Philanthropy In Times Of Crisis: Six Ways to Improve Grant-Making When Disaster Strikes

Introducing principles for effective philanthropic response to crises.

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Strategy Impact Risk Management

This Practical Giving Guide recommends six key adjustments to render the grant-making process more suitable for disaster response. It introduces best practices for the timing and management of grants during the unique circumstances presented during a crisis.

Key Takeaways    

  • Disaster-related philanthropy in absolute dollar terms remains a small proportion of overall corporate giving. The median dollar value of disaster-related giving has grown by 69% from 2016 to 2018.
  • Engaging in philanthropy during a disaster need not derail a long-term giving strategy. In fact, when done well, it can bolster the meaningful impact of an entire portfolio.
  • Corporate givers should consider a timed-release strategy for support that initially transfers gifts early in the disaster timeframe and continues to release support throughout the recovery effort.
  • Corporate givers should bear in mind the five F’s of disaster-response grant management policy: award fast, facilitate grant awards and management, offer flexible funding, fully disclose your gifts, support forward looking activities.
  • A timely process during a crisis is just as good as an excellent process during normal conditions.
  • Facilitating a simplified grant process allows grantees to divert a majority of their time to urgent matters at hand.
  • Disaster situations evolve at high speeds and require agile responses that can be more easily achieved through flexible funding.
  • Sharing information about where funds are flowing can help peers in the donor community ensure their gifts are made where they are most needed.
  • While governments are obligated to and busy with first response activities, preparation, resilience and mitigation measures are natural areas for philanthropy to provide support that meets the full lifecycle of a disaster response.

Introduction

If you feel that your newsfeed highlights catastrophic events more so now than it did years ago, you are not alone. Disasters, or at least the documentation thereof, have doubled in the last 50 years. Whether this is due to more robust media or the tangible results of extreme weather and climate change, more frequent armed conflicts or otherwise, the fact remains that humans today are increasingly aware of acute large-scale catastrophes.

Averaging less than 10% of giving, disaster-related philanthropy in absolute dollar terms remains a small proportion of overall corporate giving[1] when compared to other outlets including education, economic development, and healthcare. However, given increases in the severity and frequency of reported crises, the median dollar value of disaster-related giving has grown by 69% from 2016 to 2018[2], more so than in any other giving category. Corporate giving in this area tends to focus on alleviating the effects of natural disasters[3], such as storms and flooding, over that of humanitarian and other types of catastrophes.

In the throes of crisis, corporate philanthropy bridges support from the private sector to fill gaps in government response and acts as a critical lifeline to civil society organisations working on the front lines. While disaster philanthropy is by its very nature unplanned, engaging in it need not derail your long-term giving strategy. In fact, when done well, it can bolster the meaningful impact of your entire portfolio.

 

Fundamentals

 

Grant Timeline During A Disaster

50% of all of disaster philanthropy occurs during the first four weeks of a crisis, and by the two-month mark, 70% has been executed. Six months later, giving has largely ceased and the situation is forgotten by short news cycles and the donor community. It goes without saying initial giving during a catastrophe should be conducted quickly and with a sense of urgency. However, corporate givers should bear in mind that disaster recovery is a long game whose later stages also requires attention and support. Corporate givers should consider a timed-release giving strategy that initially offers support early in the disaster timeframe and continues to release support throughout the recovery effort.

Figure 1: Best Practice: Time-Released Disaster Philanthropy
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Large scale disasters have far-reaching and systemic consequences that are often not apparent until several weeks or months after the initial incident. For example, floods and storms can prompt long-standing homelessness, the effects of which can include school truancy, stresses on mental health, migration, etc. Health crises such as epidemics and pandemics can come in waves, with the second and third instances proving more taxing than the first. It can take years to recover from disasters that spur obvious consequences like job losses, out-of-school children, economic disruption, and even longer to regain control of the less apparent but related after effects like household violence, low female labour force participation, alcoholism, etc.

Despite the need for post-crisis support, in 2019 an estimated 3% of corporate-funded disaster philanthropy was dedicated to recovery efforts[4]. Much like stopping a course of antibiotics early, prematurely ending funding can cripple recovery and exacerbate growing social challenges. Corporate givers can avoid this by better partitioning disaster relief to be released across the short and long terms.

Grant Management During a Disaster

Crises are hard to predict, occur with little to no warning, and carry devastation in their wake. These unique circumstances demand the most responsive grant management policies that may differ from normal practices.

