Chapter 3: Assessing the Economic Damage¶

On May 22, 2011, an EF-5 tornado, the strongest on the scale, tears through the south of Joplin, a city in Missouri. It cuts a path about a mile wide. It kills 161 people and demolishes 8,000 buildings, a third of the city. Among them are 530 workplaces.

In the week that follows, the staff of the regional chamber of commerce go out into the streets. They walk from one destroyed business to the next to find the owners, comfort them, and tell them one thing: the chamber will organize help to restart. They go around the destroyed area again every day. Within three weeks, they have spoken to all 530 employers.

Many of these owners are too shell-shocked to say whether they will stay or leave. They have no plans to share. But, notes the practitioners' handbook that tells the story, they appreciate the effort: knowing that they are not alone, that someone cares and that someone is leading a recovery plan makes them more willing to rebuild. The chamber then opens a one-stop shop for businesses in its own offices. It invites the government agencies that handle disaster assistance. It helps business owners put together their loan applications, and it steers them away from financial products they do not need.

Two years after the tornado, about 449 of these businesses, or 85%, have reopened.

A chamber of commerce is a network of business leaders who know their town. So is your club.

What the scene teaches¶

The Joplin episode upsets a common assumption: assessing economic damage does not start with a spreadsheet. It starts with being there. The chamber's staff did not yet know what each business had lost. They knew who these 530 employers were, where to find them, and how to talk to them. The numbers came later.

Three lessons follow for your club.

First: an area's economy is made of people you can count. A stricken town does not have "an affected economy." It has bakers, mechanics, women selling vegetables, fishermen, sewing workshops, employees and day laborers. Each has lost something specific, and each will make a specific decision: reopen, wait or leave. Assessing means knowing these decisions before they are made.

Second: the timing of the assessment matters as much as its method. The Joplin owners said they were more willing to rebuild because someone came to see them early. A study published on New Orleans after Hurricane Katrina, covering 1,358 businesses, finds that aid to small businesses has the most effect in the first six to nine months, and that neighbors reopening weighs on each owner's decision during that same period. An assessment that arrives in the tenth month measures closures already decided.

Third: you do not assess to know, you assess to decide. The Joplin chamber turned its visits into a one-stop shop, then into financing advice. An assessment that leads to no decision has wasted disaster survivors' time for nothing.

This chapter gives you the method to do, at your club's scale, what the Joplin chamber did at the scale of its city: find out quickly, and accurately enough, what the disaster broke in your area's economy, and what it would take to get it going again.

Three words so you forget nothing: damage, losses, needs¶

All official assessment methods rest on a distinction developed by the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), applied in the region since 1972, then adopted by the World Bank and by the joint European Union, United Nations and World Bank guide for the Post-Disaster Needs Assessment (PDNA). It comes down to two words, to which you need only add a third.

Damage is the total or partial destruction of physical assets: the premises, the machines, the stock, the boat, the herd, the orchard. It is valued at replacement cost, at pre-disaster prices.
Losses are the changes in economic flows caused by the disaster: the revenue that no longer comes in, the costs that rise (more expensive transport, debris clearing, renting temporary premises), the wages no longer paid. They last until full recovery, sometimes several years.
Needs are what it takes to restart. The official method says it clearly: the value of damage is used to estimate reconstruction needs; the value of losses is used to estimate economic recovery needs.

For a club, the distinction is anything but academic. A collapsed workshop is damage. The weeks without customers, the suppliers who have vanished, the credit that no longer comes are losses. And it is the losses, far more often than the damage, that decide whether the workshop will reopen.

Losses can exceed damage¶

The official assessment carried out in Nepal after the earthquakes of April and May 2015 gives a striking illustration. In tourism, damage came to 18,863 million Nepali rupees: hotels, trails, sites damaged. Losses, on the other hand, reached 62,379 million: more than three times as much. Tourists stopped coming, even where nothing was destroyed. In the financial sector, the gap was even wider: 5,015 million in damage, 26,890 million in losses, more than five times as much. The same report puts the number of lost workdays at 94.8 million, and the number of home-based workplaces destroyed for good at about 74,500.

