Why independence matters
1st May has become an auspicious day for the Start Network - our Independence Day
This is big news: spinning off a new charity is the not-for-profit equivalent of an Initial Public Offering (IPO). Today we have become an independent Company and Charity that is owned by the Member NGOs. Until today we have been a consortium hosted by Save the Children UK. Until today we have seen ourselves as a start-up. Today we exited that incubation.
We decided to create an independent organisation back in September 2011, and since then the journey has been an arduous balancing act between finding funding, achieving the right scale, and building appropriate systems. Our struggle has existed because Start Network was initially created to deliver government funding for humanitarian projects that are implemented by the Members. The Members contribute funding annually to the Team, but this has not been at sufficient scale to provide all the infrastructure needed of an independent organisation, particularly in this era of regulation and compliance.
Start’s business model is based on a mixture of funding sources – member fees, administrative fees from running projects, and some direct budget support. We needed scale in the projects to deliver enough administrative fees for the new organisation, but that scale required infrastructure and sophistication and n industry position that we couldn’t yet afford. Caught in a catch 22, the Start Network struggled over many years to become independent.
Finally, it was a core unrestricted donation from the IKEA Foundation that proved to catalyse our independence. The IKEA Foundation was uncommonly strategic in an otherwise disappointingly conservative philanthropic world. IKEA Foundation invested in Start so we could build an independent organisation to deliver upon a vision for a transformed humanitarian system.
IKEA understood that Start’s independence will be significant - Start Network will be a new and bold form of organisation for humanitarian action. Here’s why:
- First, Start Network will be an aggregator for a large population of NGOs. Through a single relationship, donors and partners can access a vast network of organisations with an awesome operational capacity to respond to humanitarian crisis risks. Start Network Members employ over 250,000 people who provide relief and development assistance to over 350 million people per year in 200 countries and territories. This provides donors with unprecedented efficiencies with low transaction costs through a single contract. Moreover, Start is a network that manages the distribution of funding transparently, accountably, in compliance with all regulations, and in a way that the Member NGOs accept.
- Second, Start will be a broker of ideas and partnerships. The staff of this new organisation act as process facilitators to help the Members form partnerships around specific crisis response opportunities. Those partnerships are facilitated by Network infrastructure – a common due diligence system, agreed standard operating procedures, and personal relationships. The new Start Network organisation will broker ideas as well.
- Third, Start Network will be a laboratory for experimentation and scaling new ideas. For the Member Agencies, Start will be a ‘pre-competitive space’ for high-risk, or high-cost experiments of benefit to the entire humanitarian sector. In the past we have developed and tested ideas for new business models for humanitarian aid using insurance and new digital solutions for increased NGO legitimacy such as blockchain-based cash transfer solutions and a transparent real-time data portal for the Start Fund.
- Fourth, Start Network will provide ways to shift how resources are allocated to front-line and local humanitarian crisis responders. Scale will bring opportunities for creating new incentives and processes that will shift power to a more localised humanitarian system. As the new organisation catalyses the transformation of the Network from a single Consortium to a network of local associations, thousands of local organisations will be able to join and participate in the construction of new financial products that are triggered locally.
By providing these and other services, the Start Network will perform a critical function for an embattled and threatened community of civil society organisations in the second decade of the 21st Century. Populism around the world is driving governments and people inward, in fearful and fragmented conversations. This is dangerous in an era of global scale crises like climate change, species extinction, pollution and geopolitical competition over dwindling resources. Global scale challenges require collaboration on a global scale. Yet populism is pushing our governments in the opposite direction. Humanitarian action and NGOs reach across boundaries and divisions to provide solidarity and help. By providing humanitarian assistance, NGOs demonstrate humanity in a time of inhumanity. This is leadership in a world that needs it.
In other words, this new Start Network organisation will provide global scale to local organisations. This could enable NGOs to remain small and locally relevant, while accessing the advantages of global scale such as funding, knowledge sharing, compliance and reporting.
Start Network is unique because it is three things in one: a vision for a global public good needed in a turbulent world; practical solutions that deliver upon that vision; and the delivery of practical humanitarian aid every day. This is unique and special. Tangible day to day operational deliver while at the same time offering a vision, resources and now a legal structure for change.