27 January 2012

The Future of Foreign Aid Money

Reuters AlertNet is stepping up to provide more comprehensive coverage of humanitarian aid. Recently, they launched the 'Future of Aid' section that is filled with graphics, stories and videos about humanitarian aid. The present focus of the section is centered around aid spending.

In a survey of 41 relief agencies, AlertNet asked aid experts to weigh in on how money is spent and advise what ways the humanitarian sector can be improved. Based on the feedback,  AlertNet  came up with a list of ten ways that aid agencies can stay ahead.
1) Be better prepared for an increase in climate-related disasters
2) Devise new ways of operating in urban areas like city slums
3) Work more closely with local people to avert disasters and reduce their impact
4) Lobby governments to invest more in reducing the risk of disasters
5) Spread the word about why humanitarian aid must be provided impartially
6) Be more transparent about how aid is delivered, as well as its successes and failures
7) Train aid workers to be better leaders and learn from their mistakes
8) Cut red tape at the U.N. and improve coordination between U.N. agencies and NGOs
9) Operate more like a business, with a clear focus on results
10) Look for new sources of funding, including the private sector
When asked which factors are most likely to increase humanitarian need in the coming years, the respondents overwhelmingly pointed to climate-change related disasters. "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."

The agencies surveyed seem slightly optimistic, but largely think that many things will be the same in the coming years when asked about changes in funding and the role of the UN.  Advocating for disaster preparedness is not a new call from NGOs.  Evidence overwhelming points to it being more cost effective and the best way to mitigate large scale disaster.

The Horn of Africa is a prime example where Kenya and Ethiopia, who were focusing on drought preparedness in arid regions, were able to better handle the drought that southern Somalia.  The problem is getting donors behind the idea. "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.
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.
One casualty of the recent economic downturn has been the Global Fund. It came under fire after an internal audit found rampant graft among recipients. As a result, countries pulled funds and the Fund announced that it would not offer new grants in the coming year. The good news is that Gates announced he will inject $750 million to help keep the fund afloat.

Although the scandal contributed to the loss of funding, it also provided an out for donor countries with cash-strapped economies. Foreign aid is one of the first cuts suggested when money is tight and there are plenty of calls across the G20 to make those cuts a reality. In the United States, a budget proposed by the House Republicans included a complete cut of USAID.

As seen in the video below, the status quo is ill equipped to adequately address disaster relief. The cause is not due to lack of ability; the relief sector is excellent given the many constraints under which it operates.  Providing disaster relief is hard and complex. IFRC's Matthias Schmale, suggests that humanitarian organizations "Provide more credible leadership through less marketing and spinning, and ensure actions match words."

The survey respondents, seemed to agree with Matthias with calls for greater transparency. What individual and large donors can do is hold NGOs accountable. Additionally, large donors can cut down the burden of red tape and individuals can make donations that are not earmarked so that agencies can properly respond to the disasters that are not splashed across the front page of the New York Times.