What’s in a name?
In the case of private funding, quite a lot. GHA’s latest report into the private funding of humanitarian assistance finds two key things:
- Private funding is playing an increasingly important role in international humanitarian assistance – at an estimated US$5.7 billion, it made up almost 30% of all humanitarian financing in 2011. So far, at least, it has proven to be a sustainable and reliable form of funding in the face of severe cuts to aid budgets by governments across the world caused by the global financial crisis;
- We know relatively little about it, in terms of how much there is overall, where it comes from, where it goes and how it’s spent.
Just over US$24 billion of private funding was raised for international humanitarian response between 2006 and 2011 – the equivalent of Cote d’Ivoire’s gross domestic product (GDP). In the past five years private funding has increased almost three-fold, from US$2.1 billion in 2006 to US$5.7 billion in 2011, peaking at US$6.3 billion in 2010 in response to the Haiti earthquake and Pakistan floods.
Total humanitarian assistance from governments and total private voluntary contributions, 2006–2011
Source: Development Initiatives based on OECD DAC and FTS data for humanitarian assistance from government donors and Development Initiatives’ own research for private funding
In 2006, UNHCR launched a strategy to increase its private income twenty times by 2018. Private funding is big business – and it’s getting bigger – and the humanitarian sector is becoming increasingly dependent on private money for responding to crises all over the world.
Yet, despite its rapidly growing volume and importance, there is still relatively little information available on private funding – on how much there is, where it comes from, or where it goes. The information that is available is dependent on what the donor (in the case of foundations and companies) or the recipient organisation (NGOs, the Red Cross and UN agencies) choose to make public. There is no standardised reporting of private funding and no responsibility on any of the actors involved to publish information about it, beyond including the total amount raised in financial reports.
Why does this matter?
However, it’s still only 30%; private money makes up the minority part of a much bigger pot of money being raised globally to respond to humanitarian crises. Governments, multilateral institutions, individuals, companies and foundations combined make up the majority of the pot and for that to be spent effectively, we need to be able to easily establish how much money there is in total and where it’s going. A better understanding of all resources available from all actors would strengthen the response to crises – if we knew the total value of the inputs, then we would be able to measure the outputs of humanitarian financing and action more effectively. Besides this, stakeholders – including individual donors and individual recipients of humanitarian assistance – are entitled to access information on where money goes, how much there is, and where it’s come from.
Better information through clear and transparent reporting of data on humanitarian financing can help improve decision making, efficiency and accountability. For relief efforts to be most effective, resources need to be well spent, and they must be allocated according to need. This requires a thorough understanding of what money is going where – so that we can best judge how much is needed, and make the best possible use of already-stretched resources. So for the money to have the greatest impact, we need clear, accessible reporting, in a manner that’s comparable to the reporting of government and institutional funding.
A dollar by any other name…
All of this leads us back to our original question of what’s in a name. Perhaps it’s unhelpful to refer to this sort of money as “private”; perhaps we ought to call it “independent funding” instead. After all, it’s not really private – the money comes largely from members of the public (75% of all private funding between 2007-2011 came from individuals), and goes towards helping members of the public. This isn’t a private transaction between a donor and a recipient – private money from individuals, trusts, foundations and corporations is spent by humanitarian relief agencies that are accountable to the public, whether that public is a recipient of food aid in a famine in Africa, or a person in the UK who donates £10/month to them. The money is, however, independent of governments and institutional donors, and is therefore independent of the politics, preferences and ring-fencing that public money can be subject to.
Private (or independent) funding, therefore, affords the recipient organisation and delivery agency far more autonomy when deciding where and how the money is spent. One of the main benefits of private funding reported to us by delivery agencies for this report was the fact that it could be spent on delivering much-needed assistance in areas that can often go overlooked by institutional funders (see “Key recipients” chapters for analysis on where private humanitarian assistance gets spent as compared with government and institutional humanitarian assistance).
Better information is a collective endeavour
In 2011, the Hewlett Foundation became the first foundation to report its development funding through the International Aid Transparency Initiative (IATI), and the Bill and Melinda Gates Foundation reports its funding to the OECD DAC alongside the world’s institutional donors. This is evidence that some actors are already taking steps to make information on their humanitarian funding more accessible, but the information that is currently available on private funding is far from complete.
GHA’s research into private funding always attracts a large amount of interest from a range of actors across the humanitarian and development sectors, in particular from funders and delivery agencies. It is clear from the level of demand we experience for this information that better and more reliable information is needed more widely on humanitarian financing.
GHA is working with key humanitarian stakeholders and reporting bodies – including IATI, UN OCHA FTS, institutional donors, private funders (foundations and corporations), UN delivery agencies and NGOs – towards achieving this. A workshop will be held later this year with a group of key stakeholders to consider how IATI can be made fit for purpose for humanitarian reporting of all funds – from both public and private sources.
We hope that, within in the next two years, data on all financing of humanitarian activities will be easily accessible from one central publicly accessible data source. We are inviting humanitarian assistance delivery agencies and private funding bodies to work with us and IATI in the production of next year’s private funding report. This will help develop an IATI-compliant reporting standard on humanitarian funding that meets everyone’s needs and which accurately reports data on private as well as institutional funds. If you are interested in hearing more about this or in getting involved, please contact firstname.lastname@example.org.
In the meantime, we hope you find this year’s report a useful and informative resource. We would like to thank those people from the following agencies who kindly gave their time to assist in the background research:
- Canadian Foodgrains Bank
- CARE International
- Concern Worldwide
- Danish Refugee Council
- Medecins Sans Frontieres
- Mercy Corps
- Norwegian Refugee Council
- Oxfam GB
- Oxfam International
- The United Nations High Commissioner for Refugees (UNHCR)
- The United Nations Children’s Fund (UNICEF)
- The United Nations Relief Works Agency for Palestine Refugees in the Near East (UNRWA)
- The United Nations World Food Programme (WFP)