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How Charitable Clients And Foundations Can Help Ukraine

March 23, 2022

The humanitarian crisis in Ukraine is heart-wrenching and complex. In many respects, it’s similar to a natural disaster but it also poses distinct challenges that require both immediate and long-term support.

Philanthropists, especially those with private foundations, are able to help in more agile and flexible ways that others cannot. Not only can they respond rapidly when a crisis occurs, they can also take a longer view to understand the full scope of the problem(s), pinpoint where they can make the greatest impact, and determine how to allocate their resources most effectively to boost established relief efforts and/or spawn new ones.

The following offers guidance for your charitable clients to support Ukraine now and in the difficult years ahead.

Providing Immediate Help
As the circumstances in Ukraine are fluid and will likely escalate in both scale and urgency, the exact degree of support required is unknown. The following are broad types of humanitarian aid that is often issued to populations in urgent need:
• Health and medical support
• Shelter, water, food, sanitation, hygiene and other essentials
• Clothing and non-food items
• Time-critical support for both internally displaced and refugee populations
• Protection for people in conflict zones
• Special services for elderly, disabled, ill, impoverished and other vulnerable populations
• Replacing suspended education and income

Donations of cash are repeatedly cited as the most effective way for donors and private foundations to provide such support because they afford charitable agencies maximum flexibility to direct funds to the areas of greatest need. (Donating items such as clothing and medical supplies requires shipping, receipt and management of goods and materials, and may hinder response efforts.)

Private foundations may also provide funding through a unique capability permitted by the IRS in times of emergency: Rather than following the usual procedure of making grants to charities, they can make them directly to individuals and families in need without obtaining prior IRS approval.

Screening Charities
A list of nonprofit organizations that support Ukraine relief efforts is easy to find online. Before clients support a charity, though, for any cause, counsel them to ask the following:
• Is the organization well-established and reputable? What is its history?
• Does it have a clear mission?
• Does it meet a vital need?
• How sound is its stated approach?
• Are its values congruent with my own?
• Are its services and programs unique?
• Who sits on its board?
• Does it achieve substantial results? What does it report about them?

Additionally, have clients check the organization’s rating from one or several “watchdog” sites. These resources apply a uniform set of standards to analyze and grade the financial and programmatic quality of nonprofits. Some of the more well-known sites include Give Well, Charity Navigator, Better Business Bureau Wise Giving Alliance, and The American Institute of Philanthropy.

Delivering Long-Term Support: The Disaster Life Cycle
Crisis and disaster response happens in several stages. By distributing funds and support across the “disaster life cycle,” your clients may be able to achieve greater impact with their resources and reduce the likelihood of recurrence while also aligning their response with their values and giving priorities.

The Center for Disaster Philanthropy cites the following four stages of responding to critical situations:
• Response and Relief. The reactive time during or immediately following an emergency. Often with a focus on saving lives, preventing further damage and providing basic human services. This stage typically draw the most attention from the media and the most funding.

• Reconstruction and Recovery. The strategic period after damage has been assessed, including longer-term efforts to restore a community or country to pre-disaster state. This work typically begins after the event no longer dominates the news cycle and is often more expensive than relief. It also is often overlooked and underfunded by public charities, private philanthropists and insurance companies.

• Preparedness. Another strategic phase, involving detailed plans that will help people and areas respond effectively to disasters or crises. Activities may include planning exercises, training and educating volunteers, identifying evacuation routes and partners, stocking food, water and other basic necessities.

• Mitigation. More strategic work designed to cure factors leading or contributing to emergencies and limit the impact of similar events in the future. This stage requires hazard risk analysis and the investment of time and resources to build resilience and reduce risk. Activities may include strengthening existing infrastructure and developing redundant processes.

Devising A Crisis Response

In determining how best to respond to a disaster or crisis, advise your clients to do the following:

• Understand their motivation. What about the crisis speaks to them? Is there a stage in the disaster life cycle that would benefit greatly from their personal network or professional strengths? There are numerous ways to connect a client’s philanthropic mission to the needs that arise in emergency situations.

• Do their research. This includes staying abreast of current affairs as well as looking to past disasters and similar situations for guidance and lessons that can help them construct a high-impact response.

• Be aware of scams. Many new nonprofits are formed in response to disasters, and while some are legitimate, unfortunately others are not. Evaluate new organizations carefully before making a commitment.

• Consider equity. Disasters and crises have the potential to magnify inequities. There may be marginalized, vulnerable or under-resourced populations that will feel the crisis more acutely and may have difficulty accessing essential services.

• Partner with other funders. Exchange insights and best practices with other philanthropists. In the process they may find collaborators with similar or complementary goals that will allow them to develop a more innovative or comprehensive response.

During this critical time for Ukraine, as well as during other crises, encourage your charitable clients to address both immediate and long-term need when they provide support.

Davis & Hodgdon CPAs(link is external) is a full-service public accounting firm with the unique ability to offer tax planning, financial and investment planning, and client accounting services under the umbrella of and as a wholly owned subsidiary of the Davis & Hodgdon Advisory Group, a business and financial services firm with locations in Williston and Rutland Vermont. The firm serves its clients by providing progressive, proactive services through expert staff, high-end technology, and unparalleled efficiency.

Resource: Financial Advisor Magazine - Helping Ukraine: How Charitable Clients And Foundations Can Take Action