Some losses last much longer than the disaster itself. The official guide on agriculture points out that a coconut palm takes about eight years, and a coffee plant at least five, before producing again. The destroyed orchard is one day's damage; the missing harvest is a loss of five or eight years. In Grenada, after Hurricane Beryl in July 2024, the official assessment notes that building a traditional boat takes several months. For a fisherman in Carriacou, the loss is measured not by the price of the boat, but by the months without going to sea.

What losses hide: who loses first¶

The official guide on employment and livelihoods, written for post-disaster assessments, makes three observations that any business owner grasps at once.

First, the self-employed and day laborers lose first. An employee of a large company may go on being paid for a while. The self-employed worker or the laborer hired by the day loses income that very day.

Next, a loss can occur without any damage. The guide gives the example of the hairdresser: the salon is intact, but no one gets a haircut in the weeks that follow. A power cut, a closed road or a vanished supplier has the same effect.

Finally, small establishments often suffer proportionally more than large ones. The guide considers this likely in some cases, floods for instance, without making it a rule: they use more labor for the same revenue, and they are often housed in more fragile premises. The guide cites small-scale fishing boats, "built of weaker materials and often moored in more exposed locations."

One table for each activity¶

The distinction translates into a simple grid, which your team fills in for each activity visited. Take a typical example: a four-person carpentry workshop in a flooded neighborhood.

Heading	What you note	Typical example
Damage	assets destroyed or damaged, at prior prices	two machines, the wood stock, the shop door
Losses	what no longer comes in, what costs more	eight weeks without orders, two unpaid wages, pricier wood
Needs	what it takes to restart	repair one machine, a month of stock, working capital
Main obstacle	what is blocking things today	no electricity on the street

One methodological precaution, which the World Bank points out in its assessment guide: do not count twice. The workshop's losses already include the wages it no longer pays; if you then add "the lost income of the workshop's employees," you have counted the same money twice.

Who is already assessing, and what is left for your club¶

Three weeks after a major disaster, your club will not be the only one asking questions. Several assessments overlap, and you need to be able to recognize them.

Assessment	Who conducts it	When	What it gives the club
Multi-Cluster/Sector Initial Rapid Assessment (MIRA)	humanitarian system and government	the first two weeks	an overview of needs, by area
Rapid Assessment for Markets (RAM)	Red Cross and Red Crescent	the first days	the state of the main markets
Emergency Market Mapping and Analysis (EMMA)	field NGOs	from about two weeks on	analysis of two or three key markets
Post-Disaster Needs Assessment (PDNA)	government, with the EU, UN, World Bank	from one or two weeks on, for at least three to six weeks	damage and losses by sector, at national level

The PDNA is the heaviest. It is conducted at the government's request, and the official guide is explicit: international agencies have no mandate to conduct it without that request. In Nepal, in 2015, it mobilized 23 sector teams and more than 250 national and foreign experts, in less than a month. It produces figures by sector, useful for situating your area, but it is designed for a government, not for a neighborhood.

The official methods themselves acknowledge their weakness. The PDNA guide writes that the informal economy, subsistence agriculture and unpaid family work remain "a challenge" to measure, even though they often represent "a large share of the affected economy." The Nepal PDNA counts 174,823 microenterprises in the fourteen hardest-hit districts, most of them informal, and notes that about half of home-based microenterprises suffered damage to premises, tools or equipment.

This is where your club brings something no one else has. Your members know the market traders, the street's artisans, the nearby cooperatives, the suppliers, the local bankers. They know who sold what, and to whom, before the disaster. A national team will never know that in such detail.

Rotary's rule: collaborate, don't duplicate¶

Rotary states the rule itself in its guide Conducting Community Assessments (July 2024 edition): "Collaborate, don't duplicate." Local governments, NGOs or neighboring clubs may already be studying the community; your assessment, and the projects that come out of it, must not duplicate theirs. The guide recommends finding out whether collaboration would strengthen an existing assessment or initiative.

