Disaster grantmaking

As the world grapples with climate change, natural disasters such as bushfires, floods, droughts and cyclones are becoming increasingly common, affecting the health, wellbeing, economy, and built and natural environment of communities. Disaster grantmaking will continue to be an area of interest for grantmakers in the years to come.

In times of crisis, there is often a rush to get money out the door, but how do grantmakers decide how to proceed in these situations? Do you rush money out to the immediate relief efforts, or do you sit back and take a more strategic and considered approach?

How do grantmakers choose whether to fund urgent relief efforts, medium- or long-term recovery efforts, or mitigation and prevention activities? How do you manage risk while maximising the impact of your grants?

There's no need to wait until the next disaster to formulate your response. Grantmakers who are proactive and establish a disaster grantmaking strategy (including internal guidelines and criteria) will be well placed to make quick, well-informed decisions and maximise their impact.

This help sheet, part of a suite of disaster grantmaking resources compiled by SmartyGrants will guide you through some key questions (and answers) to help you to decide on the right disaster grantmaking approach for your organisation.

Why does your disaster response grant exist and what do you aim to achieve?

This is the first question you need to ask when designing any new grants program, and it is equally important in the disaster grantmaking context, if not more so.

  • What are the key goals and purposes of your disaster response?
  • Are the goals of your proposed grants program consistent with the overall vision and mission of your organisation?

It is good practice to define your desired outcomes up-front, as this will shape your overall response and strategy. It will also set the goalposts for a future evaluation of the impact of your grants.

What will success look like? What outcomes do you aim to achieve?

How will you know whether your grants program was a success? How will you evaluate your program?

  • Will the evaluation be summative or formative?

Your desired outcomes need to be considered from the outset. It is important to have your outcomes in mind when designing your program, as these will influence the answers to many of the questions that follow.

Summative evaluations usually look at outcomes at the end of the program, whereas formative evaluations look at processes as they unfold. A robust evaluation will feed into a continuous improvement process, helping you to plan for and improve future disaster grantmaking processes.

What are the risks?

  • What, if any, risks are involved in delivering the grants program?
  • What is your organisation's risk tolerance?

This will influence your decisions on the size of your grants, the speed of the grants process, and the number of controls you implement. Additional controls mitigate some of your risk but increase the level of administrative burden for grant recipients. When implementing controls, you should be mindful of proportionality (the administrative burden should be in proportion to the level of risk), and mindful of the challenges and logistical issues facing grantees in disaster-affected areas, which may affect their ability to apply for funding or deliver reports.

Fast or slow?

  • Do you want to get funds out the door very quickly, or would you rather hang back and consider your response?

There are compelling arguments for each approach. Your decision will depend on the objectives of your grant and the particular situation you are responding to.

Quick response grants focus on getting money out the door very quickly. Depending on your risk appetite, they tend to be suited to small, simple grants. They are usually used for time-critical situations - for example, to provide immediate relief to disaster victims shortly after a disaster.

A slower, more considered response allows you to take time to learn about the specifics of the disaster before deciding how to respond. These grants tend to suit to medium- to long-term recovery efforts where more time is needed to establish the individual needs of communities.

Another approach is to allocate a portion of funds to quick response grants, and defer a portion for the medium and long term, while you wait to see what needs emerge.

How much?

  • What is the dollar value of the grants program, and over what time period?
  • How many funding rounds will there be? Will you have a set number of rounds, or will you have a rolling application program?

Small, simple, short-term grants suit a fast response, while larger, longer-term grants tend to be more complex and require more time. The number and frequency of your funding rounds will be dictated by the objectives of your program and your total funding on offer.

Short or long term?

  • Will your funding consist of one-off grants (e.g. emergency relief payments, short projects), or will you focus on longer term or recurrent grants (e.g. recovery, reconstruction, mitigation, prevention)?

Again, one-off grants suit a fast response, while longer-term funding requires more time to plan and implement. Recovery from a disaster takes a long time, and grantmakers need to be conscious that communities may take some time to be able to articulate what they need. It can take years or decades for communities to recover fully from a disaster.

Projects or organisations?

  • Will you fund specific projects, or will you fund organisations that provide services to affected communities?

Specific projects are usually less flexible and require a thorough knowledge of the needs of the proposed beneficiaries. Depending on your organisation's expertise and networks, it may take time to engage with affected communities and collaboratively design suitable projects. Organisation-based funding is generally more flexible and provides resources to local organisations, allowing them to address identified needs in their communities.

A few large grants or many smaller ones? Targeted by geography or not?

  • How are you going to distribute the funds?
  • Are you going to give out a few large grants, or a larger number of smaller grants?
  • Will your program focus on a specific geographic area, or will it cover the whole state, territory or country?

Concentrating on a few large grants to a small number of recipients can be an efficient way to get funding out the door, but may increase your risk, as funding is concentrated among just a few recipients. If you adopt this strategy, it is important to ensure that grant recipients are professional and have well established operational procedures and governance structures. It is also important to ensure that they (and their delivery partners) have a good understanding of the complex political, social and cultural dimensions of the disaster, and have existing relationships and expertise in place to deal with these.

In contrast, a small grant strategy allows you to fund a larger number of smaller, local grassroots organisations. These local organisations tend to be well connected to their communities and have critical local expertise. Funding a larger volume of smaller grants can be an effective strategy for achieving a targeted impact over a large geographic area.

