Why 2016 is the year to shake up humanitarian funding

Some say the system to fund the humanitarian response to conflicts and disasters is broken beyond repair. Some say it just needs a tweak. But everyone agrees, global humanitarian financing needs to change. Because it's too important to fail.

That’s why, in May last year, the United Nations set up the High-Level Panel on Humanitarian Financing — to find ways to close the widening gap between humanitarian needs and the resources available to service them.

According to the U.N., around 125 million people in the world today are in need of some form of humanitarian assistance. The number of people dying in wars has risen dramatically during the past few years. More people have been forced to flee their homes than at any other time since World War II. The calamitous 5-year-old Syrian conflict is one of the major causes of the situation.

Last year, the budget of the International Committee of the Red Cross was at a record 1.6 billion Swiss francs ($1.58 billion). This year, it will rise again to 1.7 billion. This figure is 50 percent more than it was five years ago. But while global generosity has never been higher, needs are still outstripping means to respond.

Reporting last week in Dubai, the high-level panel unveiled a set of recommendations. They ranged from promoting development finance in protracted crises, to increasing the funding of new donors by ensuring their contributions get the recognition they deserve, and engaging the private sector to commit resources and skills.

To complement these recommendations, I believe the following actions also need to be taken in order to get humanitarian financing back on track for 2016 and beyond:

1. End the “truck and chuck” myth of humanitarian work.

Today’s armed conflicts are complex and can last for decades with people being attacked, displaced, and suffering a lack of basic resources, over and over again. Just look at Afghanistan and South Sudan as examples. We need to stop seeing such conflicts as temporary blips, where we simply truck aid in to deal with the short-term needs then, stop, and then do it all over again when the conflict flares up once more. We need to recognize such conflicts often have long term, structural, socio-economic causes — and we need to treat them as such.

2. Realize that in countries affected by chronic conflict, the distinction between humanitarian funding and development funding is artificial.  

People living through armed conflicts need infrastructure and services that will last, and the last thing on their mind is which budget line applies. To respond to people’s needs, humanitarian action has evolved from a temporary fix to a long-term safety net.

Humanitarian organizations like the ICRC, are often sustaining vital services like health, urban water supply, power systems and even prisons, over the long-term. But we are doing this on short-term humanitarian budgets. Moreover, as conflicts last longer, development gains in fields like public health and education are halted or rapidly reversed. With this in mind, the understanding of humanitarian assistance as an emergency stopgap, is obsolete.

3. Cut the bureaucratic strings that tie money down.

The relatively unpredictable flow of funds to humanitarian organizations and the bureaucratic strings often attached to them, can have a highly negative impact on an organization's ability to plan and execute programs effectively.

We need to be able to rely on predictable income flows to plan sustainable programs. Money that is not earmarked and has few conditions attached, is far more useful — and provides far better results. This means crucial aid can be given based on need — rather than being dependent on short-term media attention or the political interests of states.

4. Diversify funding sources.

To meet growing needs, the total size of the money pot must increase. But to prevent that pot turning into a bottomless pit, humanitarian agencies have an obligation to optimize current funding and seek innovative new sources of money, rather than relying solely on a few traditional donors.

That is why the ICRC is focusing on increasing funding from new sources. These include emerging donor states, as well as investments from business and individual investors that were so essential to us in our early years (the Red Cross was founded by a businessman).

5.  Energize funders by making them stakeholders.

One way we are seeking to engage the private sector and secure new sources of funding is by exploring so-called social impact bonds. This week, at the World Economic Forum, we are announcing the creation of the first ever “humanitarian impact bond.” It is worth $30 million and will be used to expand our physical rehabilitation services to thousands more people with disabilities in countries affected by conflict and violence. It is supported by an initial donation of $10 million from the Belgian government. This is a totally new “payments for results” funding mechanism that gives governments a tool for paying for what is actually delivered by their humanitarian partners in difficult and insecure places.

Every year we ask our donors to dig deeper. And every year, they gladly, generously comply. It is now up to us to find ways and means to forestall the day when they cannot — or will not. The consequences for people in war zones could otherwise be disastrous.  

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