Future Humanitarian Financing is an initiative to bring fresh thinking and expertise from beyond the humanitarian sector to address the growing problem of how we meet the financial costs of responding to humanitarian crises.
The scale of needs and financing requirements in 2014 is extraordinary. And its not only that there are more crises, but some of the largest ones are in extremely difficult environments – Syria, South Sudan – where the costs of response are high.
By July 2014, requirements per targeted beneficiary in the UN’s coordinated appeals stood at US$204, up from US$168 in 2013.
While the scale of crises in 2014 may be exceptional right now, high-levels of humanitarian needs may not be unusual in the future. In the future we can expect an increase in small-scale crises – as well as large crises with complex, compound and far-reaching impacts. Increasing Urbanisation and Population Growth, compounded by the effects of climate change will potentially strain humanitarian resources even further.
Two major scenarios:
- Response where international resources and capacities work in cooperation to support and complement domestic actors. Often in response to natural disasters, disease outbreaks and man-made disasters such as industrial accidents.
- Humanitarian response in the most contested and difficult places, such as Syria, Somalia, South Sudan, Afghanistan, Democratic Republic of Congo, where independent and impartial actors may be uniquely placed to respond.
The System is not well configured for its primary purpose and is not structured to fund its new ambitions of preparedness through to recovery. In 2012 just 6% of funds were spent on emergency preparedness and two-thirds of all spending was concentrated on long-term recipients but still disbursed on an annual and unpredictable basis.
Changing cast of actors
The origins of modern humanitarian action arose from European battlefields of the late nineteenth century.
The ‘system’ which has evolved and currently comprises the international humanitarian enterprise evolved in the latter half of the twentieth century. And a system of coordination established in 1991.
There is much to commend this system, but there are many existing challenges and many areas in which the old approaches, models and actors no-longer reflect our current challenges. Growing recognition of need to work differently, to develop a more open and adaptive system.
Cast of responding and financing actors is changing rapidly. Growth in MICs including the capacity and intention of governments to lead and coordinate response. People are globally connected and change happens rapidly.
Growing role of the private sector: Philippines response more than half of all assistance provided by the private sector.
Financial flows to Disaster Affected Countries:
There is plenty of money. Humanitarian assistance is tiny compared with the full range of domestic and international resource flows, even in the most crisis-affected countries.
Global changes have brought great opportunities as well as challenges.
Private sector in crisis-affected states: more than half of response to typhoon Haiyan from private sector – in particular in response to the Ebola Crisis.
Leveraging new sources of private funding through web-based social activism.
Insurance against disaster risks increasingly technically feasible in many developing countries
Governments have far greater commitment and capacity to respond and Non-traditional donors playing growing role.
Outside of our existing experience:
New forms of structuring finance: impact investing, Alternative uses of insurance including insuring humanitarian organisations themselves against peak demand, and levies and taxes.
More than half the world’s population lived in a country affected by a major disaster or conflict in 2012, the cost of crises is in fact a common concern.
How do we promote and enable shared responsibility for responding to crises across all of these different groups?
How do we enable affected citizens, their representatives and networks, including civil society organisations, diaspora and governments, to better withstand the financial costs and shocks of disasters? How could we use communication technology, forecasting and financial products and services including banking, transfer and insurance to do this?
Can we enable those concerned to engage better – quicker, more reliably and more cost effectively, and can we use their influence as advocates better? How could we use new communication and financing technology and platforms to do this?
Can we strengthen the sense of duty or obligation to respond, particularly among governments? That might increase the predictability of the financing response?
How do we engage those who are currently not contributing? How do we communicate, inform and educate? How do we provide channels through which they can engage? How do we make the best use of their unique capacities and comparative advantages? How do we bring them closer towards being concerned or even feeling a sense of shared responsibility and duty to respond?
The Future Humanitarian Financing Initiative hopes to harness collective expertise from a multitude of professional sectors and experiences to vision the Future of Humanitarian Financing. To join the dialogue and influence the research we’d be interested to know what mechanisms those within and outside the Humanitarian Sector believe have the greatest potential to Fund Aid Tomorrow. To participate fill out the poll below and we encourage further suggestions. If you have more detailed information about any of the mechanisms listed or concerning any of the concepts above please contact firstname.lastname@example.org