Most funders typically distribute funding to advance their goals and support the community through grants. However, other ways to fund organizations and groups can be considered, including impact investments, fiscal sponsorships, and support for individuals.
The Center for Disaster Philanthropy (CDP) recently hosted a webinar, Beyond the Typical Grant: Alternative Ways to Fund Disasters, to help foundations, corporations, and individual donors explore non-501(c)(3) organizations and the different ways to provide support beyond traditional grantmaking.
CDP’s President and CEO, Patty McIlreavy, moderated the discussion, and panelists included: Baylen Campbell, Director of Community Impact, Invest Appalachia; Courtney Eskew, Director of Vetting and Grants Management, GlobalGiving; and Lita Ugarte Pardi, Programs and Knowledge Director, PEAK Grantmaking.
To set the stage, McIlreavy described why alternative ways of funding are so needed. Climate change, the COVID-19 pandemic, the movement for racial justice, and the rise of complex humanitarian emergencies worldwide are challenges that are not always predictable and have different time horizons, requiring funders to move beyond the status quo.
McIlreavy also shared that many organizations, movements, and individuals doing impactful work at the local level may align with a funder’s values and goals but do not have 501(c)(3) status. Additionally, funding to local organizations continues to lag. For example, in its 2022 Global Humanitarian Assistance Report, Development Initiatives found that from 2017 to 2021, direct international humanitarian funding to local and national actors halved from $603 million to $302 million.
Eskew described the value of a funder partnering with an intermediary, like CDP or GlobalGiving. Intermediaries possess the expertise and existing relationships with organizations that allow them to get funds in the hands of organizations that are local and community-based , even in challenging contexts. For example, GlobalGiving’s Ukraine Crisis Relief Fund leveraged pre-existing relationships with 100 organizations to distribute funds locally across the region. Eskew also shared how GlobalGiving granted to individuals during the COVID-19 pandemic through an IRS publication designed to assist people affected by disaster or hardship.
To make investments in under-resourced areas that often have been denied access to capital, Campbell shared about Invest Appalachia’s catalytic capital and impact investing tools applied to nonprofits, businesses, and individual entrepreneurs. Campbell said, “In communities like mine, in Central Appalachia, where extraction has caused intergenerational poverty and longitudinal environmental disasters, we're able to provide non-extractive financing that's community-aligned.”
Pardi encouraged funders to understand an organization’s fiscal sponsorship model and consider adjusting their due-diligence process, so it is right-sized given the organization and fiscal sponsor. For organizations, Pardi said it is important that they seek alignment between their mission and that of the fiscal sponsor.
The webinar panelists responded to questions provided by the audience, and McIlreavy concluded by sharing the following actionable thoughts from the conversation:
- Use a variety of funding tools, not only grants.
- Consider supporting non-501(c)(3) organizations.
- Fund locally.
Watch the full webinar about going beyond the typical grant at the Center for Disaster Philanthropy.