, helping more than 392,000 people. The remainder is in a money market account, also generating interest.

In addition, the nonprofit had raised about $9.3 million in in-kind gifts, such as medicines and supplies donated by pharmaceutical companies and hospitals.

-- Of the cash that has been spent, about $96,000, or about 4 percent, went to overhead.

-- $540,000, or about 22 percent, went to salaries and health benefits for on-the-ground personnel.

-- $315,000, or about 13 percent, went to grants and cash to local partners, such as clinics giving vaccinations, treating cholera and providing general surgery.

-- $650,000, or 26 percent, went to operating supplies, medicine that can't be donated and equipment; -- $495,000, or 20 percent, was spent on general costs such as communications, vehicles and legal/registration fees; -- $253,000, or 10 percent, went to the agency's Haiti Advantage Program, which provides prosthetics and other care to the disabled; $77,000 of this goes to program personnel.

-- $142,000, or 6 percent, paid for other costs at headquarters, including hiring part-time support staff. These funds came from a grant specifically designated for that purpose.

Medical Teams requires staff based in Haiti to pay for their own living expenses.

D.K. Row To see more of The Oregonian, or to subscribe the newspaper, go to http://www.oregonian.com. Copyright (c) 2011, The Oregonian, Portland, Ore.

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