The destruction and suffering witnessed in the aftermath of disasters have an immediacy that attracts the attention of donors big and small. In a typical year, organizations whose missions involve disasters—whether relief, response or preparedness—make up a significant share of the charitable donation pie. GuideStar tags more than 21,000 nonprofits under the category “disaster and emergency management.”
This year, a novel disaster—COVID-19—dominated philanthropic giving in unprecedented ways. The pandemic led to hundreds of thousands of lives lost and trillions in lost GDP, and prompted more than $11.9 billion in charitable donations in the first half of the year alone, according to the Center for Disaster Philanthropy and Candid.
The pandemic is also drawing heightened attention to the practice of disaster philanthropy itself. Two recently released reports examine philanthropy’s efforts to prepare for, respond to and mitigate disasters. The Conference Board’s “Disaster Philanthropy Practices: 2020 Edition” provides a snapshot of corporate philanthropic support for disaster philanthropy. This follows closely on the heels of an annual report jointly compiled by Candid and the Center for Disaster Philanthropy (CDP), “Measuring the State of Disaster Philanthropy 2020: Data to Drive Decisions,” published in November.
At a crucial moment for disaster philanthropy, the latest editions of these two reports offer a window into where relief funding comes from and why—and some areas for improvement, specifically when it comes to funding for preparedness and resilience.
The sources of disaster philanthropy
Last year was unlike any other as a result of the COVID pandemic, but the financial and human toll of natural disasters has steadily risen over the last decade. In the U.S. alone last year, there were 22 weather/climate disaster events with losses exceeding $1 billion each, according to the National Centers for Environmental Information. This compares with a 1980–2019 annual average of 6.6 such events (monetary damage figures are adjusted for inflation). That number breaks the previous record of 16 such events in 2017 and 2011.
As shown by the CDP/Candid report, which looks at funding from 2018 (there’s always a lag in reporting of funding data), disaster-focused organizations receive financial support from a variety of sources, including individual donors, corporations, foundations and other major donors. Aggregated disaster-related funding from the 13 data sources the authors examined totaled nearly $76 billion in 2018.
Despite significant charitable support for disaster causes, the largest funder of disaster relief is the federal government, according to the report. Government disaster-related expenditures include appropriations for programs administered by the Federal Emergency Management Agency (FEMA), the U.S. Department of Housing and Urban Development (HUD) for domestic disasters, along with overseas disaster assistance programs operated by foreign assistance agencies such as the U.S. Economic Development Administration (EDA).
Individual giving to disaster causes, roughly estimated to have been $3 billion in 2018, is another key source of support in this sector of philanthropy. The report points out that 29% of U.S. households made a disaster-related donation in 2018, averaging $83. Data from previous years show similar levels of participation by individuals, and scale and proximity greatly influence individual giving. As noted by Candid/CDP, “the magnitude of a disaster and personal connection to the disaster location influenced the decision for households to give after a disaster, especially when a disaster occurred in the U.S.”
Foundations—particularly community foundations—also play an important role in disaster philanthropy, with the report identifying $468 million in 2018 funding from foundations and public charities. Such giving is similarly driven by a foundation’s ties to a community that has suffered a major disaster. The CDP/Candid report, for example, shows that of the top 10 institutional donors in 2018, four were Texas-based funders that became heavily engaged in the response to the Hurricane Harvey disaster, including the top foundation funder of disaster response that year, the Texas-based OneStar Foundation.
Brad Ward, who works on issues of community philanthropy at the Council on Foundations, observed that disaster philanthropy is taking a larger role in foundations than it previously has, both in disaster response and preparedness. Ten years ago, Ward noted, it was not common for community foundations to have disaster relief funds, but as disasters have increased in frequency and scale, community foundations have increased their efforts in this area.
Global philanthropy is, as well. Brian Kastner, lead strategist for global philanthropy at the Council on Foundations, observed that “part of what is motivating this shift in foundation funding is that disasters are getting worse and will continue to get worse. Kastner recommends that foundations take a “structural, longer-term approach” to disaster management.
The role of corporate funders
Corporate philanthropy is another vital source of support to disaster victims, and proximity is, again, a big factor driving funding. The recent Conference Board report indicates that corporate disaster philanthropy was predominantly driven by whether a company had a business presence in the area affected by the disaster as well as the human toll of the disaster, with 58% of respondents saying that the most important factor in their decision making is their company’s business presence in the geographic area affected by the disaster.
Bryan Iams, who oversees corporate philanthropy at PPG Industries in Pittsburgh, put it this way: “When disasters occur, we look at the impact of the disaster and the needs of the community, along with our footprint, including our employees, customers and suppliers.”
For multinational companies, the scope of the corporate footprint can be global. Iams noted that PPG maintains a Global Community Engagement Budget, which supports corporate philanthropy outside the U.S. In 2019, PPG lent significant support to Australian wildfire relief efforts, and this year, because PPG operates a manufacturing facility in Wuhan, China, the company became engaged in a crisis response to coronavirus in January of this year.
