Future Humanitarian Financing: Looking Beyond the Crisis

The Future Humanitarian Financing Initiative launched it’s flagship report ‘Looking Beyond the Crisis’ this week.

In March 2015, the UN appeals to address humanitarian crises across the world reached $18.7 billion, figures that are likely to rise given the current humanitarian caseload. The costs of delivering humanitarian aid are also rising, up from an estimated $149 per targeted crisis-affected person in 2012 to $237 in 2014. The humanitarian financing gap in 2014 is estimated to be almost USD 8 billion. These challenges provided the backdrop for a series of Future Humanitarian Financing (FHF) cross-sector dialogues held in Amman, Dakar, Bangkok, London and Geneva in late 2014 and early 2015. Individuals from within, on the margins and outside the humanitarian system at an international, regional and local level were brought together to debate and propose solutions to the current challenges in financing response to humanitarian needs.

Looking Beyond the Crisis - new report by FHF initiative
Looking Beyond the Crisis – new report by FHF initiative

The FHF report Looking Beyond the Crisis (published jointly by CAFOD, (Caritas England and Wales) the UN Food and Agriculture Organisation and World Vision as a contribution to the IASC Humanitarian Financing Task Team’s 2014 work plan) represents an effort to draw on the insights and spirit of these dialogue events, incorporating emerging areas of consensus as well as additional research and targeted interviews with experts, to provide a comprehensive analysis of the state of the humanitarian financing sector.

The report envisages a fundamental and ambitious shift in the humanitarian business model. Humanitarian actors need to focus not only on meeting humanitarian needs today but work towards a future in which, wherever possible, international humanitarian response is unnecessary or exceptional and the majority of needs are met by local actors. To achieve this vision, the ‘Looking Beyond the Crisis report proposes a radical global agenda to engage and enable a far wider variety of actors in meeting the costs of managing risks, of responding efficiently to crises and of meeting post-crisis needs as a shared responsibility and as a global public good.

Transformational changes in the humanitarian business model envisaged during the FHF dialogue process include:

  •  Re-balancing the division of labour to free up limited principled humanitarian financing and response capacity and to collectively share in the burden of meeting an increasing humanitarian caseload.
  • Prioritising nationally-led response by investing in building sustainable domestic capacity to respond and removing barriers to access to flexible humanitarian funding for local and national actors.
  • Embracing diversity, reconfiguring the existing humanitarian system to reflect the full diversity of financing and responding actors particularly regarding Islamic actors and finance and the private sector.
Creating a Shared Responsibility
Creating a shared responsibility and capacity to meet the cost of crisis response: One of the report’s main proposals is to re-balance the division of labour between Humanitarian and other actors

The report also puts forward important recommendations on systems upgrade to the humanitarian system that move towards an enterprise rooted in anticipation, transparency, research, experimentation and strategic collaboration. These include:

  • Improving anticipation and analysis, with proposals for anticipating funding requirements, quantifying and communicating requirements, tracking and monitoring funding.
  • Upgrading the architecture, and enabling a more efficient division of labour, bridging liquidity gaps, making provisions for ‘peak demand’, and investing in nationally led response.
  • Improving efficiency, by managing recurrent costs and moving towards multiyear funding commitments for implementing actors, particularly in protracted crises.
  • Reducing transaction costs, by improving business practices, streamlining current humanitarian sub-contracting and where possible harmonising reporting.
Addressing Peak Demand
Major Crises drive peaks in financing demand and may divert funds from other crises. One suggestion made by the report is to explore the potential of a global catastrophes contingency fund financed by alternative and additional funds including levies as well as donor-financed risk products

Follow the link below to read the full report and a full list of recommendations:

 READ THE REPORT

EXECUTIVE SUMMARY

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