Worldwide disasters are increasing in frequency and complexity. Similarly vulnerability to crises is likely to increase as the world population continues to grow, particularly in urban areas, increasing demands on food and water resources.
Last year (2013) a record $22 billion was spent on Humanitarian Assistance, yet even at these record levels of funding, under two-thirds of the humanitarian needs outlined in UN appeals were met.
Instead of focusing funding on reacting to crises more needs to be spent on preventing disasters from occurring in the first place:
In 2011 the world spent almost 40 times more dealing with disasters than preventing and preparing for them.
For every €1 invested in disaster prevention, €4 to €7 are saved in disaster response.
EU Commission for Humanitarian Aid and Civil Protection
Future of Humanitarian Financing is an initiative which will explore new models of financing humanitarian action and address questions such as ‘how can we best prepare for emergencies to save lives and money reacting to crises’. By bringing experts from beyond the humanitarian sector, including those involved in risk financing and insurance Future of Humanitarian Financing bring fresh thinking and expertise to this debate and influence the global agenda on humanitarian financing, providing practical and applicable solutions to address some of these growing problems. To join in the dialogues press ‘Apply’ below and please visit our ‘About’ page for more information on the research and dialogue events.
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.
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.
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
This 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.
The Future of Humanitarian Financing is an initiative exploring new models of financing humanitarian action emerging in, and beyond the humanitarian sector.
To inform the dialogue we’ve compiled some of the most recent and key reports and publications from across the sector exploring the current issues and trends in humanitarian financing and visioning the future of the humanitarian sector.
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.