This page provides a summary of discussions from the Future Humanitarian Financing (FHF) cross-sector dialogue hosted by the International Council of Voluntary Agencies (ICVA) in Bangkok on 24th November 2014.

Emerging themes

  • The private sector and in particular private donations from the rising middle classes are anticipated to be a major source of financing for meeting the cost of post-crisis response in the region in the future.
  • Economic growth and development in the region corresponds has been matched in a number of countries with rising domestic capacity and intention to direct humanitarian response. This trend is rapidly changing the demand for and added value of international humanitarian actors in the region. There is a clear need for international humanitarian actors to adapt context appropriate modes of coordination, technical and financial support to reflect these new realities.
  •  Innovative approaches to financing civil society organisations have emerged across the region and are already relatively mature and often involve partnership with and approaches from the private sector. There is much that civil society in other regions could learn from approaches to sustainable financing.
  • The analysis and characterization of financing needs represented at the global level in the UN’s coordinated appeals do not resonate with experiences at the regional level and needs analysis does not capture the full range of financial contributions in the region and therefore may be over-stating financing needs.
  • There is a need for a clearer definition of what constitutes a humanitarian problem that requires humanitarian financing and modes of response. It is not appropriate or desirable to support protracted displacement crises for example based on unpredictable annual appeals for humanitarian funding and these types of needs may need to be re-allocated to the responsibility of government and development actors.
  • Securing resources to sustain a standing-response capacity which can be called on in times of acute need is extremely challenging.
  • There is insufficient attention paid to driving greater efficiency in international humanitarian response including a lack of investment in generating evidence on what approaches are effective in terms of improved humanitarian outcomes and greater cost-efficiency.
  • International funds increasingly favour larger organisations in the interests of reducing transaction costs and time for donors. This may be distorting the evolutionary dynamics of the system and compromising the survival of small and medium-sized organisations.

The following sections elaborate specific major discussion themes examined during the dialogue event, grouped by emerging theme.

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Context appropriate response

In South-east Asia there are growing concerns about the negative impact of traditional international humanitarian responses where local markets are flooded by funds, where local capacity is disregarded (potentially undermining the responsibility of states to respond) and where an influx of foreign funding can lead to accountability crises for governments. In the Philippines, for example, the local media stimulated public debate questioning how international funds for the Haiyan response had been spent, causing considerable political problems for the government who was in this instance incorrectly assumed to have been directly in receipt of the funds.

The analysis and coordination tools we have are not adequate to capture the full range of resources people use to meet their needs. In particular, financial tracking and gap analysis do not include the full range of financial flows addressing humanitarian response and therefore may over-state the needs and under-represent the contribution of a range of actors. Remittances and gifts in kind are thought to be an extremely important and poorly recorded or understood financial flow to meet humanitarian needs in the region.

Coordination structures and processes exclude a range of actors, including the private sector, often on the basis of differing interpretations of the need for principled response. A tiered approach to engagement and participation may be useful to broaden participation whilst maintaining the core principled character of response.

Nationally-led response

While there are many variations in capability, there is significant and growing capacity for national actors to lead, finance and implement humanitarian response. The Hyogo framework has been an important stimulus to these processes. In several of the large disasters in the region in the last five years – such as flooding in Thailand in 2011 – international actors were not requested to assist with the response and in several major economies, response is habitually entirely domestically-led.

The standard package of coordination and fundraising for humanitarian response is considered inappropriate and politically unpalatable in some contexts – for example the cluster system and UN funding appeals have not been welcomed by the government of Pakistan after they were established to respond to large-scale flooding in 2010. In the response to typhoon Haiyan in the Philippines in 2014, keen to prove the concept of the L3 package of response protocols, international actors may have over-played their hand and attempted to provide too much assistance with too much fan-fare. In future responses, the government of the Philippines is expected to prefer a much more low-key international role (as seen in Typhoon Hagupit in December 2014).

The added value and credibility of international humanitarian actors in the region is changing rapidly therefore in relation to growing domestic capacity and there is a pressing need to adapt modes of assistance to work more effectively as technical partners supporting domestically-led response.

