Puerto Rico Is Rarely on Philanthropy’s Radar. Could a New Plan Change That?

More than 80 officials — many of them from big foundations — gathered in New York today to consider how philanthropy might help Puerto Rico’s recovery from last year’s hurricanes, an effort projected to cost nearly $100 billion.

For many of the organizations represented, any significant investment in the island will be their first. Puerto Rico has attracted only a trickle of support from institutional philanthropy in recent years, despite an economic crisis and government bankruptcy that rival the emergencies that brought billions of grant-maker dollars to Detroit.

U.S. foundations directed only about $29 million to the island from 2011 through 2015, according to a Chronicle analysis of grant data published by the Foundation Center. During those five years, Detroit secured $1.2 billion in such aid from grant makers. The Chronicle arrived at those figures by adding up grants with a geographic focus.

“We are not on their radar,” says Nelson Colón, president of the Puerto Rico Community Foundation, who is scheduled to speak at today’s meeting.

The damage caused by Hurricanes Irma and Maria brought new support to the island, but the dollars pale in comparison with what philanthropy poured into the Gulf region and Florida following last year’s storms. Corporate and other grant makers contributed $341 million to Hurricane Harvey relief efforts in the first six months after the storm, according to the Center for Disaster Philanthropy and the Foundation Center. Maria relief, meanwhile, attracted only about one sixth of that, or $62 million.

Also today, a commission of Puerto Rican civic, community, and business leaders released a report recommending how to use private and public recovery funds. Called “ReImagine Puerto Rico,” it addresses public schools, the electrical grid, housing, economic development, health, and more.

Commission members developed the plan after scores of meetings across the island as a road map that might guide and even accelerate work by federal and local officials, private investors, and the nonprofit and philanthropy worlds. In the short term, they hope to inform and influence the recovery plan that the Puerto Rican government will submit to Congress soon.

Commission members suggested the disaster funds, if used smartly, could help the island tackle longstanding deep poverty and other issues. Malu Blázquez Arsuaga, executive director of the commission, said before the report’s release: “We are not just talking about how to prepare Puerto Rico for the next hurricane but how to change its trajectory so that it’s a better place to live for its citizens.”

Though public funds are expected to cover the bulk of work, several sets of “ReImagine” recommendations specifically suggest philanthropy could help pay the cost.

“It is critical in this moment in time that a variety of players rally around this and identify some things to get going,” says Xavier de Souza Briggs, an executive with the Ford Foundation, which supported the report’s preparation along with the Open Society and Rockefeller foundations.

Those three organizations have played some role on the island but now say they are stepping up their work.

Source: Foundation Center and Center for Disaster Philanthropy

Note: Includes contributions through April 2018

Katrina Parallels

Today’s meeting, convened by the Federal Reserve Bank of New York and Hispanics in Philanthropy, is billed as a “philanthropic-efforts information session.” The agenda focuses on Puerto Rico and the U.S. Virgin Islands; both regions, which are in the New York district of the Federal Reserve, were hit hard by last year’s storms. Among those attending: officials from federal agencies, community-development organizations, private foundations, and financial institutions.

Many see Puerto Rico’s recovery as a challenge similar to what faced New Orleans after Hurricane Katrina in 2005. Before the storms, both regions were marked by high poverty and old infrastructure, and the immediate federal response to both disasters was generally seen as weak.

Philanthropy played a key role in post-Katrina recovery in New Orleans. A coalition of local, regional, and national grant makers that includes JPMorgan Chase and the Ford, Kellogg, Kresge, and Walton Family foundations contributed nearly $570 million to that city’s recovery in the decade following the disaster. Total institutional giving was considerably more, with additional millions coming from Rockefeller and others.

Foundation officials helped local leaders develop the recovery strategies that gave donors confidence that money would be put to good use. They also helped create entities such as the Louisiana Disaster Recovery Foundation (now the Foundation for Louisiana) to coordinate work and the flow of money.

Early after Katrina, “no one seemed to know who was doing what and how it cohered into a strategic recovery effort,” the ReImagine report notes.

Big Money Lining Up

Commitments by some foundation and corporate supporters have sparked hope that philanthropy can step up big in Puerto Rico. Ford, Open Society, and Rockefeller announced just months after the hurricane that they would put $5 million toward the recovery. Among other work, they are supporting the commission that prepared the recovery recommendations released today.

