A discussion with Meloni Hallock, CPA/PFS, Ernst and Young LLP. Ms. Hallock has been Red Cross volunteer for six years serving as Chapter Treasurer, Chairman of Volunteers and as a member of the Executive committee and Board of Directors at her local Los Angeles Red Cross chapter.
Question: What role can CPAs play in disaster recovery and planning?
Meloni Hallock: CPAs in general can provide one-on-one, direct financial planning advice to a person affected by disaster and help them through the process of recovery as well as proactive planning for the future. People affected by disaster deal not only with emotional and physical issues but also financial consequences that arise as a result of a disaster. The financial planning guidance CPAs offer people affected by disaster can complement the other efforts by the American Red Cross in helping the individual get their life back in order. The disaster recovery guide outlines the process that a person affected by disaster goes through in easy-to-understand language. It also provides a roadmap for the steps CPAs will take bringing order to the recovery process.
Question: How can CPAs get involved with the American Red Cross to help out with disaster recovery?
Meloni Hallock: The process is pretty simple—CPAs should contact their local American Red Cross chapter and ask to volunteer their services to people affected by disaster. Usually the call will be handled by someone responsible for Volunteer Management or Disaster Services.
The chapter will ask them to fill out a simple volunteer application that will give the local chapter the CPA's contact information and identify those areas in which the CPA is willing to provide assistance. Some chapters make their volunteer applications available online, while others may ask the CPA to call and perhaps come to their offices to fill out the information. The really great thing about this process is that there are so many local American Red Cross chapters across the U.S. that CPAs won't have to travel too far to participate—they can become involved within their own local communities and possibly working with community and civic leaders.
Question: How important is it for CPAs to volunteer their services to the American Red Cross prior to a disaster occurring?
Meloni Hallock: It is important that CPAs establish relationships with their local American Red Cross chapters as soon as possible because no one knows when a disaster will strike—disasters happen all the time, whether a fire or death or something larger like a flood or earthquake, and the need for CPA financial planning services are needed in all types of disaster. Everybody is often scrambling once disaster strikes and volunteer lists are critical at that point. In order to ensure their services are best utilized in these situations, CPAs should establish some sort of working relationship with their local American Red Cross chapter right away. Our profession has an opportunity here to expand upon its mission to protect the public interest—disaster recovery and contingency planning are key to protecting the public well-being.
Question: What kind of commitment is required of CPAs once they become involved with their American Red Cross chapters?
Meloni Hallock: Having worked as a volunteer with the American Red Cross for the past six years, I have found that CPAs can provide as much time as they want and work with as many people affected by disaster as they are willing. There is no requirement—it is merely based on the amount of time to which each CPA can commit. The American Red Cross appreciates any amount of time a CPA can provide. This year alone, the American Red Cross has provided disaster relief for more than 550,000 families—roughly the population of Denver, Colorado in a year that called for more than 250 large-scale disaster responses. The majority of American Red Cross disaster relief consists of responses to local Red Cross chapters to over 60,000 single-family home fires. CPAs clearly could play an important role in advising these families affected by home fires.
Question: Are there any benefits to CPAs in becoming involved with the American Red Cross and its disaster recovery and planning efforts?
Meloni Hallock: The main benefit for any volunteer of course is the personal satisfaction they experience from making a positive contribution to their community. A significant portion of the CPA community already volunteers its time to some kind of charity, community or non-profit organization, so volunteering with the American Red Cross to help out in a CPA's area of expertise is a natural fit. This kind of volunteer work often builds or strengthens ties to community and civic leaders for CPAs. It also helps demonstrate at a grassroots level what it is CPAs actually do as trusted advisors.
Question: What has your experience been as an American Red Cross volunteer in disaster recovery and planning?
Meloni Hallock: It's actually been quite delightful because I've learned about the wide range of services that the American Red Cross provides every day in communities across the country. There is a fair amount of misperception in the community about what the American Red Cross does—many people tend to think that the American Red Cross is restricted to blood drives and handing out coffee to people affected by a disaster. But what really amazed me was not only the variety of the things that the organization does, but that it is a leading humanitarian organization supported by a vast volunteer network and funds primarily donated by private citizens, not the government.
Although the American Red Cross is not a government agency, its authority to provide disaster relief was formalized when, in 1905, the Red Cross was chartered by Congress to "carry on a system of national and international relief in time of peace and apply the same in mitigating the suffering caused by pestilence, famine, fire, floods and other great national calamities, and to devise and carry on measures for preventing the same." The Charter is not only a grant of power, but also an imposition of duties and obligations to the nation, to disaster victims, and to the people who generously support its work with their donations.
I really think CPAs can make a positive contribution to this mission, and the disaster recovery guide is a powerful tool CPAs can help out during times of disaster.
Question: Have CPAs traditionally provided disaster planning and recovery services?
Meloni Hallock: I think many of us as CPAs have dealt with some form of disaster recovery or planning when clients have experienced personal disasters, ranging from the unexpected death of a family member to a big casualty loss as a result of a natural disaster like flood or earthquake. I think many CPAs have helped people affected by a disaster at some point in their careers and therefore this type of volunteer work is a natural fit for CPAs.
