Humanitarian funding: What were 2016’s key trends?

Global spending in response to humanitarian crises reached an estimated US$27.3 billion in 2016. Our Global Humanitarian Assistance Report 2017 provides detailed and comprehensive analysis of what’s behind this. Here are four key trends in where the money comes from and how and where it is delivered – and what this means for current and future funding.

A slowdown in global humanitarian funding

It’s remarkable that in 2016 international humanitarian funding grew for the fourth consecutive year, but striking how this growth slowed. Between 2015 and 2016, funding rose by just 6% compared with increases of 12%, 21% and 18% in the previous three years.

Why this relatively modest rise? It certainly wasn’t driven by a lack of need, if last year’s 40% funding shortfall for the UN-coordinated humanitarian appeals is anything to go by, but it may be due to the nature and profile of crises. 2016 was a year of protracted and slower-onset crises – including ongoing conflicts and the effects of El Niño. Previous years’ increases were associated with major escalations in the Syria crisis and rapid-onset disasters including the Nepal earthquake and the Ebola outbreak.

Global humanitarian funding is the sum of individual donors’ decisions, and while some gave more in 2016 many levelled off or gave less. Only four of 2015’s ten largest donors of international humanitarian assistance increased their contributions, with Germany showing the largest rise.

So will 2016 mark the start of a further global funding slowdown? That will depend in part on what crises unfold in the rest of 2017 and on political and economic shifts in donor countries. With almost a third of 2016’s international humanitarian assistance coming from the US, the future looks uncertain.

Decreases from the Middle East and a small rise from private donors

Looking beyond the major OECD Development Assistance Committee donors, funding from Gulf donors fell in 2016, while that from private donors showed a small rise. This suggests a need for fresh thinking on how to “increase and diversify the funding base” to fill the humanitarian financing gap.

Donors in the Middle East had reported a 425% funding rise between 2011 and 2015, prompting hopes that this trend would continue. However, in 2016 levels fell by 24%, driven by major decreases from Kuwait, Qatar and Saudi Arabia.

Private funding (from individuals, trusts and foundations; companies and corporations; and national societies) tends to make up about a quarter of international humanitarian assistance. In 2016 this funding saw an estimated rise of just 6%, compared with an unusually sharp increase of 26% the previous year.

Direct funding to local and national responders remained low

The mission of the Grand Bargain, agreed at last year’s World Humanitarian Summit, is to make humanitarian financing more effective and efficient. This week, donors and agencies met in Geneva to take stock and agree next steps in implementation. With 52 signatories and 51 commitments, progress has been patchy in this first year.

Increasing support and funding to local and national responders is one of the most high profile of the Grand Bargain’s ten workstreams. Our analysis shows that national and local responders directly received just 2% of funding reported to the UN Office for the Coordination of Humanitarian Affairs Financial Tracking Service in 2016.

The Grand Bargain’s localisation commitment came in response to calls for a profound change in the status quo. But while committing to provide 25% of humanitarian assistance to local and national responders “as directly as possible” by 2020 shows a clear intention, it’s raised thorny questions that are still under discussion: what does “as directly as possible” mean, and who counts as a national or local responder?

Crucially, while counting what these responders received directly is important, we can’t yet know how much they received indirectly, passed through from donors via other organisations. Systematic traceability and an eye on quality and quantity of funding is needed if localisation is to make a meaningful change in the way that humanitarian assistance is implemented.

Movement towards a wider set of financing tools to tackle poverty, crisis and risk

Last year’s World Humanitarian Summit called for a shift “from delivering aid to ending need” to coherently address poverty, crisis and risk. The New Way of Working aims to bring humanitarian, development and peace-building approaches together, and to be supported by appropriate and well-resourced financing models. While a crisis-shaped blind spot still persists in some quarters, 2016 did bring fresh momentum to make the connections.

In particular, we saw a major drive from the World Bank, with a host of new investments and instruments. Its new Global Crisis Response Platform brings together crisis-related tools including refugee and pandemic financing facilities. Of the record US$75 billion announced in 2016’s International Development Association replenishment, almost a fifth will go to addressing fragility, conflict and violence.

This is important because an estimated 87% of all people living in extreme poverty are in countries that are either fragile, environmentally vulnerable or both. While humanitarian grants do play a vital and principled role, they are not the right tool to tackle the underlying risks, causes and long-term consequences of crisis that these ‘left behind’ populations face. This demands a much fuller toolkit, which we begin to map out in the GHA report – one which contains everything from insurance to contingency funding and long-term concessional loans.

Understanding these and other instruments, and tracking how much is going where and how, is crucial for effective, context-specific responses. So, as the minutiae of Grand Bargain commitments are negotiated, those who care about saving and improving lives also need to become adept at watching this bigger picture. We’ll certainly be watching it closely.

Photo: Natalia Tsoukala/ Caritas International, January 2016