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February 2005 - Our 1st Anniversary Online!

Grantmaking in Disasters

Foundations and individuals have responded with enormous generosity to the disaster in South Asia. As of the end of January, contributions to American based relief organizations for Tsunami victims have exceeded $597 million. This surpasses the $350 million pledged by the U.S. government. These figures do not consider support to the international organizations, including the International Federation of Red Cross and Red Crescent, which has raised $1.2 billion world wide. Several organizations, including the U.S. Fund for Relief Services and the Catholic Relief Services have stopped soliciting support.

Yet, foundations are under significant pressure to continue their financial support and to focus their contributions in ways that will be most efficient and effective. This is not the first time the call has gone out. Similar requests were made as a result of international crisis such as Hurricane Mitch, in Central America, the devastating earthquake in Bam, Iran; starvation in the Sudan; and the post-war trauma in the Balkans. Here at home, 9/11 is a fresh memory, as is the Oklahoma bombing and the hurricanes in Florida.

The problem for foundations is how to respond to these demands on resources, which are often outside the scope of the foundation’s grant making focus. Even if there are resources available, most foundations have little experience in disaster grantmaking, much less international grantmaking.

The Council on Foundations, which represents the largest number of family and independent foundations in the country, has published its booklet, Disaster Grantmaking: A Practical Guide for Foundations and Corporations.

We’ll summarize the key lessons presented by the Council.

First, do no harm.
Not all disaster assistance is beneficial. Inappropriate items can overwhelm limited transportation, storage and distribution capacities, thereby delaying the delivery of aid that is desperately needed. Aim to ensure that your grant contributes to the solution and not the problem.

Stop, look and listen before taking action.
Information is the key to good disaster grantmaking. Every disaster has unique characteristics. Take the time to learn about the specifics of a disaster before deciding how to respond.

Don’t act in isolation.
Coordination among disaster grantmakers, among NGOs operating on the ground, and between these two groups, can reduce duplication of effort, make efficient use of resources, and ensure that the highest priority needs are addressed first. Grantmakers can participate in various standing and ad hoc forums—both in person and through electronic means—where needs are discussed, information exchanged and assistance coordinated.

Think beyond the immediate crisis to the long-term.
The emergency phase of a disaster attracts most of the attention and resources. Grantmakers can play a useful role before the crisis by supporting disaster prevention and preparedness activities, and afterward, by filling gaps between emergency relief and long-term development programs.

Bear in mind the expertise of local organizations.
Community-based organizations and NGOs with a local presence are the first on the scene when disasters occur. They know best what assistance is needed and they understand the complex political, social and cultural context of a disaster. However, these organizations are often hampered by lack of resources and organizational capacity. Working with and supporting these organizations allows them to carry out their important role while providing grantmakers with valuable information about the situation on the ground.

Find out how prospective grantees operate.
Organizations that work on disasters vary greatly in their approach and overall philosophy. Some specialize only in emergency relief, while others have a long-term development orientation. Some support the work of local organizations, while others do not. It is wise to know what approach you are supporting before making a grant.

Be accountable to those you are trying to help.
Grantmakers are accountable, not only to their donors, boards and shareholders but also to the people they seek to assist. Grantmakers need to go beyond merely determining how their grant was spent to engage their grantees in a process that assesses social impact.

Communicate your work widely and use it as an educational tool.
Highlighting examples of good disaster grantmaking is an excellent way for grantmakers to educate both internal and external audiences about the disaster process. It is useful to build a knowledge base, record lessons learned, and share your experience with boards, staff, employees, other grantmakers, the media, community groups, public officials and international organizations.

We have some suggestions for you as well.

This calamity is not the first and certainly won’t be the last to affect our world, nation, and community. Develop a long range plan for your foundation that anticipates extraordinary events and either incorporates flexibility in your grantmaking policies for these events, or determines to stay focused on its core mission.

Develop a plan for responding to disasters. There are well recognized national and international agencies experienced in disaster relief, and you should probably keep the list and make sure it’s current. These are organizations that have enough history to have been evaluated and to demonstrate their expertise and efficiency. Among the most widely recognized international agencies are:

American Red Cross (Washington, DC)

International Federation of Red Cross and Red Crescent Societies (Geneva, Switzerland)

CARE (Atlanta, GA)

US Fund for UNICEF (New York, NY)

Oxfam America (Boston, MA)

Save the Children (Westport, CT)

World Vision (Federal Way, WA)

American Jewish World Services (New York, NY)

Catholic Relief Services (Baltimore, MD)

AmeriCares (Stamford, CT)

But big and established does not guarantee best performance. Do your homework before you give. If you want further information on these and other organizations, go to:

American Institute of Philanthropy, The

BBB Wise Giving Alliance

GuideStar

Your foundation can provide direct grants to individuals and you don’t need prior IRS approval to do so. But, there are some important rules to remember. There are slightly different tests for short term aid compared to long term support. But the key tests are that contributions are made in “good faith” and follow a “reasonable and objective formula that is consistently applied.” Keep detailed records for each of the following:

1. The names and addresses of each aid recipient
2. Amount distributed to each
3. Purpose for which the aid was given
4. Manner in which the recipient was selected
5. Relationship, if any, between the aid recipient and your organization (hint – stay away from contributions to your relatives and insiders!)

You must report grants made to individuals on the foundation’s annual 990PF tax return.

Foundations can provide the essential resources for sustainable recovery and rebuilding. Think strategically and connect your head, heart, and pocketbook.

Internal Revenue Service: Disaster Relief: Providing Assistance through Charitable Organizations

The Disaster Preparedness and Emergency Response Association (DERA)

Contact us and we’ll be glad to help.

Legislative Update

Individuals can claim income tax deductions for charitable donations made to tsunami relief organizations through January 31, 2005 on their 2004 returns.

HR 241: To accelerate the income tax benefits for charitable cash contributions for the relief of victims of the Indian Ocean tsunami.

New Date!  Foundation Management Certificate Program at Fielding Granduate University to Begin April 8

If you are a founder, director, or trustee, foundation manager, or an advisor who regularly consults with foundations, then you should attend the Foundation Management Certificate Program, offered by IFF Advisors, Inc., and the Fielding Graduate University. This program provides the most comprehensive, hands-on and practical training available in the country.

The curriculum is offered in three distinct modules, each of which is offered over a weekend with a two-day face-to-face group meeting that includes both lecture and small group work, followed by a six week on-line facilitated discussion. Nationally recognized experts at IFF will share their knowledge and skills during each module, while Fielding’s experienced Human & Organization faculty will facilitate the on-line follow-up discussions. Combining rigorous reading and preparation with case studies and field work, this certificate program provides an exciting combination of scholarship and real life experience, designed to enhance the effectiveness and efficiency of foundation management, and to respond to the unique challenges of family philanthropy.

Students will learn how to identify and select appropriate foundation structures and governance systems, develop comprehensive long-range strategic plans, interview and evaluate investment advisors and managers, and design administrative and grant management systems. They will experience the challenges of family dynamics and learn skills and strategies to respond. Students will also learn how to develop the foundation’s mission and vision, design grant criteria and procedures, and establish methods of monitoring and evaluating grants.

Upon completion of the program, students will receive a Certificate from the Fielding Graduate University. The Certificate Program begins on April 8.

Fielding Graduate University: Register Today!

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