Cash isn’t the only form that corporate support might take. The Conference Board report observes that many nonprofits lack IT resources, which hinders their policy research, community organizing and advocacy. Corporations, which often have deep IT competencies, could use those assets to support the data and broader IT needs of nonprofit/NGOs involved in disaster preparedness and resiliency building. Such in-kind support, often referred to as data philanthropy, might involve making a firm’s data resources available, including raw data, skilled data scientists and analysts, data technologies such as software or cloud platforms, as well as hard assets such as computers and IT infrastructure components.
PPG’s Iams noted that in disasters such as Hurricane Laura, PPG used its corporate expertise to provide logistical support to the recovery. He said it’s important that a corporation “understand who you are and what you bring. That’s different from company to company, and smart corporate philanthropy recognizes that.”
Corporate social responsibility (CSR) objectives can also be aligned with corporate disaster philanthropy. As the Conference Board report notes, “The disparate impact natural disasters have on disadvantaged populations is well documented. These communities’ close proximity to high-risk areas, poor housing conditions, and low personal wealth levels all factor into how such communities experience both the natural disaster and its aftermath.”
Government and investors are also focusing on the impact of climate change, and funding dedicated to climate change mitigation can be viewed as supporting a company’s CSR efforts. Roughly a quarter of corporations responding to the Conference Board’s survey said they are “aligning disaster responses with climate change strategies,” and roughly the same percentage indicated that they are looking at trends in climate change to understand future vulnerabilities as part of their disaster philanthropy strategies.
Preparedness and resilience
Preparedness has long received a small fraction of the disaster philanthropy funding. The highly visible and urgent nature of relief and recovery efforts attract most disaster philanthropy dollars, whether corporate or individual. Candid/CDP reported that of all disaster assistance support, 50% went to response and relief efforts and 12% went toward reconstruction and recovery (mostly for storm recovery). In contrast, only 2% was allocated for resilience measures and 4% for disaster preparedness.
The problem of underfunding for preparedness and resilience is echoed in the Conference Board report, which urges corporate philanthropy to make preparedness a higher priority in disaster-related giving and recommends that corporations dedicate a significant portion of their annual disaster response budget to preparedness in the areas and communities in which they operate.
Given the urgent needs of victims of disasters, why should funders consider directing a greater portion of their support to preparedness? There is, of course, a long-held understanding that preventing or mitigating disaster-related loss is far less expensive than trying to make victims whole after the fact. To cite one example, the National Institute of Building Sciences (NIBS) examined 23 years of federally funded mitigation grants and found that $1 spent on hazard mitigation funding can save the nation $6 in future disaster costs.
Kathy Baughman McLeod of the Adrienne Arsht-Rockefeller Foundation Resilience Center, discussing the issue of disaster resilience, said, “I 100% agree that shifting our investment from response and recovery to risk reduction is more cost-effective and we need to accelerate that shift.” She pointed to climate change philanthropy as a particularly sophisticated approach to risk reduction.
“Disaster preparedness, much like resilience, is about playing the long game,” McLeod said. “Companies need to toggle back and forth between response and preparation. Knowing it’s more cost-effective to invest in preparation and resilience, and that doing so protects your employees, workforce communities, and supply chains, will challenge companies to balance post-disaster philanthropy with more risk and data-informed climate resilience strategies that can stretch philanthropic dollars.”
The recent natural disasters that devastated Puerto Rico provide some examples of how funders can incorporate resilience building into relief and recovery. Puerto Rico long suffered from aging electrical infrastructure, and the disasters that hit the island resulted in loss of power for many months. Funders, including the Rockefeller Foundation, have actively engaged in recovery and infrastructure rebuilding efforts in Puerto Rico. The funders decided to use the recovery opportunity not merely to rebuild, but to do so in a way that would result in a greener and more reliable power system, using solar microgrids to replace an old and fragile power distribution grid.
According to Ashvin Dayal, who leads Rockefeller’s power and climate funding, “Our work in Puerto Rico evolved from a decade of work in resilience investment, where our work with affected cities around the world evolved into a resilient cities network. When we studied the challenge of Puerto Rico, we saw that the electrical system was outdated and fragile and was vulnerable to a big shock.”
After the hurricanes hit, Rockefeller ended up supporting distributed renewable energy technology to transition communities to decentralized, renewable power that is less vulnerable to disasters.
“There’s a smart way to use response dollars to build resilience,” Dayal says. “You can quickly move into areas where you can take the longer view in terms of how you invest your dollars that aren’t necessary in competition with current needs.”
The Conference Board expects “a more substantial shift in funding toward preparedness as more companies recognize how climate change is increasing the frequency, intensity and magnitude of natural disasters. These factors mean that increasing funding support for preparedness and resilience can not only pay economic benefits by reducing the impact of disasters overall, but it can also be particularly impactful in lessening the harm disasters cause to low-income populations.
As the report observes, “given stakeholders’ heightened sensitivity to broader social issues arising from the multiple crises of 2020, companies may wish to evaluate how their disaster philanthropy programs serve disadvantaged populations.”