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Disaster aid faces value-for-money test - survey

Source: Thomson Reuters Foundation - Thu, 26 Jan 2012 10:00 GMT
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This article is part of an AlertNet special report on humanitarian aid: futureofaid.trust.org

By Katie Nguyen and Megan Rowling   

LONDON, Jan 26 (AlertNet) - Picture this: a terrible drought forces you to abandon your meagre plot of farmland, so you migrate to a city where the jobs are, only to end up living in a slum regularly submerged by floods.   

It's a scenario that's going to become more and more familiar in coming years as climate change and rapid urbanisation play an ever-greater role in shaping humanitarian crises, according to an AlertNet poll of the world's biggest aid organisations.   

To adapt to the new reality, aid agencies will need to invest more in disaster prevention and learn a trick or two from the private sector about how to make more efficient use of limited resources, the survey of 41 relief organisations shows.

"The rising trend in the number of disasters over the past five years shows no sign of slowing down," said Gareth Owen, humanitarian director at Save the Children UK.   

"Year on year, we are responding more frequently and on a larger scale to increasing numbers of disasters."     

Asked to rank the factors most likely to intensify humanitarian needs, 28 of 41 aid agencies put the risk of more frequent and destructive climate-related floods, droughts and storms at the top.   

This was followed by mass displacement due to climate change and environmental damage, urbanisation, high and volatile food prices, and the expectation of more failing states.

With needs expected to grow and national budgets squeezed by the global financial crisis, some rich donor states are pressing the charities they fund to boost value for money in relief efforts.   

One way to do that is to slash the overheads, bureaucracy and transaction costs of U.N. agencies that often lead aid operations, many of those polled said.   

Other suggestions included investing in disaster-prone communities to make them more resilient and adopting the bottom-line approach of big business.   

"We need to increase competition and create an aid 'market', where donors don't need a budget breakdown but rather a set of outcomes they will pay for based on how many are achieved," said Francesco Paganini, director of disaster response for World Relief.   

Another U.S.-based agency echoed the need for a hard-nosed, performance-based approach.   

"If our industry could find a way to create a compensation system that provides personal financial reward for results -- as is found in for-profit businesses -- it could radically alter the approach to delivering value to beneficiaries," said one programme manager, who declined to be identified.   

The survey by AlertNet (www.trust.org/alertnet), a global humanitarian news service run by Thomson Reuters Foundation, targeted the world's biggest aid groups by spending and operational scope, excluding U.N. agencies.   

The agencies included Oxfam, Save the Children, CARE, Danish Refugee Council, Medecins Sans Frontieres, Muslim Aid and World Vision, as well as the global Red Cross movement.    

AlertNet asked experts to assess the future of humanitarian need, the challenges of delivering relief, spending and funding trends, and value for money in the international aid system.

IT HAS TO BE SEXY   

More than half the agencies said focusing more on disaster risk reduction (DRR) -- everything from building more durable houses and schools in safer places to teaching children to swim -- would help the sector cope better in the long run.

Experts have long argued that it makes more economic sense to pour money into helping local governments and communities minimise their exposure to disasters than mopping up afterwards.   

In its 2009 yearly "World Disasters Report", the International Federation of Red Cross and Red Crescent Societies (IFRC) said $1 spent on prevention saves $4 on emergency response.   

But rallying donor interest is hard, some aid groups said.   

"Funding for disaster risk reduction and disaster preparedness is not very 'sexy' for donors -- global, domestic and private," said Jouni Hemberg, director of international cooperation for FinnChurchAid.   

For many donors, installing a city drainage system or devising a programme to help coastal villagers cope with rising sea levels just doesn't sound as appealing as distributing food rations to 100,000 earthquake survivors or vaccinating 20,000 children in a refugee camp.   

Lack of donor interest in risk reduction was reflected in the poll. Of the 23 agencies that disclosed what proportion of their annual spending goes to this activity, 16 said it was 10 percent or less.   

However, 25 of the 41 said they planned to increase this kind of spending or would like to if the money could be found.

WHERE IS THE MONEY?   

In 2010, governments gave $12.4 billion in humanitarian aid, almost three times as much as private contributions, which amounted to $4.3 billion, according to estimates from Global Humanitarian Assistance, a British-based aid monitoring group.   

But 22 agencies forecast a drop in government funding for humanitarian aid over the next five years.

Of those, 10 expected private contributions would also decrease while 12 thought donations from individuals and companies would make up the shortfall.

The remaining 19 agencies predicted that governments would still provide the bulk of humanitarian funding as they do today.   

Asked about the main challenges to effective delivery of aid, many agencies cited the exploitation of aid for political ends, increasingly complex disasters, squeezed government budgets and violence against aid workers.   

Tackling these problems means raising public awareness about delivering aid according to the key humanitarian principles of neutrality and impartiality, and giving local communities more say in managing aid, some experts said.    

Others argued the sector should rely less on government donors, and seek longer-term, more flexible funding.   

But according to IFRC's Matthias Schmale, the best way to increase value for money was simple: "Provide more credible leadership through less marketing and spinning, and ensure actions match words."

(Editing by Tim Large and Sonya Hepinstall)

 

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