Regional bodies have been much touted as major players in humanitarian coordination and response in the region and humanitarian actors including OCHA are already engaged in providing technical support to ASEAN. However, financial support to the humanitarian capabilities of ASEAN do not yet match the ambitions of technical staff of the organisation and we should moderate our expectations to a longer-term timeframe noting that other regional organisations, such as the EU have developed coordination, financing and response capabilities over a period of decades rather than years.

Accessibility

Local and national NGOs are often not sufficiently included in coordination processes and financing opportunities. There is a need for donors to look for creative approaches to develop new mechanisms to channel funds to local and national NGOs whilst retaining requisite levels of fiduciary control and respecting the often limited capacity of donors to administer large numbers of small grants. There is a need for a long-term financing solution to support capacity-building of domestic civil society organisations that is not in competition with humanitarian response funding. What good capacity-building looks like and who should define this however is an unresolved matter. There are very real competition dynamics between local and international NGOs which are rarely aired and addressed. Nationalised international NGOs are considered contentious by some actors in having an unfair advantage in access to international resources, technical support and brand recognition vis-à-vis more authentically home-grown NGOs. Where civil society organisations have showed a high level of coordination and self-organisation – such as the Consortium of Humanitarian Agencies in Sri Lanka – they have proved more successful in advocacy and negotiating terms with donors.

Insurance is expected to be a critical element of domestic financing response capabilities but there are currently a range of problems in achieving scale in the absence of subsidy and in complementing insurance with effective regulation and investments in risk reduction to reduce risk and increase affordability of insurance. While humanitarian actors understand in principle the value of insurance, it is less clear whether they have a role in supporting the expansion of disaster risk insurance in the region.

Private sector

15752016377_8b73f5204e_oIn the context of limited bilateral international funds and robust economic growth in many Asian countries, leveraging private sources of finance has been a major growth area for civil society organisations and businesses. In Bangladesh and India there are many examples of social entrepreneurship where organisations combine for-profit activities with the provision of social benefit goods and services. Supporting organisations to develop their own sustainable business models may be more effective in the long-run than providing ad hoc and unpredictable emergency response funding.

There is an established tradition of corporate engagement in relief, recovery and development in the region with several long-established platforms. The Philippine Business for Social Progress platform for example was established in the 1970s.

Employee engagement and giving, which may be matched by the employer, is significantly increasing the value of corporate contributions and is anticipated to be one the major areas for growth in ‘corporate’ giving. But yet coordination mechanisms for capturing these contributions are limited.

There are un-explored opportunities to develop efficiency gains in procurement and business practices, in which private sector actors could play a key role, but there is currently a lack of leadership from the humanitarian community to drive forward an efficiency agenda.

The willingness of international humanitarian actors in particular to develop partnerships with private sector actors is limited due to suspicion around profit motives, cultural differences, differences of opinion around principle and a limited capacity among humanitarian actors to comprehend private sector motivations and practices.

 

About the Future Humanitarian Financing Initiative

FHF is convened on behalf of the Inter-Agency Standing Committee (IASC) task team on humanitarian financing and is led by a steering group comprising CAFOD, the UN Food and Agriculture Organisation (FAO) and World Vision and funded by the Government of Germany and FAO.

The purpose of the FHF initiative is to discuss the potential of new and emerging approaches to financing and investigate how these might support both a more open and adaptive humanitarian endeavour as well as new business models fit to meet the changing nature and scope of humanitarian crises.

The FHF initiative will follow a multi-stakeholder exploration of the potential and implications of financing approaches used outside, and at the margins of, the humanitarian sector – including the opportunities and risks these pose to the key actors and current modes of humanitarian response.

Dialogue events were held in London and key centres of regional humanitarian coordination including Amman, Dakar and Bangkok, with a final synthesis to be held in Geneva in January 2015.

Expected outcomes of the FHF initiative include:

  • a more robust understanding within the humanitarian community of the characteristics and comparative advantages of alternative financing approaches – and their potential to address humanitarian needs;
  • a set of recommendations for the IASC Principals and members that will constitute an agenda for research, experimentation, adaptation and engagement with emerging financing approaches as well as linked recommendations proposing adjustments to existing financing approaches;
  • the beginnings of an expanded collaborative network of humanitarian financing actors, which may be developed and sustained beyond the lifetime of the FHF initiative.

 

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