AER among top charities for efficiency

Army Emergency Relief provided more than $252 million in assistance to more than a quarter million Soldiers and family members between 2003 and 2007.

The AER bills itself as "the Army's own emergency financial assistance organization." It assists Soldiers with interest-free loans, grants and tuition for family members. Money for the program comes from voluntary donations by Soldiers and civilians, and from investments made by AER.

In fact, each year, AER provides more aid to Soldiers than what was collected through donations - the remainder of the money comes from the dividends paid on investments made by AER.

"When people ask me what amount of the dollar they donate to AER is actually spent on Soldiers, I can tell them that, in 2007, we spent about $1.84 of that dollar on program costs," said Andrew Cohen, deputy director for finance and treasurer, AER.

AER maintains sufficient resources to invest [and] ensures there is always enough money to pay to Soldiers in need. At one point, the total value of AER investments peaked at about $297 million.

Today AER's investments are worth about $190 million. That money, Cohen said, is an insurance policy to ensure that AER always has the money it needs to help Soldiers were a major unforeseen crisis occur, such as a large mobilization.

"The investment capital represents the body of funds that has grown over the years from when AER ran surpluses," Cohen said. "That money is not just sitting there. It is earning a revenue stream, allowing us to operate over and above what we get from donations.

"It represents seed money and investments," Cohen continued. "And, that money can be used for anything, such as a mass casualty event where a lot of people need a lot of money. During the Gulf War, for instance, we went from $25 to $45 million of assistance in a matter of months."

Cohen pointed out that, while the investment capital is earning additional funds for AER, it is still available to help Soldiers when needed.

"It's not held in reserve - it's available for use," he said." Every Soldier who has a valid need has gotten assistance; so, the needs of our Soldiers are being met."
In fact, the AER's ability to manage its funds in a way that provides the most assistance to Soldiers has earned AER its third consecutive "4-star rating" from Charity
Navigator, for "its ability to efficiently manage and grow its finances."

Charity Navigator further stated: "Only 10 percent of the charities we've rated have received at least three consecutive 4-star evaluations, indicating that 'Army Emergency Relief consistently executes its mission in a fiscally responsible way and outperforms most other charities in America.'"

Unlike most charitable, non-profit organizations, AER clientele, Soldiers, have an income and the ability to repay their no-interest loans, which is, in turn, made available to other Soldiers.

"The bulk of financial assistance is traditionally for rent, mortgages, housing, personally-owned vehicle repair, or travel under emergency leave conditions," Cohen said. "For instance, a recruiter and his family might get stationed in Los Angeles. And, while he gets a basic allowance for housing, he might not have the money he needs for expensive rental deposits or start-up costs to move into a home there. That is where AER could help."

Another example, Cohen said, is a family renting a home where the landlord fails to make mortgage payments. That family could find the home is being foreclosed on by the bank.

"They might find they have a week to get out of the house and find a new place to live," Cohen said. "That's another case where AER could help out with emergency moving funds, in the form of an interest-free loan."

Last year, AER provided $83 million to 72,000 Soldiers and families. About 24 percent of that was in the form of tax-free grants and 76 percent was for interest-free loans.

Between Jan. 1, 2003, and Dec. 31, 2007, AER paid out a total of more than $252 million. The majority of that was in interest-free loans.

About $63 million - as reported in a recent story by the Associated Press - was given away in the form of grants for such things as tuition for qualifying family members, emergency travel for Soldiers who are in hardship situations for when their loved ones die, and for aid to widows and orphans of fallen Soldiers.

"Widows and orphans automatically get grants," Cohen said.

But, the bulk of money provided by AER is in the form of interest-free loans, Cohen said. And, of the loans given out, some 95 percent of Soldiers pay the money back.

"This is about Soldiers helping Soldiers," Cohen said. "If Soldiers know you need help to get through a financial bind, they're going to help - and again, they willingly
repay these no-interest loans so the money can help the next Soldier."