FUTURE HUMANITARIAN FINANCING: LOOKING BEYOND THE CRISIS

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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


FHF AT THE WORLD HUMANITARIAN SUMMIT EUROPE AND OTHERS CONSULTATION

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There is a whole discussion to be had on the Future of Humanitarian Financing and fortunately this has been the topic for the IASC for a long long time. We have in fact a Task team on Humanitarian Financing and for the past months they’ve had a series of discussions with experts on the ‘Future of Humanitarian Financing’ and I think they are ready to come out with a very excellent technical report.

Kyung-Wha Kang

Assistant Secretary-General for Humanitarian Affairs and Deputy Emergency Relief Coordinator (UN OCHA)


EMERGING THEMES FROM LONDON DIALOGUE EVENTS:

Future Humanitarian Financing aims to bring fresh thinking to address the growing problem of how we meet the financial costs to responding to humanitarian emergencies. The purpose of the initiative is to discuss the potential of new and emerging approaches to financing and investigate how these might support a more open and adaptive humanitarian endeavour as well as new models fit to meet the changing nature and scope of humanitarian crises.

In October and November, the Future Humanitarian Financing Initiative convened its first cross sector dialogues, bringing together over sixty experts from the Humanitarian, Development, Academic and Financial Sectors across two morning events to discuss emerging models including Development Impact Bonds, Crowdfunding platforms, Disaster Risk Insurance and the increasing role of the private sector.

It was clear from both events that a more open and inclusive humanitarian enterprise is needed and that the existing humanitarian architecture is exclusive of many important actors. During the second dialogue Dr Sara Pantuliano, Director of the Humanitarian Policy Group at the ODI provided participants with an overview of HPG’s research into the Changing Humanitarian Landscape, particularly the increasing importance (or rather an increasing recognition of the importance) of Rising Global Actors. Through discussion, many participants also reflected on this and the need to reconfigure the existing humanitarian system to reflect the full diversity of financing and responding actors emerged as a key theme in both dialogue events.

The case for more engagement with the private sector has been a topic of discussion in many forums on Humanitarian Financing and the London Dialogues was no exception. However what was clear from discussions in London is that it is not about more engagement, but rather the right type of engagement, that the key to possible future mechanisms of Humanitarian Financing. The private sector is not just a cash dispenser and Humanitarian actors, in their engagement with private sector actors, have not yet taken full advantage of opportunities to benefit from the expertise, capacity, resources and influence of the private sector. With this in mind there is a need to better understand the specific interests and comparative advantages of the private sector actors and determine areas or ‘shared value’ opportunities for joint ventures. Participants from both the Humanitarian and Private Sector also suggested that this topic needed to be approached with a sense of realism that has previously been lacking and that the sector needed to move away from generalised rhetoric around improving partnerships and be more realistic about working with the private sector and their ability to maintain a principled approach. As one private sector participant challenged ‘Do you really want to work with us?’

“Do you really want to work with [the Private Sector]?”

A Challenge to the Sector from a Private Sector Participant at a London Dialogue event, improved engagement with the private sector can offer a lot of potential both in terms of funding and efficiencies but Humanitarians must be realistic about the aims and objectives of private sector actors in order for such partnerships to work effectively.


A full summary of the London dialogue events can be found here along with summaries from Dialogue events held in Amman, Bangkok and Dakar.

The Future Humanitarian Financing Initiative aims to be an evolutionary piece of research, drawing on the expertise of experts from across different sectors and regions. To join the discussions please comment your reactions below, complete our polls, or email aneal@cafod.org.uk with any ideas or suggestions. You can also follow discussions on the Future of Humanitarian Financing on twitter: @FutureHF


AGENDA PUBLISHED FOR LONDON DIALOGUE EVENTS:

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Please visit our Dialogue Resources page for Agendas and other useful resources ahead of the Cross Sector Dialogue Events taking place in London on the 29th October and 3rd November


NEW POST: HOW TO FIND MONEY TO FUND AID – JUST PRINT IT

Are there lessons that can be learnt from the response to the financial crisis, that could be applied to help fund aid tomorrow?

Michael Metcalfe’s innovative idea to print money to increase overseas aid takes inspiration from the reaction of Central Bank’s to the financial Crisis, challenging the “sanctity of the money supply”. At the time, in order to reassure investors, Central Banks of the United States, United Kingdom and Japan created $3.7 trillion in order to buy assets and encourage investors to do the same.

Much like the UK Aid Match or corporate matching schemes, Metcalfe envisages a financial model mandating Central Banks to match government overseas aid spending up to a certain limit.

Print-Aid

Last year, just under $3 billion was needed to close the gap between humanitarian needs and actual funds received. If “print-aid” had been in place over the last four years (2009-2013) in USA, UK and Japan it would have generated an extra $200 billion in overseas aid. A negligible amount when compared to the $3.7 trillion created in response to the financial crisis.

We took a $3.7 trillion gamble to save our financial systems. And you know – it paid off, there was no inflation. Are we really saying that its not worth the risk to print an extra 200 billion for aid, would the risks really be that different? To me its not that clear. What is clear is the impact on aid.

Metcalfe argues that “print-aid” could provide humanitarian and development initiatives with at least 40% more funding. The risks of this money creation is quite modest but the benefits are potentially huge.

