Finance Case Study
Funding for humanitarian response is lagging behind the rising needs and current ways of working are becoming outmoded in many ways, adding further strain to the system. This has promoted growing support for innovation within the sector. In a few donors and a number of implementing agencies and private-sector organisations humanitarian innovation funds have been developed, jobs, teams and labs created, and innovations piloted. These small but significant initial steps need to be followed by a second wave of financial and non-financial support if the current humanitarian system is to be able to respond to the number of lives and livelihoods expected to be impacted by disasters in the coming years.
The Humanitarian Innovation Ecosystem Mapping Project, being carried out for DFID by CENTRIM at the University of Brighton, has the overarching goal of mapping and assessing the drivers, elements and process of innovation within the humanitarian sector, using an ecosystem framework and analytical approach derived from the field of innovation management. Studies focus on the shelter, cash-based programming, WASH and health sectors, aiming to provide an in-depth, comparative look at innovation within each sector and to situate these against an evolving interpretation of the Humanitarian Innovation Ecosystem. This innovation finance study seeks to understand the level of financing and support for innovation across the humanitarian system.
Through nearly 40 interviews, reviews of data from the other studies and secondary data analysis, a picture has been assembled of what is happening in the financing of humanitarian innovation. The report looks at the methodology, concepts and frameworks, before moving on to an overview of the sector. In the overview section, there is an outline of the financing by actor group, followed by comparisons with the private sector and social innovation sector. The next section gives an analysis of different actors to provide a flavour of current activity in the sector. The report then identifies 14 challenges that are impeding greater investment and support for innovation, and follows these challenges with recommendations targeted at the actor groups: donors, private sector and the UN, INGOs and Red Cross Movement.
The key finding is that the humanitarian system has made a start in funding innovation, but is still a long way from where it needs to be: although growing, funding for humanitarian innovation is low. Innovation funding by OECD DAC members is estimated at around US$37.5 million per year, the equivalent of 0.27% of their humanitarian response funding in 2013. This percentage would be exceptionally low in an industry that had little material consequence, such as paper milling. In an industry seeking to save and support millions of lives and livelihoods in the face of disaster, it is not exceptionally low - it is breathtakingly low.
Gray, I; Hoffman, K. Finance Case Study. CENTRIM, University of Brighton, Brighton, UK (2015) 38 pp.