Too important to fail—addressing the humanitarian financing gap
High-Level Panel on Humanitarian Financing
Report to the Secretary-General
January 2016 :: 41 pages
[Excerpts from Executive Summary]
The world today spends around US$ 25 billion to provide life-saving assistance to 125 million people devastated by wars and natural disasters. While this amount is twelve times greater than fifteen years ago, never before has generosity been so insufficient. Over the last years conflicts and natural disasters have led to fast-growing numbers of people in need and a funding gap for humanitarian action of an estimated US$ 15 billion. This is a lot of money, but not out of reach for a world producing US$ 78 trillion of annual GDP. Closing the humanitarian
financing gap would mean no one having to die or live without dignity for the lack of money. It would be a victory for humanity at a time when it is much needed.
The UN Secretary-General has appointed a nine-person group of experts (“the panel”) to work on finding solutions about this widening financial gap. The panel identified and examined three important and interdependent aspects of the humanitarian financing challenge: reducing the needs, mobilising additional funds through either traditional or innovative mechanisms, and improving the efficiency of humanitarian assistance.
The panel’s work aims to help inform and shape the objectives of the World Humanitarian Summit (WHS) in Istanbul in May 2016. It is also highly relevant in the context of adopting the Sustainable Development Goals (SDGs)—only by focusing the world’s attention on the rapidly growing numbers of people in desperate need will we be able to achieve the SDGs…
…Improve delivery: a Grand Bargain on efficiency
The panel concurs with a widely shared view among stakeholders that systemic change in humanitarian aid delivery is needed in order to raise new money and use it more effectively. Greater efficiency will create a virtuous circle by drawing in more funding. Since the status quo is not an option, the panel calls on donors and implementing organisations to come together in a Grand Bargain. As part of that agreement, donors would not simply give more but give better, by being more flexible, and aid organisations would reciprocate with greater transparency and cost-consciousness.
The elements of a Grand Bargain include provision of more cash-based assistance, where appropriate, and recognition of the comparative advantages of local, national and international implementing organisations for delivery of services. To improve response time the panel suggests the creation of a repository of pre-qualified organisations to dispense with repeated screening of NGOs, as well as more work on strengthening local capacity.
The panel wants donors to commit to more multiyear funding and less earmarking, since flexible funding is the lifeblood of humanitarian operations. And donors should simplify and harmonise their reporting requirements, leaving aid workers more time to perform their life-saving activities. And we need greater transparency from implementing organisations so that everyone can “follow the money” on its journey from donor to recipient. A global data platform to provide open and transparent data would help reduce transaction costs and increase effectiveness.
By committing to joint needs assessments, such as those carried out in northern Syria and during the Nepal earthquake, humanitarian organisations would increase donors’ trust. True transparency is within our grasp thanks to digital technology and this should be extended to include communities receiving aid: humanitarian organisations can learn and improve by listening to the people they serve.
If we are to move towards a model of collaborative efficiency, the panel would like government donors and aid organisations to agree to a Grand Bargain. By doing so, they will clearly demonstrate a common commitment to the greater good.
The panel presents this report conscious that the implementation of its recommendations will depend upon the will of many to carry them forward. Panel members are committed to continuing to offer their assistance in the process of making these proposals a reality.
[Table, Excerpt from Grand Bargain discussion, p.24]
The panel recommends:
That by the World Humanitarian Summit donors and aid organisations work towards a collective roadmap for stretching available money to reach more people in need.
The main elements of a Grand Bargain are:
For aid organisations and donors to work more closely together towards:
…More financial transparency.
…More support and funding tools to national first responders.
…Scale up use of cash-based programming and more coordination in its delivery.
For aid organisations to commit to:
…Reduce duplication and management costs.
…Periodic functional expenditure reviews.
…More joint and impartial needs assessments.
…A Participation Revolution: listen more to and include beneficiaries in decisions that affect them.
For donors to commit to:
…More multi-year humanitarian funding.
…Less earmarks to humanitarian aid organisations.
…More harmonized and simplified reporting requirements.
Ms. Kristalina Georgieva, Bulgaria, Vice President for Budget and Human Resources, the European Commission
HRH Sultan Nazrin Shah, Malaysia, Ruler of Perak, Malaysia
Panelists in alphabetical order
Ms. Hadeel Ibrahim, the United Kingdom, Executive Director, Mo Ibrahim Foundation
Mr. Badr Jafar, the United Arab Emirates, Managing Director, the Crescent Group
Mr. Walt Macnee, Canada, Vice Chairman, MasterCard
Mr. Trevor Manuel, South Africa, Senior Advisor, Rothschild Group
Ms. Linah Mohohlo, Botswana, Governor, Bank of Botswana
Mr. Dhananjayan Sriskandarajah, Sri Lanka, Secretary-General, CIVICUS
Ms. Margot Wallström, Sweden, Minister for Foreign Affairs