The Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988 (Stafford Act) governs how our country responds to disasters. While the Stafford Act provides an important and necessary foundation for coordinated national response to disasters, a number of shortcomings and deficiencies have been identified over the years. By understanding the Act’s pitfalls and gaps, donors can make strategic decisions in allocating private dollars toward disaster preparedness, response, and recovery.

Broken into seven titles, the Stafford Act establishes a federal process for declaring disasters, determining the appropriate level of response, and dividing up the costs among federal, state, and local governments. In addition to providing federal assistance programs to deal with economic losses resulting from disasters, the Act articulates the need for state and local governments to create comprehensive disaster preparedness plans and mechanisms to prepare for intergovernmental coordination during times of crisis.

The aftermath of Hurricane Katrina exposed organizational deficiencies of the Federal Emergency Management Agency (FEMA) and, as a result, the agency has been widely criticized for a slow and inadequate response. FEMA’s failures after Katrina largely reflect failures of the Stafford Act. Understanding the Act’s limitations can help funders make better decisions.

Key Facts

  • There are two types of incident levels: emergencies and major disasters. Emergencies usually are smaller events in which a limited federal role is sufficient, while major disasters are usually larger scale events, such as a powerful hurricane or earthquake. Only the President can declare an event an emergency or a major disaster. For example, President Barack Obama declared the Ohio flooding in May 2011 as a major disaster, while the severe storms in Alabama around the same time of year were declared as an emergency.

Limitation: The Act does categorize catastrophic events, such as major earthquakes or hurricanes, or 21st century threats, such as nuclear attacks or accidents. Without this distinction, there is no special response for catastrophes.

  • The governor of the state in which a major event has occurred determines whether or not its state has the resources to handle the disaster. If that governor decides the state does not have the ability to handle the response, he or she must then ask the President for help, and let the President know exactly what resources the state is able to commit. The President then decides whether to declare a major disaster and directs the assistance as he or she sees fit. A similar process takes place for emergencies.

Limitation: Disaster declarations and resource—allocation decisions are made at the federal and state level, and therefore are not always based on the specific area affected. Money is also required to pass through a myriad of federal agencies. As a result, payments often do not reach the affected community for up to a year after the disaster.

  • In the wake of a disaster, the federal government provides assistance to state and local governments. Assistance includes food, clothing, shelter, and the repair of physical damage resulting from a disaster. For major disasters, long—term recovery loans to state and local governments designed to reimburse lost tax revenue are capped at $5 million, while loans to individual small businesses are capped at $1.5 million.

Limitation: This level of assistance is sufficient for most disasters but not catastrophic events, such as Hurricane Katrina or the attacks on September 11, 2001.

  • The President instructs federal agencies to provide states disaster preparedness and mitigation assistance. Federal agencies provide technical assistance to states to help them prepare for disasters and administer grants for the purpose of creating or updating emergency plans. However, state and local governments often lack the staff capacity and planning resources necessary for effective mitigation.

Limitation: Providing funding for mitigation projects in communities without the underlying capacity to leverage these dollars does not help prevent future catastrophes.

How You Can Help

The Stafford Act does not adequately address long—term recovery needs following a disaster. This is where private dollars become critically important. Donors can employ the following strategies to complement existing federal assistance programs:

  • Support recovery. In order to increase the effectiveness of long—term recovery, the shortcomings of the Stafford Act must be addressed. Philanthropists can use their convening power to organize donor consortiums to advocate for legislative reform of the Stafford Act and ensure FEMA delivers a long—term recovery framework.
  • Help affected individuals and households receive case management and mental health services. Current federal funding for case management programs is insufficient and does not meet the needs of disaster victims. Donors can fill this gap and support long—term recovery by funding humanitarian organizations providing case management and mental health services to disaster survivors and workers.
  • Provide small businesses expedited loans and grants. Small businesses are critical in a community’s recovery process. The current $1.5 million cap on loans for recovery is not enough, and provision of loans is often too slow. In order to rapidly and effectively stimulate recovery, donors can provide recovery grants and microloans to offset immediate costs for small businesses.

In the years to come, the U.S. will certainly confront the devastation of additional natural disasters, and may well have to respond to man—made catastrophes like the 9/11 attacks. The donor community can play a vital role in disaster response not just by filling funding gaps, but also by advocating for Stafford Act reform that will put in place the remedies and safeguards required to confront the disasters of the future.

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