For disasters, the same guide lists the people to talk to: those directly affected, first responders and emergency management institutions, organizations specializing in preparedness, relief and recovery, the relevant ministries and government offices, and the managers of large public spaces.

The rule is not just common sense: it protects disaster survivors. All the international guides warn against "assessment fatigue." The PDNA guide calls for coordinating visits to avoid repeated passes by teams and increased fatigue "amongst key informants and affected communities." The Core Humanitarian Standard (CHS) asks that communities not be overburdened with multiple assessments and that joint assessments be favored. The livelihoods guidelines of the International Federation of Red Cross and Red Crescent Societies (IFRC) say the same: do not redo what exists, do not take up people's time needlessly.

Why the Foundation will ask you for this assessment¶

If your recovery project is to go through a Rotary Foundation global grant (Chapter 10), the assessment is not optional. The global grant terms in force in July 2026 require projects to respond to the findings of a community needs assessment and to be designed with the community. The Foundation's community economic development guidelines, in their April 2024 version, are even more direct: "The Foundation will not consider projects without a community assessment."

In other words, the work in this chapter is also the first piece of your future funding application.

A warning Rotary publishes itself¶

Rotary's assessment guide tells a story that deserves to be read by any club tempted to act before it has looked.

In 2020, during the pandemic, many clubs in Romagna, Italy, want to help hospitals and patients. They react quickly. They send hospitals medical supplies, including oximeters and thermometers. The donations pile up. The hospitals, already overwhelmed, find themselves cluttered with supplies they did not ask for and must sort through generous donations they do not need or cannot use.

The clubs realize their approach is creating more problems than it solves. With the district's support, more than a dozen Romagna clubs form a task force with health experts and public officials, and consult doctors, nurses, health managers and residents. The assessment reveals a need no one had seen: chronic heart patients have lost access to monitoring of their devices because of the lockdown. The clubs then set up a project, with telemedicine companies and the health authorities, that connects these patients to monitoring systems. According to the guide, the data showed a 74% drop in heart attacks and deaths over two years thanks to the system.

The pandemic is not a natural disaster, and this project is not an economic one. But the mechanism is the one that threatens a club after a flood or an earthquake: the desire to help pushes you to give what you imagine is useful, before you know what is missing. Chapter 5 comes back to what such donations do to local markets.

The club's method in six steps¶

Your club has neither the mandate nor the resources for a national assessment. It does not need them. The tools designed for field organizations claim a modest ambition: EMMA, the emergency market mapping and analysis guide published in 2010 by Oxfam, the International Rescue Committee and Practical Action, aims for an analysis that is "rapid, rough and ready, good-enough," and says it is designed for generalists with no experience in economic analysis. The Red Cross Rapid Assessment for Markets (RAM) is explicitly aimed at practitioners with little expertise and little time. The method that follows draws on these two tools, on the PDNA guide on employment and on the Joplin experience.

Step 1: gather what already exists¶

Before any visit, your team takes stock of what is known.

What you knew before the disaster. If your club did the economic diagnosis of its area in calm times (the CED guide and module 1 of the RAGCED training program describe it), you start from a baseline. The Pre-Crisis Market Analysis (PCMA) guide, published by the IRC, Oxfam and USAID, draws the conclusion: with a baseline, a full market assessment is no longer necessary, only a quick update of a few key indicators. That is the strongest argument for doing this work beforehand (Chapter 15).
What others have already found. Ask the city hall, civil protection, the local Red Cross or United Nations office whether a MIRA, a PDNA or a sector assessment exists, and get the results.
What public data say. Census, business registers, chamber of commerce lists, merchants' associations.

At this stage, also ask the question that the Canadian economic recovery handbook calls the "so what": what will the deliverable be, and what decision will it serve? If your team cannot answer, it is not ready to go out.

