Flexibility in funding mechanisms to respond to shocks

Question

What lessons have been learned internationally about the use of crisis modifiers and other similar mechanisms which build flexibility into humanitarian or development funding arrangements in order to build in the ability to respond better/faster to new shocks (such as sudden-onset disasters, drought or spikes in conflict/displacement)? Is there any international best practice around these types of arrangements?

Summary

In order to better and more rapidly respond to shocks such as sudden onset disasters, there have been increasing efforts to build flexibility into humanitarian or development funding arrangements, as current emergency responses are often slow to arrive and/or unresponsive to forecasts of disasters (Start Network, 2017; Rüth et al, 2017, p. 2). This rapid reviews looks at examples of such flexible funding mechanisms and lessons learned. The evidence uncovered by this rapid review comes entirely from grey literature and is a mix of reports published by organisations implementing flexible funding mechanisms in their programmes and independent evaluations of these programmes. Often the focus of these reports has been the programme in general rather than the funding mechanism and any lessons learned from it. The rapid review did not find any collective international best practice in relation to these flexible funding arrangements.

Key findings

  • Flexible funding mechanisms can lead to timely responses, often preceding typical humanitarian projects (Catley et al, 2016; Levine et al, 2017; LaGuardia & Poole, 2016).
  • However if they are not triggered early enough they may have little impact (Levine et al, 2017; Venton, 2016).
  • Early funding has been critical for food and nutrition procurement, but is less effective for things like water supply, which require more time to set up (Venton, 2016).
  • Approval systems for some mechanisms can still take too long, while some bureaucratic systems for implementation can cause delays (NAO, 2016; Levine et al, 2017).
  • Prior systems and knowledge of the situation on the ground and experience working there can aid the speed of the response (O’Brien et al, 2016; Kleiman, 2013; Fitzgibbon, 2016; Mountfield, 2014).
  • The organisational capacity of implementing partners is important for the success of programmes funded by these mechanisms (Feinstein International Center & Charters, 2015).
  • Early response requires not only flexible funding but political will and technical systems of analysis as well (Venton & Sida, 2017).
  • Often the scale of resources the funding mechanisms offer is small relative to the needs in a major crisis and they may be more valuable in smaller, more localised events (Levine et al, 2017; Garnier, 2016).
  • The amount of available funding has often been too little and run out when there were subsequent shocks (Garnier, 2016; Levine et al, 2017; Catley et al, 2016).
  • Funding has sometimes been misused, for example to plug gaps in underfunded programmes (Catley et al, 2016; LaGuardia & Poole, 2016; Levine et al, 2017; DFID, 2015).
  • It is useful to have a pre-agreed trigger, based on timely and accurate data, and prior plan for action (Levine et al, 2017; Venton, 2016; Rüth et al, 2017b; Fitzgibbon, 2016; NAO, 2016; LaGuardia & Poole, 2016; Mountfield, 2014).
  • It is important that the programmes funded by these mechanisms are well designed, implemented efficiently, coordinated with other programmes and partners, and provide assistance to the point when they are no longer needed (Catley et al, 2016; Levine et al, 2017). Coordination with national authorities is important to ensure ownership and sustainability of some mechanisms (Rüth et al, 2017; O’Brien et al, 2016; Mountfield, 2014).
  • It is useful if the flexible funding mechanisms themselves are responsive and flexible during their implementation (DFID, 2015; Rüth et al, 2017; O’Brien et al, 2016).
  • In-built flexibility mechanisms in long term programmes could help forge stronger links between short-term crisis response and a broader long-term strategy (Levine et al, 2017).
  • It is still unclear how these financing mechanisms can best complement long-term disaster risk reduction investments and post-disaster response efforts (Stephens et al, 2015).

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Suggested citation

Rohwerder, B. (2017). Flexibility in funding mechanisms to respond to shocks (GSDRC Helpdesk Research Report 1412). Birmingham, UK: GSDRC, University of Birmingham.