Question: Why should the public turn to a CPA for advice in time of disaster?
Meloni Hallock: CPAs are seen as trusted and independent third parties—we don't have products to sell—and we therefore give objective advice on how to best navigate financial decisions in times of disaster, whether it's negotiating a contract on having your house rebuilt after a fire or dealing with the insurance company and the settlement money. The CPA is adept at analyzing the possible solutions and making objective recommendations so that people affected by disaster can minimize the financial impact of that disaster and get on with rebuilding their lives. Each disaster scenario is different and personal—CPAs are able to work out solutions without being burdened by things like emotional or grieving issues when people affected by disaster are most vulnerable.
Question: Why did the AICPA partner with the National Endowment for Financial Education (NEFE) and the American Red Cross on the disaster recovery guide?
Meloni Hallock: The guide was developed because a need was seen for a resource to help individuals and families during a time when they were most in need and often vulnerable to financial challenges following a disaster. Previously, there were no comprehensive, authoritative, easy-to-use resources for people affected by disasters. NEFE joined the project because the foundation has worked with the American Red Cross since 1995 to provide the public with personal finance information related to disaster prevention and recovery. The AICPA became involved because in its role to help protect the public interest, thousands of its CPA members provide personal financial planning services as part of their accounting and tax expertise. The guide is offered as a public service of the AICPA, AICPA Foundation, American Red Cross and NEFE.
As such, CPAs are uniquely qualified to work with disaster victims to help them solve financial issues in times of crisis. The American Red Cross became involved to help fulfill its mission of providing relief and assistance to victims of disaster. Through its nationwide network of local chapters, the American Red Cross is able to get this valuable resource to a broad community of those who may need it. The guide was a perfect fit for all three organizations because they are all working towards to same goals for disaster recovery and protecting the public.
Question: What is the most important point for CPAs to know about the disaster recovery guide?
Meloni Hallock: The guide is a comprehensive, 32-page booklet organized into three sections: Part I defines the steps to take immediately following a disaster, such as restoring household stability, managing an injury or disability and financial decisions after death; Part II identifies steps to take in the weeks and months after disaster has occurred to help people affected by disaster try to settle into a more normal routine by establishing a steady flow of income, handling expenses and debt, and working through potential lawsuits or other settlements; Part III illustrates the steps to take in planning for the future and moving on with life in areas such as assessing financial needs, getting retrained for a job, and estate planning.
The disaster guide is an easy-to-read, quick reference for people affected by a disaster and provides a checklist of things that they should or need to consider. The guide’s real strength is the way it is laid out as it follows the natural cycle of a person affected by disaster.
Question: What specific financial planning role do you see CPAs playing with clients before and after disaster strikes?
Meloni Hallock: This disaster recover guide has a section on disaster preparedness that I think is a really good idea. CPAs can provide this kind of proactive disaster planning to their current clients prior to any disaster occurring. That's what makes the guide a great resource to give to clients in advance of anything happening to make them aware of the process that people go through when dealing with a disaster. Even if we haven't been personally affected by a disaster, we know of people, relatives, friends or work colleagues who have. Because disasters are pretty random, the best thing the public can do is be prepared for one, and CPAs can use this guide to help people plan and prepare in that respect. After a disaster strikes, the guide outlines all the various ways a CPA can help people minimize the financial damage of a disaster.
Question: What will the relationship be between the CPA and the American Red Cross? How will they work together when the next disaster occurs?
Meloni Hallock: As long as CPAs are on a list of volunteers, they will be called by a representative of their local American Red Cross chapter requesting their help with people affected by the disaster. Depending on the type of work for which the CPA volunteers, they could be called on to provide a wide range of assistance, from providing temporary housing and working at an aid station to providing individual guidance on post disaster-related financial issues. CPAs can determine what type of aid they can provide when they fill out their volunteer applications with the American Red Cross.
Question: Why was the American Red Cross asked to distribute the disaster recovery guide to the public?
Meloni Hallock: The American Red Cross has a large network of local chapters nationwide and is generally the first to respond at time of disaster to the needs of people affected, no matter how small or large the disaster. They are first on the scene to help in recovery for affected families and also have strong ties to local communities and their leaders. These factors made the American Red Cross the logical choice as a partner in the disaster recovery guide effort.
People often think of a disaster as being a huge natural event that affects thousands of people, such as an earthquake or a flood, or a tragedy such as a airplane crash. The fact is the most frequent disaster to which the American Red Cross responds is a single family home fire—they respond to tens of thousands of those a year in the U.S. A single-family home fire may not be a large-scale disaster on the national or even regional or state level, but for that family, it is a major disaster. I work with a local American Red Cross chapter in Los Angeles, and of the 553 disasters to which we responded last year, 525 of those were single-family home fires. Those families are in need of the whole range of American Red Cross services and counseling, and the guide, along with assistance from local CPAs, help make the transition back to a normal life a reality.
Question: How can CPAs or the public get a copy of the disaster guide?
Provided as a public service by the American Red Cross, Disaster Recovery: A Guide to Financial Issues
is provided free of charge
directly to people affected by disasters. The guide
may also be downloaded free of charge.