Step 2: choose two or three activities, not all of them¶

No one assesses an entire economy. EMMA asks you to choose a few "critical markets" and proposes six criteria for selecting them:

their importance for the lives and incomes of the affected women and men;
what the authorities and the large organizations are already doing;
the hardest-hit markets;
the fit with your organization's mandate and skills;
timing and season;
the existence of realistic response options.

The fourth criterion is yours. A club of business owners, bankers and artisans will choose shops, workshops and local credit; a club rooted in a farming region will choose seeds, storage and crop sales.

EMMA adds a valuable piece of advice: do not assume that critical markets are only those for survival. It distinguishes three families: markets that supply what families need to live, those that supply what they need to work (tools, seeds, fertilizer, nets, boats, transport, credit), and those that give them an income (crops sold, livestock, fish, day labor, reconstruction work). After Cyclone Nargis, in 2008 in Myanmar, rice farmers in the Irrawaddy delta considered seeds and tools more urgent than repairing their houses. For a club working on economic recovery, the last two families are often the most important.

For each activity selected, frame a key question that the assessment must answer. EMMA gives examples, such as this one from Myanmar in 2008: what are the main constraints preventing subsistence fishermen in the delta from buying back nets? A good key question calls for a decision.

Step 3: form the team and set the schedule¶

Pairs. RAM assumes that a team of two people assesses one marketplace in one day. EMMA, in its light version, takes about ten days with one experienced person and one or two local colleagues; with a full team, allow four weeks. For a club, a team of four to six members, organized in pairs, over one to two weeks, is a realistic order of magnitude. This is a proposal of this book, to be adapted to the size of the disaster.

A time allocation. EMMA proposes dividing interview hours as follows: about 15% with households, 30% with local traders and employers, 30% with wholesalers and large buyers, 15% with key informants (elected officials, government offices, chamber of commerce), and 10% held in reserve for follow-ups. This allocation is a reminder: to understand an economy, you mostly need to talk to those who keep it running.

The right moment. EMMA is not used in the very first days: survival needs must be covered and traders must have had time to do their own accounts. At the earliest, that is around the second week, often later. That is roughly when the shift indicators in Chapter 4 start turning green. But nothing stops you, from the first days, from doing what the Joplin chamber did: going to see people, in person, to tell them you are there.

Step 4: go and see, and listen¶

Rotary's assessment guide sets out the right attitude in a few sentences. Go to the community, where people live and work, rather than making them come to you. Listen without judging, without assuming you know what is good for them. Ask open questions, such as "Tell me about..." or "How is ... going?", and follow up.

The Canadian economic recovery handbook adds a warning that Joplin illustrates: sending questionnaires to distressed business owners the day after a disaster can come across as callous. It recommends in-person visits or focus groups, and notes that businesses respond more readily to people they know and trust. That is a club's advantage: your members are often those people.

Surveying a whole area quickly. When your team cannot see all the businesses in an area in time, the Canadian handbook describes a short business survey, conducted through the channels that still work: telephone, email, website, town hall meetings, recovery center, door-to-door canvassing. In 2016, in Wood Buffalo, Canada, a recovery hotline invited businesses to register and answer a short survey; the data were passed to the municipality every day, allowing it to spot trends and priority needs. This survey complements the visit without replacing it, for the reasons the handbook has just given. Plan from this point on to report back to those who responded, as described in Step 6. Appendix A gives the questions to ask an entrepreneur (A3), the follow-up sheet for each trader (A7) and the feedback checklist (A11).

Durations. EMMA allows 20 to 30 minutes for an interview with a household, 20 to 40 minutes with a small trader or local employer (including roadside conversations), half an hour with a large actor, up to an hour with a key informant. RAM counts 30 to 40 minutes per trader.

