Shaping the future of humanitarian financing

By Christina Bennett, CEO and Lucile Brethes, Head of Start Funds

Six years ago today, Christian Aid made the first alert to a new aid financing mechanism. The Start Fund’s first alert to food insecurity in South Sudan went on to disburse just over £300,000 to Action Against Hunger, Christian Aid, Plan International and Tearfund within three days of the alert. Originally conceived as an antidote to the limitations of the large pooled funds and traditional emergency appeals, in 2020 the Start Fund has come of age, a recognised pillar within humanitarian financial architecture and a force for transformation in its own right.

To date, the Start Fund has reached more than 14 million people, disbursing more than £61m. It has responded in 66 low-income countries to 262 humanitarian emergencies, including conflict, flooding, disease, drought, cyclones, earthquakes, wildfires and volcanoes.

At the time of this writing, Start Fund is gearing up to respond to the COVID-19 global pandemic by providing fast funding to frontline NGOs and community groups. We’re aiming to keep pace with the fast-spreading virus in places where public services are not in place or unlikely to cope.

What we’ve achieved so far

Speed and agility

Responses to disasters are often hampered by the lack of timely funding in the hands of first responders. The large and popular emergency pooled funds still typically take between 45 and 90 days to move money into crisis zones. The Start Fund provides rapid financing within 72 hours of a crisis alert, enabling aid agencies to respond in the first days of a crisis before other funding is available.

Rebalancing and gap filling

Public and private funding for crises is disproportionately channelled to high profile, large scale emergencies. And this, despite the fact that the impact of small scale, frequent crises often exceeds that of major headline-grabbing disasters. Start Fund enables responses to underfunded small to medium scale crises, as well as spikes in chronic humanitarian crises, and forecasts of impending crises.

Collective ownership

Start Fund is the first humanitarian pooled fund owned and managed entirely by civil society. Decisions about whether, when and where to use the Start Fund are made by a decentralised set of NGO peers and aid projects are selected by local committees working on the frontlines. Not only does this demonstrate collective action, but also that NGOs can work cooperatively – not competitively – when decisions are made at ground level and by those with the greatest understanding of needs on the ground.

Acting early and pre-emptively

The earlier funding is made available in a crisis, the more lives can be saved, suffering can be avoided, and costs minimised. Since 2016 the Start Network has been pioneering early action, initially through using the Start Fund to fund “anticipation” for crises such as flooding, heatwaves, conflict, displacement and epidemics. The availability of funding for early action enables Start Network members to act on forecasts of an impending crisis and support individuals, communities and organisations to prepare and reduce the likelihood of harm or loss. Start Fund’s focus on anticipation has paid off: since the beginning 31 anticipatory alerts have been funded. A recent external evaluation demonstrated that Start Network has enhanced the culture of early action in their organisation.

What’s next? A network of networks

Start Network’s vision is that of a network of networks, a fully distributed web of civil society groups working in crisis contexts that share risk, know-how and funds. The Start Fund, as a centrepiece in this vision, can help drive this vision in key ways.

Championing local humanitarian action

Start Fund still has some way to go in channelling funds directly to local responders, whose proximity and presence within crisis zones can mean faster and better access to the people affected and more chance of sustaining response in the long term.

Chief among the barriers is the inability to access international aid pots, whose financial and legal compliance requirements, including from crippling counter-terrorism legislation, are often beyond the ability of small, under-resourced and untested organisations to fulfil. Start Network has developed and is currently piloting a tiered due diligence system that enables local organisations to join the Start Network, and ultimately access resources.

Beyond access to international funding, the Start Network is also working to create a more balanced humanitarian aid system that shifts power and decision making closest to the front line. While the Start Fund has pioneered decentralised decision- making and project selection among its members, we need to be more ambitious and enable local organisations to raise and manage funds themselves.

To do this, we’ve partnered with civil society groups in five countries to co-create a system of ‘hubs’ to drive and manage local responses to crises (and are hoping to duplicate this in more countries). When they wish to do so, the hubs will set up and manage their own national funds, tailored to their needs.

Risk-pooling and risk-sharing

Over time, the Start Fund will become one of several financing instruments within a larger Start Network financing facility. This facility will be able to deploy funds at scale through a range of financing mechanisms tailored to the specific risks and needs. Critical to this vision, is the ability to move money seamlessly between crisis contexts so that identified risks can be dealt with as a network and funds made available and shared as risk profiles change.

Mainstreaming early action

And at a time when advances in science, risk modelling and our experience means that we can predict close to half of the world’s disasters, the Start Fund is able to resource activities that anticipate those predictable emergencies by resourcing activities that prepare communities for disasters before they happen.

The Start Network will continue to be at the forefront of advocating and empowering NGOs to act early, and in the future the funds will increasingly be released based on a risk financing and anticipatory approach, so that aid can be delivered early in predictable crises, reducing the impact of disasters even before they hit.

Growing the fund to respond to needs

The above priorities will inevitably put pressure on the Start Fund to grow. We’ve already seen funds depleted quickly as needs outweigh the capacity of the Start Funds during moments of high demand. As we bring more local members on board and enable them to access the fund, and as we encourage more and more early action, the needs and the capacities of our members to deliver urgent aid will continue to grow.

In 2019 we commissioned an external evaluation, which confirmed our ambition to grow the Start Fund to reach more at need communities. As a result, we aim to work with our existing donors, including Irish aid, DFID, Netherlands Ministry of Foreign Affairs, the German Foreign Federal Office, Jersey Overseas Aid and IKEA, and new supporters to grow the fund to 30 million in the next three years, building in more flexibility and automation to our decision making to be able to manage the fund at scale.

We are currently future-proofing this approach, by building a new COVID 19 fund within the Start Fund. We will do this by merging our anticipation and response ‘windows’ to encourage both types of actions in this fast-moving crisis while maintaining our niche of fast and flexible funding that focuses on gaps in response and underserved communities and geographies.

The current COVID-19 crisis shows us that the Start Fund is going in the right direction. It is demonstrating the value of early action to mitigate risks, risk pooling and flexibility across funds to ensure needs are addressed and the critical need for more localised responses, because local actors are the best placed to respond.

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