DOCUMENT TAGS Risk Financing
ANALYSING GAPS IN THE HUMANITARIAN AND DISASTER RISK FINANCING LANDSCAPE
19 December 2019
A global mapping of humanitarian and disaster-related financing in the preceding paper has highlighted the range of flows received by countries experiencing crisis. Whilst this has demonstrated a varied landscape of financing mechanisms, further analysis has also drawn attention to the potential gaps in the current humanitarian system. The following paper explores such gaps between the global humanitarian caseload and existing financing flows along the dimensions of predictability, severity and timing, in order to understand the potential for a new risk finance facility for NGOs.
The Start Network is embarking on an ambitious design process for the Start Financing Facility (SFF); envisaged as the future financial infrastructure for the network. The long-term goal is for the SFF to incorporate existing Start Network funding mechanisms as well as new national and global instruments to provide a continuum of funding that will enable frontline humanitarian actors to better support communities at risk.
To support the design of the facility, Start Network commissioned the Overseas Development Institute (ODI) to conduct a mapping of global disaster risk financing and humanitarian funding streams. The study, showed there are significant gaps in the current financing system – gaps that the Start Network can fill as it is already effective at channelling funding in this way. The three gaps relate to:
- Predictability - Analysis of previous UN appeals suggests that at least 55% of crises are somewhat predictable. However, funding released for early action is estimated to be equivalent to less than 1% of the UN appeals funding, channelled to these crises.
- Severity - Smaller crises affecting less than 1 million people make up the vast majority of natural hazard-related disasters. From the information available, between just 9% and 32% of humanitarian assistance went to countries experiencing ‘forgotten’ or ‘under the radar’ crises. For those countries most affected, needs clearly surpassed humanitarian funding
- Timing - Over 90% of humanitarian funding is allocated to response, versus less than 1% to anticipation, 3.8% to preparedness, and 5.5% to recovery and reconstruction. Despite growing evidence of the benefits of investment in preparedness and early action.
Read more in the paper below.
This paper summarises and extract the most relevant findings from these three papers, and lays out some of the potential implications for the design of the SFF. These are preliminary findings only and will be complemented by country-level consultations to surface field-level and members’ perspectives on the needs and niche of the SFF.
The first paper attempted to answer this by conducting a summary mapping of financial flows to humanitarian crises, by types of context, recipient, sector and other parameters. This also included a survey of key disaster risk financing and wider funding flows that may be relevant.
How does the Start Fund case-load compare to the wider humanitarian financing landscape? This question was addressed by analysing the database of over 300 alerts to the Start Fund, along the three dimensions outlined above. The intention was to identify the extent to which the Start Fund caseload mirrors, or differs from the global humanitarian gap analysis.