The questions. The PDNA guide on employment offers, in an annex, three short lists of questions: for key informants, for entrepreneurs and small businesses, and for community leaders and households. EMMA details questionnaires for households, traders and employers. Appendix A of this book offers a translated selection. For a trader, the EMMA questions fall under six headings:

the business: how trade is going, what stock is held compared with usual;
customers: how many there are today, what the selling price is now, and what it was at the same time last year;
credit: did the trader give customers credit before the disaster, do suppliers still give the trader credit, how much is the trader owed;
suppliers: who they are, where they are, and how quickly the trader could supply as much as before, twice as much, three times as much if demand came back;
costs: what the crisis has changed;
the future: the main problems, and what could solve them.

The question about the capacity to supply more is decisive: it will tell you in Chapter 5 whether your club can help families with cash rather than goods, because local traders could meet the demand.

The voices you do not hear. Interview women separately if possible: EMMA, the PDNA guide and the IFRC all recommend it. Rotary's assessment guide calls for a representative sample of the community (by gender, age, background, income or occupation, among other criteria) and reminds you not to interview children without the consent of the person responsible for them; before any exchange with minors, it refers to Rotary's statement of conduct for working with youth. Do not forget home-based workers and informal vendors, whom the Nepal PDNA found so hard hit: they have neither a sign nor an address in the registers.

Step 5: count accurately, but not too much¶

Your club will not produce national statistics, and it must not pretend to. EMMA embraces what it calls "appropriate imprecision." It gives the measure of it: with twenty people interviewed, an average represents the population only to within plus or minus 10%, at best; with ten, to within plus or minus 30%. It draws the rule: write a range rather than a precise figure. And it adds that understanding the trend matters as much as getting precise figures.

For each trader or employer, a small three-column sheet is enough: the baseline (before), the current situation, the trend. The rows cover sales volume, purchase cost, selling price, stock. In the example given by EMMA, a village shop's bean sales had fallen to about 30% of normal, with very low stocks for the season. It is rough information, and it is the information you need.

When you want an order of magnitude for a whole neighborhood, the PDNA guide on employment gives simple formulas:

workdays lost = number of workers before the disaster × days worked per year × percentage drop in activity;
income lost by employees = workers affected × average wage × estimated time without work;
income lost by the self-employed = microenterprises affected × people per microenterprise × average income per person × percentage drop × duration of the drop.

The same guide accepts shortcuts when data are missing: the proportion of homes destroyed can serve as an indicator of business destruction, provided you recognize that it is the least reliable approximation, to be used only for lack of anything else. And it asks you to cross-check sources to reach a reasonable consensus estimate.

Beware of figures that circulate. One claim comes up in many presentations: "40% of businesses never reopen after a disaster, according to the US Federal Emergency Management Agency." No one has found the original study. Do not use it. The available data say something else, and they are more useful. In the New Orleans study, a telephone survey that does a poor job of reaching businesses that have disappeared, 1,190 of the 1,358 businesses tracked had reopened by October 2007, more than two years after Katrina; 168 remained closed. But the smallest reopened less often than the large ones, and the depth of water in the premises was, along with size, the best predictor. In Nepal, seventeen months after the earthquakes, independent monitoring by The Asia Foundation found that more than 90% of affected business owners saw their situation improving in most districts. Small traders who had lost their premises and their goods, however, were still struggling, especially the poorest and women who had opened a small shop or a small restaurant on credit, in rented premises.

The lesson for your assessment: do not look for an overall survival rate. Look for who is at risk of not reopening, and why.

Promise nothing. Rotary's assessment guide asks you to "manage expectations": make it clear that the assessment is exploratory and does not commit the club to tackling a problem defined in advance. The IFRC guidelines are just as clear: make no promises, either in the report or orally. A report by the humanitarian analysis organization ACAPS on the Syria crisis, a different context but a transferable lesson, observes that in Jordan assessment fatigue led a significant number of refugees to refuse to take part, especially where the assessing organization had provided no visible aid. It advises saying from the outset that aid is not guaranteed.

Report the results. The IFRC asks you to present the analysis to the affected communities to check your assumptions, and to gather their views before any decision. The Core Humanitarian Standard, in its 2024 version, opens with a commitment framed from the point of view of affected people: they can exercise their rights and participate in actions and decisions that affect them. The people interviewed must also be able to give critical feedback without fear of losing aid; the 2014 version of the standard already made this point.

