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The Humanitarian Finance Forum is a global network of professionals working in humanitarian finance. We provide a platform for collaboration, learning, and advocacy. Contact us today to learn more about our work and how you can get involved.

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Humanitarian Finance Forum Contact Us | Connect with Us to Learn More

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Bringing together experts with AidEx participants to share public and private perspectives around the new and rapidly developing field of innovative finance, and to explore addressing funding needs for projects in LIC/FCSA settings.

AidEx 2023 - Innovative Finance Side Event

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Public service provision in fragile states often involve a complex network of external development agencies, NGOs, and domestic institutions. This session explore building effective partnerships in these high-risk areas.

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Social Outcomes Conference 2023

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The rise of COVID-19 has further exposed the fragility of the current humanitarian system. Simply put, traditional funding alone is not sufficient to address the number and scale of prolonged emergencies that the world is facing.
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In 1990 Overseas Development Aid (ODA) was the single major North-South resource flow. Despite the growth in ODA, which includes Official Humanitarian Assistance (OHA), it remains insufficient to address the world&rsquo;s humanitarian needs as issues become more complex, and protracted. Just 37% of UN appeals were funded in 2019 (pre-COVID).
In fact, ODA is now much smaller than Foreign Direct Investments (FDI), Remittance, and Private Capital (Debt and Equity) to Low- and Middle-Income countries (LMIC). This remains true even in the 20 countries receiving the most International Humanitarian Assistance (as observed by a Development Initiative's study) and where the Red Cross and Red Crescent typically operate. COVID-19 is only going to accelerate this trend, as ODA funding (especially as a function of GDP economic output), will decrease globally going forwards. In order to access these other greater sources of capital, funding and financing, the sector needs to adopt new Innovative Finance tools and approaches.
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Innovative Finance refers to a range of non-traditional mechanisms using private capital, repayable finance and risk transfer to support humanitarian &amp; development goals.
 It is vital to maximise limited funds to provide an effective response to tackle longer-term goals. There is much focus on innovating and improving our programs and interventions to maximise their impact. Equally, there is a responsibility to innovative and ensure our activities operate efficiently, transparently and with accountability. Traditionally, there has been less focus within the sector on how we innovate and improve resource mobilisation (which covers financial and non-financial support).
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This week the British Red Cross and the International Finance Facility for Immunisation (IFFIm) convened a virtual Roundtable on &ldquo;Innovation in Humanitarian Financing (IHF)&rdquo; to discuss and explore new tools and approaches in addition to traditional humanitarian funding.
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Our aim was to consider how we could contribute to, support and improve innovations in Humanitarian financing, through collaboration and networks based in London. At the meeting we heard from MBA students at London Business School who presented research to help us consider initiatives that will catalyse IHF globally. Over a ten-week consulting assignment, LBS conducted 13 industry expert interviews and synthesised industry reports before presenting to the representatives from more than 10 diverse groups and actors within the space including Gavi, World Bank, ODI, ECHO, DFID, Centre for Disaster Protection, International Finance Facility for Education (IFFEd), WSSCC, Volta Capital, Aon, Citibank and law firm McDermott Will &amp; Emery.
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Below are some key themes and learnings from the event.
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LBS identified a number of barriers that hinder the mobilisation of non-traditional sources of financing and private sector capital. This set the foundation for the group discussion to build upon with the key points as follows:
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1. Lack of investable opportunities which match the risk-reward appetite of private sector as well as the lack of a prior evidence base.
 2. Gaps in information and data on investment opportunities and precedent transactions due to the different nature of transactions across jurisdictions.
 3. The need for more collaboration between private sector and humanitarian actors, particularly in harnessing financial expertise for deal structuring.
 4. A prerequisite for organisational readiness to participate in innovative humanitarian financing, which is fundamentally required to drive the shift from reactivity to proactivity.
 5. Operational and political challenges in delivering humanitarian projects. While in agreement that C-Suite engagement and buy-in is important, sometimes the &ldquo;top-down&rdquo; approach needs to be complemented by a &ldquo;bottom-up approach&rdquo;, in scenarios where operational staff may be more inclined to adjust organisational practices than the most senior staff.
 LBS highlighted why it&rsquo;s important to consider the system involved in this innovative finance agenda across the sector including &ndash; (i) high-level coalitions, (ii) market infrastructure building actors, and (iii) technical experts / transaction teams. Through the presentation and subsequent group discussion, the following initiatives were suggested:
- Investment Opportunity Prioritisation Framework to ensure alignment between stakeholders, and to set narrowly focused and tangible targets
- Align with existing initiatives and positively influence other high-level coalitions such as the WEF&rsquo;s Humanitarian Investing Initiative
- Encourage and strengthen Market Infrastructure Building Actors, who have strong incentives for participating in Innovative Humanitarian Financing and a track record of commitment to the sector - Promote the strengthening of Technical Experts / Transaction Teams and leverage existing technical knowledge - Adopt a solution-based approach, where a humanitarian need is identified and fully defined before structuring a suitable solution, rather than trying to apply a readymade product to a problem.
 We took the opportunity to survey the attendees with an electronic poll, the results of which largely endorsed the above, where the top solutions to successfully grow IHF selected were; (1) to support humanitarian actors to develop capabilities; (2) to encourage private sector actors to provide more resources to IHF specialised teams and (3) to develop and/or showcase innovative financing models.
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Our Innovative Finance roundtable will now look to reflect on these findings and clearly define how they, in collaboration with partner organisations, can drive forward the case to innovate and improve resource mobilisation, engagement and synergies in order to address the growing humanitarian needs. We intend to these share plans and proposals with interested parties both for feedback and in the interest of transparency and accountability. Should you wish to learn more or participate in the initiative please do get in touch.

The rise of COVID-19 has further exposed the fragility of the current humanitarian system. Simply put, traditional funding alone is not sufficient to address the number and scale of prolonged emergencies that the world is facing.