Is ensuring that adequate funding is available for overseas development and humanitarian assistance as simple as just printing money? Future of Humanitarian Financing is an initiative which will explore new models of financing humanitarian action and address questions such as ‘how can the humanitarian sector learn from innovation in the financial sphere’. To join in the dialogues press ‘Apply’ below and please visit our ‘About’ page for more information on the research and dialogue events.

APPLY


NEW POST: WHY RAISING MONEY FOR EBOLA IS HARD

90% of private funding to humanitarian response is received within 90 days of an emergency event

Without the money, without the supplies, without the people – the situation (in West Africa) is getting worse

http://www.npr.org/v2/?i=351515481&m=351850221&t=audio

Charities raised $1.4 billion to help rebuild Haiti after the earthquake. After the tsunami in Asia in 2004, organisations raised $1.6 billion. But when something like Ebola happens, so far, people look the other way.

NPR explores why it has been so difficult to raise money for Ebola and other disasters such as famine.

Until something is much more visible in the media it’s almost impossible to raise funds…you can’t raise money until people are actually starving.

Without a Galvanising moment:

90% of private donations made to humanitarian response are given in the first 90 days of a crisis. This implies that there needs to have been some event such as in Typhoon Haiyan or the Haiti Earthquake. The current Ebola outbreak in West Africa, in funding terms, in almost the complete opposite to the Haiti Earthquake. For a start (from an American perspective) West Africa is far away, but more importantly there has been no galvanising event, the spread of the disease has occurred incrementally (albeit rapidly and on a large scale). Furthermore as a medical crisis it is more difficult for people to comprehend and the pitch is not as optimistic. In Haiti, money was raised to rebuild – to make people’s lives better, in response to Ebola funding is needed to stop things getting worse. This money is not coming.

Without a Galvanising moment there is a need to create one artificially:

Centre for Disease Control: If nothing is done to slow down Ebola 1.4 million people will be infected with this disease

ByszXHLIgAAinMJThis figure may be a worst case and potentially unlikely scenario but grabs headlines and provides that galvanising moment that is ideal (if not necessary) to leverage high levels of public donations. Similarly declarations of Famine have this effect. However this does not provide for the most effective or efficient humanitarian response. According to the European Commission on Humanitarian Aid and Civil Protection (ECHO) every Euro spent on disaster preparedness saves 7 Euros in relief efforts. However people do not generally give to prevention and thus as a sector large-scale funding is only accessible when people are actually dying – deaths which could have been prevented had funding come earlier.

 

 

 

Private  giving from individuals, foundations and corporations is an increasingly important source of funding for humanitarian assistance. But how can these increases in private giving be leveraged to funding for disasters without a galvanising event? How can we encourage private donors to donate for preparedness and prevention of slow-onset emergencies.

Future of Humanitarian Financing is an initiative which will explore new models of financing humanitarian action and address questions such as ‘how can we raise money for future crises such as Ebola’. To join in the dialogues press ‘Apply’ below and please visit our ‘About’ page for more information on the research and dialogue events.

 

APPLY

 


 

WELCOME TO THE FUTURE OF HUMANITARIAN FINANCING

The Future of Humanitarian Financing is an initiative to bring fresh thinking and expertise from beyond the humanitarian sector to address the growing problem of how we, as a global community, can meet the ever increasing costs of responding to humanitarian crises. Traditional approaches to financing humanitarian response are falling increasingly short of the mark and despite an overall increase in spending on humanitarian response, the gap between funding and requirements continues to grow. The international humanitarian response system is stretched beyond its capacity. A decade ago, the international response system assisted 30-40 million people annually; by 2013 this had risen to 50-70 million. Out of the five appeals launched by the UN to respond to the five current major level three (L3) emergencies only one is fully funded. The ‘business as usual approach’ cannot continue if we hope to adequately and effectively meet the humanitarian needs of crisis-affected people.

The rising scale of needs, our collective inability to resolve protracted crises, and the interplay of new risks have led to a global deficit in the operational and financial capacity of governments and humanitarian organisations to respond. This deficit has highlighted the need for a change in the way we look at humanitarian crises

 

UN Office for the Coordination of Humanitarian Affairs, 2013

 

The Future of Humanitarian Financing hopes to address the problem of financing humanitarian action by exploring new models and approaches within and beyond the humanitarian sector. The initiative will bring together experts from diverse backgrounds including financial services, public sector management, marketing, science, ICT and academia, each with a different and unique perspective of financial models and humanitarian response, in a series of dialogues taking place in London, Amman, Bangkok and Dakar in conjunction with on-going online discussions, designed to investigate new and emerging models.

The dialogues will also inform a more radical reform agenda by contributing to the longer-term evolution of the humanitarian sector that will be explored at the UN Secretary General’s World Humanitarian Summit (WHS) in 2016. Exploring new and emerging models of financing humanitarian action which could be employed in the next few years will provide practical and applicable solutions to the current issues of humanitarian funding and also influence how the sector evolves to better meet the needs of people affected by humanitarian crises.  The outcomes of the dialogues will be packaged and communicated to influential policy-makers and will also feed directly into the Humanitarian Effectiveness and Innovation work-streams of the WHS.

In order to continue to effectively respond to humanitarian emergencies we need new ideas, collaborations, approaches, tools and resources. If you’d like to join this global dialogue then please register your interest on the cross-sector dialogues page or join our online discussion @futurehf.

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