They are also backing local nonprofits — including the Network of Puerto Rico Foundations, a key intermediary — and helping groups and residents pursue federal funds.

Other recent pledges of support:

• The Open Society Foundations has committed $20 million over five years. One of the goals is to help local groups as well as organizations on the U.S. mainland pressure Congress on funding and policy issues, says Karina Claudio Betancourt of the foundation.

“This is a crisis ultimately of the relationship between Puerto Rico and the United States,” she says.

• The JPB Foundation — the philanthropy of Barbara Picower, widow of Jeffry Picower, a Wall Street investor involved in the Bernie Madoff investment scandal — has contributed $3 million to recovery. Google.org, meanwhile, has pledged $2 million and aims to double that through a matching campaign scheduled to close today. It’s focused on economic recovery.
• Last month, AbbVie, a global biopharmaceutical company with operations in Puerto Rico, promised $50 million to both Direct Relief and Habitat for Humanity International. Habitat is rebuilding housing on the island, while Direct Relief will support community health centers.
• Puerto Rican entrepreneur Ric Elías, founder of the South Carolina-based Red Ventures, a marketing and technology company, announced a $100 million fund to train Puerto Ricans in the United States to lead businesses on the island.

“We’re hearing about foundations who are quite involved and still committing significant sums of money,” says Robert Ottenhoff, president of the Center for Disaster Philanthropy.

Still, he says it’s not clear whether philanthropy will coalesce as it did after Katrina. “It’s a little too early to tell if they will stay committed with significant resources for as long a period as they did in New Orleans.”

‘Disaster Fatigue’

The recent history of institutional giving to the island doesn’t offer much encouragement. The $62 million philanthropic response to Hurricane Maria was about half what flowed to Mexico following earthquakes there last year.

“Disaster fatigue” could have dampened giving to Puerto Rico, Ottenhoff says. Last year saw 16 weather-related disasters in which damage estimates reached or topped $1 billion. The total cost was a record $306 billion, eclipsing the $215 billion storm-inflicted damage from 2005, when Katrina hit, according to the National Oceanic and Atmospheric Administration.

Maria followed the bulk of the 2017 budget-busting storms and hit while Americans were still reeling from Hurricanes Harvey in Houston and Irma in Florida. Also diverting attention from the island: a devastating earthquake in central Mexico, which struck the day before Maria made landfall in Puerto Rico. “By the time we got to Maria and Puerto Rico, you already had a media world that was oversaturated and a philanthropic world with lots of demands,” Ottenhoff says.

The storm’s impact may also have been underestimated. The official death toll from the storm stood at 64 until Harvard researchers last month said the number topped 4,600.

Disaster of a Different Kind

Even before Maria, however, Puerto Rico had been battered by a disaster of a different kind: a decade-long economic contraction. More than 40 percent of the island was living in poverty. In May 2017, just before the storms, the island’s government had sought a form of bankruptcy relief. Its debt and pension obligations totaled about $123 billion; Detroit, by contrast, had carried $18 billion in debt into its 2013 bankruptcy.

Despite this economic crisis, U.S.-based foundations did relatively little to help. That’s in part because the island “is seen as foreign,” says Ana Marie Argilagos, president of Hispanics in Philanthropy. “The domestic funders don’t want to fund it. Yet the international funders say, ‘No, this is an American territory.’ So it belongs to no one.”

Janice Petrovich, executive director of the Network of Puerto Rico Foundations, worked with other island philanthropic leaders to lobby national foundations for help during the economic crisis. They targeted grant makers who had committed significant funds to Detroit and New Orleans with little result. “Frankly, we were hitting the wall,” she says. “We were told things like, ‘We don’t fund crisis.’ "

Briggs of the Ford Foundations says Ford, Kellogg, and some other national philanthropies worked in Puerto Rico on issues of civil rights and racial equity and inclusion. But they often didn’t see the entry points to work on the island’s broader issues.

Ford’s initial investments in the Network of Puerto Rico Foundations and other groups are changing that equation, he says. The goal is not simply to rebuild but to make the island stronger and address some of its inequities.

“Things have gotten so bad and so urgent that to talk about business as usual is literally absurd,” he says.