Corporate givers should bear in mind the five F’s of best-in-class disaster-response grant management policy:

  1. Fast – Award grants quickly to minimise delay in resource transfer
  2. Facilitate – Reduce the burdens to apply for and maintain grants
  3. Flexible – Allow grantees to utilise funding flexibly during quickly evolving situations
  4. Full Disclosure – Share information about your gifts to avoid duplication amongst donors
  5. Forward Looking – Support risk mitigation and preparedness efforts for the future
Figure 2: Best Practice: The Five F’s of Disaster Philanthropy Grant Management Policy
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Fast

Grant-making under normal conditions is founded upon well-structured scopes of work, robust pools of vetted and qualified applicants, and ample timelines for awards. During a crisis, time is of the essence and quick relief cannot rely on business-as-usual processes with long lead-times. To speed up awards, corporate givers must temporarily streamline their internal procedures. A timely process during a crisis is just as good as an excellent process during normal conditions. Reducing the time and number of individuals reviewing proposals or reducing the required quorum of applicants are simple ways to hasten the time to award.

The average not-for-profit organisation holds just three months’ worth of cash reserves at any given point throughout the year. In times of crisis, demands for their services spike exponentially while payment for those services drop drastically, taxing their already thin operating capital. Making grants quickly during a disaster can get much-needed capital to front-line organisations that can put it to good use.

Facilitate

Under normal conditions, grant applicants supply required documentation in advance of the selection and due diligence processes. It is also common practice to require regular reporting and communication from grantees throughout the award period. During times of crisis however, these requirements detract from valuable staff time that could be otherwise dedicated to disaster response. It is important that grant makers strip down or delay requirements so that community organisations can apply for and manage grants more easily. Facilitating a simplified process allows grantees to divert a majority of their time to urgent matters at hand.

This does not suggest that due diligence, learning, and reporting requirements are overlooked, and quality sacrificed, but that grant makers take stock of and focus on what is truly essential. To do so, an Important/Urgent Matrix can be helpful. Using this matrix, a grant maker inventories all the procedures and requirements involved in the grant management process and tag them as being either important or unimportant, and further classify them as urgent or not urgent. Important items should be retained in the process. Important items that are also urgent should be tended to immediately, and items that are important but not urgent can be deferred until after the crisis has dissipated. Unimportant items can likely be removed altogether from disaster-response grant making.

Figure 3: Best Practice: Employ an Urgent/Important Matrix to Facilitate Grant Management
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For example, an important but not necessarily urgent process such as surveying beneficiary satisfaction as part of the grant monitoring process might take second priority when the grantee can otherwise be carrying out urgent and important work such as delivering emergency medical attention to hundreds of community members. Requirements that are important but not urgent can always be addressed later in the grant cycle.

Flexible

Restricting grant money for use only on specific programme related expenses is common during normal conditions, but crippling in a crisis. Disaster situations evolve at high speeds  and require agile responses that can be more easily achieved through flexible funding.  Flexible funding allows grants to be utilised across an organisation’s programmes including overheads. If a grant was made for new programming prior to the disaster, flexible funding policies can allow that committed funding to be diverted away from its original intention towards a more urgent disaster response. 

Cash gifts are the most flexible resource that can be transferred during a crisis. In-kind gifts can create logistical challenges especially during natural disasters. They can have long lead-times to reach their destination, and in the interim, needs could have changed rendering them useless. In-kind gifts also detract from procuring goods from within a local community, doing further damage to already fragile economies.

Corporate givers regularly sponsor community organisations that, under normal conditions, receive periodic instalments over the course of a year. If these organisations are also relevant to disaster relief, corporate givers can consider front-loading their annual donations so that the grantee can respond to the disaster in the way it sees fit.

Full Disclosure

Crisis-time giving is executed at a furious pace. Without clear information about needs, availability of funds, and transfer of gifts, this well-intended rush inevitably leads to duplication or suboptimal distribution of efforts and resources. In a worst-case scenario, a critical mass of donor gifts land with a small subset of popular organisations or are disproportionately pooled around few issue areas leaving others to endure financial famine. Sharing information about where funds are flowing help peers in the donor community ensure their gifts are made where they are most needed.  Even something as simple as sharing a spreadsheet amongst peer donors or collaborators is helpful to ensure financial support is evenly spread amongst grantees and areas of need.

Forward Looking

Crises, particularly natural and humanitarian disasters, repeat themselves in some form year after year across the globe. Although they are cyclical, less than 2% of corporate philanthropic spending is dedicated to forward-looking activities including disaster preparedness, risk mitigation, and resilience measures[5]. While governments are obligated to and busy with first response activities, preparation, resilience and mitigation measures are natural areas for philanthropy to provide support to meet the full lifecycle of a disaster response.

Supporting forward looking activities also includes taking time to reflect on internal processes. Dedicating time and effort immediately following a grant cycle to conduct an after-action review is a wonderful way to harness lessons and improve crisis-time grant making.