Small and emerging organisations may have relatively little experience managing grants and projects, and may require additional support from grantmakers to build their governance and operational capability. However, investing in their capacity has the potential to increase both the grantee's and their community's capacity to respond to future disasters.

Regardless of your approach, it is a good idea to look at how prospective grantees operate, and to seek out funding recipients whose approach and philosophy are well aligned with yours.

Go it alone or collaborate?

Deciding whether to go it alone or collaborate with others? Your post-disaster grantmaking approach will depend on your answers to a range of questions.

  • What is your organisation's expertise in this area?

If your organisation does not have a local presence, or specific knowledge of the sector, or of affected communities, partnering with a local organisation might be a good approach.

Your budget may also influence your decision to partner with others. If you have only a relatively small amount of money to distribute, you may consider partnering with other organisations to maximise your impact.

As always, when considering partnering with others, it's a good idea to ensure that your organisations have compatible approaches and risk appetites, and that your respective objectives and goals are well aligned.

Regardless of your decision on collaboration, you should always be mindful of what other grantmakers are doing in the disaster-affected area. Good communication and coordination ensure maximum impact, reduce the risk of duplication, and ensure that the highest priority needs are addressed first.

What is your niche?

In deciding how to respond to a disaster, it's good practice to ensure that the goals of your proposed grants program are consistent with the overall vision and mission of your organisation.

A great place to start is to look at your organisation's key strengths in the context of the disaster-affected area. Identify things you know about, things you're good at, things others aren't funding, and things your stakeholders care about). A SWOT analysis or an environmental scan (e.g. PESTEL) can be useful in identifying where your organisation is best placed to direct its efforts. Having an awareness of what other grantmakers are doing is essential too, to avoid duplication and ensure maximum impact.

Beneficiary-based approach

Following the 2009 Black Saturday bushfires, the Victorian Bushfire Reconstruction and Recovery Authority adopted a recognised disaster recovery framework for rebuilding and recovery. This framework very clearly categorises disaster recovery beneficiaries into four categories and is a very helpful guide for disaster grantmakers who are deciding where to direct their efforts:

  1. People
    • Safety
    • Health
    • Welfare
    • Wellbeing
  2. Reconstruction
    • Residential
    • Commercial
    • Rural
    • Public buildings
  3. Economy
    • Individuals
    • Business
    • Infrastructure
    • Government
  4. Environment
    • Biodiversity and ecosystems
    • Amenities
    • Waste and pollution management
    • Natural resources
Recov reconstruct framework

Place-based or broad-based approach?

When disasters happen, they tend to happen in specific places, and their impact on communities varies greatly from place to place. Therefore, most disaster grantmaking is necessarily place based. A place-based approach aims to meets specific local needs by using targeted approaches that are developed in partnership with grantees. When you adopt a place-based approach, it is critical that impacted communities have a say in determining what they need for recovery.

However, depending on your chosen beneficiary and the objectives of your program, you may instead decide to adopt a broad-based approach. A broad-based program provides standard services across a wide range of locations to address common needs. These are useful in addressing specific needs applicable to all groups impacted by a disaster, regardless of their location. For example, if you are focusing on individual welfare in the immediate aftermath of a disaster, you may target individuals who have lost their homes with an emergency grant to meet their immediate needs.

Structural or systems-based approach?

In disaster grantmaking, there is an inherent tension between funding immediate response and recovery, and funding structural or systems change to mitigate or prevent future disasters. A 2014 Productivity Commission report found, "Governments overinvest in post-disaster reconstruction and underinvest in mitigation that would limit the impact of natural disasters in the first place."

Depending on your focus, targeting structural or systems change may be good fit for your organisation.

Some examples of structural or systems change in the post-bushfire context are these:

  1. Bushfire resilience
  2. Community resilience
  3. Bushfire prevention
  4. Climate change

Who's giving what? A disaster grantmaking case study

The Funding Centre, an Our Community enterprise, is curating a list of grants made available in the wake of the 2020 Australian bushfires. Funders include government, corporate and philanthropic groups.

As you would expect, in the immediate aftermath of a disaster, most grants are focused on providing immediate relief to those in need.

Grantmakers have deployed quick-response grants to address the immediate needs of individuals, families and small businesses who require urgent relief and assistance. The grants are relatively small and have minimal reporting requirements from grantees.

Australian Red Cross Immediate Assistance Grants

The Australian Red Cross is committed to building resilient communities and supporting people in disasters. Since July 2019, its Disaster Relief and Recovery appeal has raised $127 million.

Of this, approximately $61.5 million has been allocated towards immediate assistance grants, which aim to help people suffering financial hardship as a result of the Australian bushfires.

A further $42.5 million has been allocated towards further immediate and longer-term bushfire assistance, and $18 million to support community recovery over the next three years.

As the name suggests, Immediate Assistance Grants are quick-response grants which focus on aiding people who are suffering financial hardship as a result of the bushfires. Grants are available for people who have lost their homes, people whose homes have been structurally damaged, and people who have been injured and hospitalised as result of the bushfires.

Applicants are generally required to provide identity and evidentiary documents, but alternative processes are available for people whose documents have been destroyed.

Further information on Red Cross Immediate Assistance Grants is available on the Red Cross website.

More information on grantmaking in the wake of a disaster.