START Network Annual Conference: Humanitarian funding is not fit for purpose

The START Network’s Annual Conference on 11th May 2016 brought together 250 senior representatives from some of the world’s largest civil society organisations, multilaterals, and governments, as well as innovators, opinion-formers and other stakeholders concerned with connecting people in crisis to the best possible solutions.

START

Three strong messages came across over the course of the day:

  • Humanitarian funding is not fit for purpose
  • Humanitarian finance is changing
  • Community engagement is essential to humanitarian action

This blog post will deal with the first point: why the humanitarian funding system is not fit for purpose.

One of the main, repeated messages from the START Network Annual Conference is that the current humanitarian funding system is not fit for purpose. This is due to multiple reasons, and has become an increasingly urgent challenge as the scale and impact of crises grow. The way the system is currently set up cannot continue and unless it is fundamentally changed, will become increasingly problematic in the face of climate change, and demographic challenges expected in the future.

Not enough funding

The amount of financial aid available is not enough to tackle the problems faced by humanitarian system. There is a gap in the humanitarian system – 38% of the needs identified in humanitarian situations go unmet. The world spent $24 billion on international humanitarian response in 2014. This seems like a lot, until you compare to the $26 billion chewing gum industry (2012).

The world spends more on chewing gum than on humanitarian aid.

Funding is too restrictive

The funding available is too restrictive – the majority of funding is sourced from a limited number of big controllers, leading to asymmetrical power dynamics. These large donors are increasingly placing restrictions and stipulations on what the funding should be spent on. This leads to two main problems.

The first is that this dynamic does not reflect the needs on the ground. Often, the needs of those affected will not be known until the responders are on the ground and can assess where the gaps are. Increasingly, the funding stipulations restrict what the money can be spent on, often resulting in providing unnecessary assistance, and leaving a gap where needs are unmet.

The second is that the humanitarian system is becoming crippled by “log-frame-itis”; the focus has shifted to chasing donor funding and measuring “success” – creating destructive competition between non-governmental organisations (NGOs) rather than collaboration, and focusing on outputs rather than outcomes. In addition, these funding opportunities are disproportionately skewed towards larger, international NGOs (INGOs) and rarely make it to the local level, or only a small proportion of the funding trickles down the local level.

Lack of local funding

The top down focus of humanitarian finance often means INGOs get the bulk of funding, whilst local NGOs receive very little. The figures speak for themselves: in 2014, only 0.2% of Overseas Development Aid (ODA) went to local governments and NGOs.

$1 in every $500 of humanitarian aid are spend on local actors

This disproportionate division of funds often means less engagement with local communities and it is these local NGOs that have valuable resources and insight into the crisis situation. These local NGOs have often been working within communities over a long time frame compared to INGOs. They know the local context and have developed and already established good relationships with communities. The distribution of funding is therefore missing a huge opportunity to engage with these well-placed and experienced local actors to bring about effective delivery of aid.

Funding focuses on response

It is well-known that investment in disaster risk reduction (DRR), development, and prevention schemes pre-crisis saves not only lives, but also the amount of funding required post-crisis in response. And yet, the humanitarian funding system is almost entirely response focused. Convincing donors to provide funding before an emergency, despite the evident need, still remains a challenge in the humanitarian sector.

For each dollar spent on disaster preparedness, an average of four dollars is saved on disaster response and recovery

Time for change

We are not learning our lessons; very little has changed in the last decade. The Tsunami Evaluation Coalition report requested a fundamental reorientation in humanitarian funding, and yet the same problems experienced in the 2004 tsunami were repeated in the 2014 Ebola crisis.

The issues raised by the 2016 START Network Annual Conference also went on to explore the changes that are already taking place in the humanitarian funding system, and what else is required to shape the humanitarian funding system so that it is fit for purpose.

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