Disaster Grantmaking

In times of disaster, many generous donors give to one or more appeals. The experienced grantmaker may then be called upon to do what they do best: distribute money. But is grantmaking in a disaster simply a variant of ‘everyday’ grantmaking? Or does it present some very different responsibilities?

Discussions of philanthropy are often focused on the higher-level decisions that must be made by foundations as distributing or grantmaking organisations. Practitioner discourse in seminars and webinars is focused on changes in strategy, mission alignment, policy responses and public pledges.

In the following paragraphs, I identify and discuss key differences and issues involved in grantmaking in and for disasters, including distributing funds donated by the public, as compared with grantmaking from an established foundation with an endowment. While the activity remains similar, the constraints and dilemmas facing disaster grantmakers are worthy of particular attention and reflection.

Three key challenges facing disaster grantmakers are described below and contextualised to three major disasters in Australia within the last decade: the 2011 Queensland floods and cyclone, the 2019/2020 bushfires, and the 2020 COVID-19 global pandemic (specifically in an Australian context).

Key challenge #1: The duration and scale of the disaster are unknown at the outset

Disasters are often sudden, rarely predictable, and their duration and scale are undetermined at first. For grantmakers, distributing funds over an unknown geographic scope over an unknown time period raises both process and equity issues. Both pragmatically and ethically, how much funding should be distributed immediately, and how much held back against future increases in the magnitude of a disaster?

At the time of the Queensland floods in 2011, the damage and loss could not be ascertained, nor distribution of funds begin until the floodwaters had receded. During the 2019/2020 bushfires, firefighters and communities often had to wait weeks or months for rain to put the fires out, and until that time their work was more about protecting lives, properties and ecosystems in an unfolding and changeable scenario.

Similarly, the active duration of the COVID-19 pandemic in Australia will be determined by the availability of vaccines and/or preventative treatments, while the scale of the disaster is being limited by lockdowns, physical distancing and border closures between Australian states, restricting travel.

Key challenge #2: An unknown total amount to distribute, to an unknown number and identity of beneficiaries

During the 2019/2020 bushfires, fundraising was done by and through a very large number of organisations, with some donations made directly to charities delivering services and some to broader public appeals. The total amount donated remains impossible to ascertain, but there were quick accusations of slow distribution of funds to those in dire need, complicated by loss of documentation, huge geographic scale, fraudulent claims, and fundraising scams. During the 2019-2020 bushfires, over 500 related scams were reported to the Australian Competition and Consumer Commission – which, regrettably, is consistent with what was reported for previous disasters (Royal Commission into National Natural Disaster Arrangements, 2020, pp. p445, Section 421.474).

The 2011 Queensland floods appeal was managed mainly through one organisation (initially the state government through the Premier’s Disaster Relief Fund, but then delegated to the Red Cross) so the amount to be distributed was clearer. Multiple persons were missing during the height of the floods and determining who had died took many weeks. Cases for financial support were complicated by overlap with private insurance claims, loss of documentation, and the randomness of the floodwaters; meaning that each case had to be assessed individually rather than at suburb, postcode or even street level.

The need for COVID-19 donations has been offset by high levels of Australian Government social security safety-net funding, with philanthropic support to date focused more on vaccine development, emergency food and housing relief, as well as mental health and domestic and family violence support services. Grantmakers have loosened or removed restrictions on grants previously made, allowing funds to be used for the beneficiary organisation’s highest priorities, and have also worked to distribute grants faster and more frequently than in their ‘everyday’ grantmaking practices (Philanthropy Australia, 2020). It is further important to note that some foundations may be constrained by their trust deed in the causes and beneficiaries to whom they can distribute funds, which also applies to individual charities receiving donations which must then be applied to their particular charitable purposes.

Key challenge #3: Communicating with large numbers of unidentified (potential and confirmed) donors

The audience for communications in disaster grantmaking includes donors, the general public, and other funding agencies. Communication is often reactive rather than proactive.

Communication with donors for the purposes of reporting and accountability must be done as a general broadcast if donors have not provided contact details when making their donation. Donors are more likely to be contactable if their donation was made to an existing grantmaking organisation, rather than to an appeal established specifically in response to a disaster. Communication therefore often occurs through social and general media channels. Time pressure is far greater than normal grantmaking, as hours and days can seem like an endless amount of time in a disaster. Donors to disaster-related causes value feedback on how their money has helped people affected, perhaps more than for donations to non-disaster related fundraising appeals.

During the 2019/2020 bushfires, a huge amount of fundraising was done online, both within Australia and internationally. Subsequent communication through general and social media has attracted sustained criticism of grantmakers and distributers of funds. The intention of donors is critical here, and lack of clarity around donor intent results in expensive and time-consuming amendments to comply with legal restrictions on distributions. An example of this is gifts to the NSW Fire Service, one of the major named recipients of donations.

At the time of the 2011 Queensland floods, communication with donors occurred initially through government/official channels, led by the State Premier. When the management of funds distribution was later delegated to a nonprofit organisation, communications were lower profile and attracted less criticism for being slow and inequitable.

COVID-19 relief donations from the general public so far are largely not made to philanthropic foundations, with the possible exception of local community foundations. Donations from individuals are instead going directly to charities delivering services. Philanthropic foundations that have sub-funds (similar to Donor Advised Funds) are supporting donors to give above the required minimum distribution percentages of income earned by highlighting needs and opportunities for collaboration and co-funding. For workplace giving programs, the effects of COVID-19 are unknown.

Reflections

Disasters may elicit unprecedented generosity from donors, both in the number who donate and the amount that they contribute. Online crowdfunding by nonprofits and their advocates has enabled low entry barriers for fundraisers and low search costs for donors, as well as opportunities to engage and to give without regard to geographic locations. The ways in which people are using social media and online giving platforms to donate suggest the need for diversity in giving channels with a range of alternatives that make giving visible, both to donors and their peers. Lessons to be learned from the key challenges faced by disaster grantmakers include that different disasters require different responses from different actors, which can increase, reduce and/or change the need for foundation philanthropic responses.

Necessary skill sets and characteristics for disaster grantmakers therefore include excellent communication skills, confidence and a thick skin to work in a media goldfish bowl, legal knowledge, established and new networks, endless patience, the capacity for concentrated hard work, a nose for fraud, and wisdom in judgement.

Thus there are crucial differences and contentions involved in grantmaking in and for disasters when distributing funds donated by the public, in comparison with grantmaking from an endowed foundation. These can be summarised as the ‘unknowns’ – unknown funds to distribute, unknown time frames, unknown beneficiaries, unknown places and often unknown donors. As the incidence and severity of disasters increases, these are complex and important areas for researchers to explore around who donors trust to distribute funds in times of disaster.

For more articles on grantmaking and COVID-19, we encourage you to consult our Special Edition of our annual PhiLanthropic Year -Philanthropy & COVID-19 as well as a series of case studies on responses to COVID-19 within the Canadian philanthropic community.