This study analyzes the relationship between natural disasters and donations to non-profit organizations in disaster-affected regions. Using regression analysis, this study seeks to determine the relationship based on various factors including the number of deaths, total number of people affected, the economic damage costs, and media coverage of a given disaster. The purpose of this study is to examine whether disaster-affected regions truly receive increased donations following a natural disaster, the sources of these donations (government grants versus private donations), the question of whether donations are diverted away from other non-profits in industries not related to relief efforts, the longevity of donation increases following a natural disaster, and disaster-related factors that have a significant and material effect on donations to non-profits. Data sources utilized in this study include the National Center for Charitable Statistics (NCCS), EM-DAT: The International Disaster Database, U.S. Bureau of Labor Statistics, and Google News, all analyzed from 2000 through 2006.
Findings from this study indicate that the occurrence of a natural disaster in a given state generates an increase in donations to non-profit organizations, and hurricanes specifically, cause a greater increase in donations than other types of natural disasters. The increased levels of donations seen by non-profits were found to be sustained for two years following the occurrence of a disaster. Government grants actually decrease following the occurrence of a natural disaster, while public donations increase, indicating an inverse relationship. When considering specific factors that measure the destruction of a natural disaster, media coverage relative to state population elicits the greatest increase in donations among all factors measured. The study finds no evidence that donations to non-profit organizations operating in humanitarian-related industries experience increased donations following the occurrence of a natural disaster.
Recommended CitationMcKenzie, Megan, "The Effects of Natural Disasters on Donations to Non-profits" (2011). Honors Projects in Finance. Paper 18.