Cash Donations Key in Japan Relief Efforts

Companies in the United States and elsewhere are chomping at the bit, ready to provide assistance to Japan's earthquake and tsunami victims. But despite that can-do, must-do, gotta-do-now mentality, experts says the best thing companies can do for now is just send cash -- not products or services.

And hard currency donations have been arriving for Japan. According to Gerald McSwiggan, senior manager of the Disaster Assistance Recovery Program for the U.S. Chamber of Commerce's Business Civic Leadership Center, in just two business days companies have donated $41 million in cash to non-profit organizations.Those numbers put Japan earthquake and tsunami relief efforts on track to rival the $150 million donated for the Haiti earthquake relief efforts last year.

Let the First Responders Work

Cash is often the best primary form of donation in relief efforts, as the details of a disaster unfold. Governments and non-profit groups are then able to assess where non-monetary donations are needed, experts said on Monday during the Chamber's leadership center's press conference.

"So far, we have received many sympathies from around the world," said Sachio Muto, 1st Secretary with the Japanese Embassy in the U.S. "We are currently handling those offers of donations. One possibility is for [businesses] to go to the American Red Cross Web site, where there is an option to donate money, or another possibility is to go to USAID for their activities."

USAID, the United States Agency for International Development, links to InterAction's list of recognized non-profits involved in the Japan earthquake and tsunami relief efforts. Rebecca Gustafson, USAID's press officer, says it's important for companies to allow first responders like emergency medical teams to do the work needed to save lives, rather than get in the way with good intentions.

Giving the Right Assistance at the Right Time

USAID, for example, will work with governments to bring them the resources they request, when they request it. Gustafson notes the organization did not supply urban search and rescue teams until Japan made the request.

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"We want to make sure that the right assistance is given at the right time," she said, steering companies to consider touching base with the Center for International Disaster Information (CIDI), which matches the services and products a company has to offer with the needs of a country undergoing a catastrophe.

New Hampshire-based C&S Wholesale Grocers, for example, has donated $10,000 to the American Red Cross to help earthquake and tsunami victims in Japan. But the grocer has also pledged to supply food, water and supplies if needed, The company is also on the International Red Cross "call list," according to the Business Civic Leadership Center's corporate-aid tracker. That database allows companies to post the relief efforts they are providing to Japan's earthquake and tsunami victims.

Matching Resources to Needs

Some companies, however, are able to move quickly in determining which of their products or services can aid in relief efforts. McSwiggan offers Microsoft as an example.

"It depends on how good their relationship is with non-profits and government officials who are on the ground," he says. "Microsoft has a lot of good relationships with NGOs [non-governmental organizations], so in major disasters, they know what they're doing and will often give free software and free technical support to governments and international NGOs, without getting in the way of crucial operations."

Microsoft (MSFT) has committed $250,000 in cash and roughly $1.75 million in software and in-kind contributions, according to the corporate-aid tracker.

Giving for Different Reasons

Other companies that have ponied up for the Japan relief efforts include insurance giant Aflac (AFL), which has 5,000 employees in Japan, and donated $1.2 million to the International Red Cross. General Electric (GE) chipped in with a $5 million donation, Goldman Sachs (GS) with $6.1 million, Bank of America (BAC) $1.2 million to the American Red Cross and Google (GOOG) with a $250,000 donation on top of its CEO Eric Schmidt's personal donation of up to $100,000, under a matching donation challenge for Citizen Effect.

"U.S. companies give for a number of different reasons," says McSwiggan. "Some companies have markets in an affected area, or employees. If a company has operations there, they may give out of a sense that it's part of the family. A number of companies have operations in Japan."

Over the past decade, however, companies have shown a willingness to donate relief efforts in regions where they don't have operations, or that aren't their target markets. The Indian Ocean tsunami relief efforts in 2004 received the second-highest level of donations for a natural disaster, racking up $273 million, according to McSwiggan. The Haiti earthquake followed in third place at $150 million.

"Most companies don't have operations or employees in either country, but there was a sense of wanting to do the right thing," McSwiggan says.

In the case of Hurricane Katrina, however, donations to support the storm-affected areas in the U.S. topped the charts, reaching $650 million in donations.

Creative Ways for Small Businesses to Donate

And not all these donations come from Fortune 500 companies. McSwiggan notes even small and medium-sized businesses, which often do not have an on-going relationship with international non-profit groups, can still play a philanthropic role even if their finances are tight -- which is often the case for mom-and-pop businesses.

"There are lots of ways to get involved outside of cutting a big check," he says. "A lot of retail stores will set up a payment system where a customer donates $1 to a charity when making a payment. A store can do a matching donation, or if their resources are limited, they could consider a 25 cent match. Another thing they could do is put up signs about texting donations they can make to NGOs. Small and medium sized businesses need to a little more creative."

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