Share the data. Pass your results to the other actors (city hall, humanitarian coordination, chamber of commerce) so they do not have to redo your interviews. This is the corollary of the rule "collaborate, don't duplicate."

Decide. For each activity assessed, your team concludes in one line: nothing to do (the activity is restarting on its own); an obstacle to remove (electricity, the road, a supplier) that falls to another actor, which you will flag; or a need the club could meet, alone or with a partner. These last lines will feed Chapters 6 to 9.

The pitfalls¶

Pitfall	Why it happens	Remedy
Launching a large household survey in the first weeks	wanting solid figures	short, targeted interviews; the IFRC advises against large surveys too early
Sending a questionnaire to stricken business owners	it is faster	in-person visits, by members they know
Assessing a solution instead of a need	the club already has a project in mind	distinguish, as Rotary's guide does, feasibility study from needs assessment
Promising aid to get answers	wanting a warm welcome	state up front that the assessment commits to nothing
Adding business losses and lost wages	the two columns seem separate	count each sum only once
Forgetting the informal sector, women, home-based work	they appear in no register	separate interviews, walking the streets, focus groups
Keeping the results to yourself	it does not occur to you	report back to those interviewed and share with other actors
Quoting unsourced figures	they circulate everywhere	the "40%" has no source: quote only what you can source

One last pitfall concerns timing. Assessment is not a one-time act. The Canadian handbook speaks of a constant trade-off between speed and accuracy: the longer you wait, the more reliable the data, but the more business decisions have already been made. Its solution works for your club: a quick first report, then updates. If your club later distributes cash or goods, it will also track the prices of a few products on the local market every week; Chapter 5 explains how, and why.

What your club now has in hand¶

At the end of this work, your club has an economic assessment sheet for its area: for two or three critical activities, what was destroyed, what no longer comes in, what it would take to restart, and what is blocking things today. It knows who else is assessing, and it has shared what it found. This is the first piece of the recovery file, the one on which all the others will rest; Appendix A gives its outline.

The Joplin chamber of commerce did not save 449 businesses. Their owners decided to reopen. But the chamber went to see them while they were still hesitating. It remains to be seen when your club can stop thinking in terms of relief and start thinking in terms of recovery: that is the question of the next chapter.

Chapter 3: Assessing the Economic Damage¶

What the scene teaches¶

Three words so you forget nothing: damage, losses, needs¶

Losses can exceed damage¶

What losses hide: who loses first¶

One table for each activity¶

Who is already assessing, and what is left for your club¶

The blind spot your club can fill¶

Rotary's rule: collaborate, don't duplicate¶

Why the Foundation will ask you for this assessment¶

A warning Rotary publishes itself¶

The club's method in six steps¶

Step 1: gather what already exists¶

Step 2: choose two or three activities, not all of them¶

Step 3: form the team and set the schedule¶

Step 4: go and see, and listen¶

Step 5: count accurately, but not too much¶

The pitfalls¶

What your club now has in hand¶

Checklist¶

Further reading¶

Chapter 3: Assessing the Economic Damage¶

What the scene teaches¶

Three words so you forget nothing: damage, losses, needs¶

Losses can exceed damage¶

What losses hide: who loses first¶

One table for each activity¶

Who is already assessing, and what is left for your club¶

The blind spot your club can fill¶

Rotary's rule: collaborate, don't duplicate¶

Why the Foundation will ask you for this assessment¶

A warning Rotary publishes itself¶

The club's method in six steps¶

Step 1: gather what already exists¶

Step 2: choose two or three activities, not all of them¶

Step 3: form the team and set the schedule¶

Step 4: go and see, and listen¶

Step 5: count accurately, but not too much¶

Step 6: report back, share, decide¶

The pitfalls¶

What your club now has in hand¶

Checklist¶

Further reading¶