How to fix the funding crisis for humanitarian emergencies

19 January 2016
Articles and blogs
Depending on who you ask, the international emergency aid system may or may not be broken. But everyone agrees it is broke. In 2015, record international emergency appeals met with record shortfalls in funding. $10 billion – or almost half – of all of last year’s emergency programmes were left unfunded.

The UN Secretary-General, Ban Ki-moon, might now have the answers to this problem. After months of deliberation by its nine eminent members, the High-Level Panel on Humanitarian Financing launched its much awaited report, ‘Too important to fail’, on Sunday. But will their recommendations plug the funding gap and fix the system?

Maybe. The report is, for the most part, an amalgamation of many largely good - some great - ideas that have been in the mix for some time. For example, the report echoes another High-Level Panel’s call for scaling up cash-based programmes, which currently only account for 6% of humanitarian aid, despite the myriad of proven benefits.

What’s different is that the politics of the moment might give the ideas more high-level airtime. In the run-up to the first World Humanitarian Summit in May 2016, donor countries and aid organisations alike are searching for ways to #ReshapeAid.

Grand Bargain or repeat platitudes?

At the report’s core is the idea of a ‘Grand Bargain’ between donor countries and aid agencies. Donors will offer agencies more funding, on more flexible terms. In exchange, agencies will commit to making the money go further and be more open about how they spend it.

It’s an enticing idea, but how feasible is it in practice? As far back as June 2003, all of the major donors committed to becoming more generous and flexible ‘Good Humanitarian Donors’ (GHD). But we’re still waiting to see most of the GHD principles put into practice. It is also worth remembering that the big UN agencies that spend over half of donors’ money have been under pressure to be more efficient and transparent for years – to little avail. The report fails to outline how donors and agencies will be held to account – and importantly, by who.

It’s also not clear which aid agencies and donors will sign up to the Grand Bargain. If big international NGOs aren’t included, will the system become even more UN-dominated? What about private sector and local organisations? And while the report gives due recognition to ‘new’ donors such as the Gulf states, they are unlikely to sign up to a Grand Bargain which would lead to even less visibility for their contributions.

Innovative financing

The panel recognises that new donors or the private sector alone cannot fill the funding gap, so puts its weight behind a range of alternative funding mechanisms. Such measures include better use of disaster insurance and Islamic social finance, such as zakat, the obligation for Muslims to give a proportion of their wealth to charity. Another key idea is for countries to add a small ‘solidarity levy’ of a few dollars to airline tickets or fuel which would then fund humanitarian projects.

These ‘innovative financing’ ideas will certainly help but they won’t solve the problem. I was disappointed that the panel did not recommend a more reliable humanitarian funding model similar to what keeps UN peacekeeping afloat. UN Member States share the cost of peacekeeping operations through a sliding scale of ‘assessed contributions’, which are agreed in advance of crises to enable the UN to respond rapidly. Fundraising for humanitarian crises, however, only starts after the disaster or conflict happens.

Shouldn’t we also have money in the humanitarian coffers ready-and-waiting for when the next crisis hits? Morally speaking, this is a global responsibility equal in importance to peacekeeping. Using the WHS to generate political momentum on this – and tying it to the Grand Bargain – will be essential to overcome resistance from those countries that would end up paying more, or those that are sceptical that the UN and wider system can reform sufficiently.

No silver bullet but a good start  

The report has put some good ideas on the table – some with greater potential impact than others. I hope this doesn’t lead to just another exercise in trumpeting major attempts at change (without giving them enough political backing to make them stick), while just picking the ‘low-hanging fruit’, which will have little impact at scale.

It’s time to get humanitarian financing right. ‘Too important to fail’ is no blueprint on how to plug the humanitarian funding gap, but it’s as good an outline to work by as any and the political space has never been more promising.