Introduction

Humanitarian financing saves lives, supports human dignity and resilience, and helps to protect peace and development gains when disaster strikes. It is a fundamental global public good.

Saving and protecting lives is nothing short of a race against the clock, often surrounded by massive uncertainty and volatility. It is the reason why the current approach is to make humanitarian action as anticipatory as possible, and only as reactive as necessary. Harnessing and converting funding into aid looks different in 2023 from what it did ten years ago. Data, money and collective action converge at the right time to maximise impact and avert worse outcomes. When crises are predictable, funding can be pre-arranged.

Supporting preventative measures

For example, last year the Humanitarian Country Team in South Sudan responded six months earlier to mitigate expected extreme flooding affecting Bentiu for a fourth consecutive year.¹ Within hours of confirming rising risk levels, the UN Central Emergency Response Fund (CERF) and the South Sudan Humanitarian Fund (SSHF) released US$ 19 million in a complementary manner to help communities prepare and withstand the shock.² In Bentiu, an area of prevailing conflict, acting early meant more than 320,000 people – over a third of whom were already displaced – were protected against further displacement, loss of livelihoods, disease outbreaks and food insecurity.

The South Sudan Humanitarian Fund – one of 20 country- based pooled funds (CBPFs) led by Humanitarian Coordinators and managed by OCHA – allocated US$4 million to enable non-governmental organisations and UN agencies to reinforce dikes around vital access roads, displaced people’s homes, the airstrip and other infrastructure. At the same time, CERF, led by the UN Under-Secretary-General for Humanitarian Affairs and Emergency Relief Coordinator, released US$15 million to protect people’s homes, latrines and water wells from flood water. These interventions averted a public health emergency.

South Sudan demonstrates that even in protracted crisis settings, getting ahead of problems is not only possible but also the right moral and financial choice. The Inter-national Security and Development Centre conducted an independent impact evaluation of the early allocation in South Sudan. Researchers observed humanitarians on the ground were successful in adapting, coordinating and delivering anticipatory action. The evaluation also showed that rigorous research and learning can happen even in the most challenging places.

South Sudan is one of several places where the UN Office for the Coordination of Humanitarian Affairs has worked together with partners to get ahead of predictable shocks and their impacts using humanitarian pooled funds. These actions illustrate one of the critical ways in which humanitarian financing not only helps the system address the suffering we can see but also the suffering we can foresee.

Scaling up anticipatory action

There is a collective commitment by the humanitarian system to help scale up anticipatory action with more predictive analytics and pre-arranged funding, including through CERF and CBPFs. All members of the Inter-Agency Standing Committee – the UN system’s longest-standing and highest-level humanitarian coordination platform – are equally vested in integrating the anticipatory approach into the Humanitarian Programme Cycle.³

But crises are not the exclusive domain of humanitarians. Investments in timely humanitarian action, sustainable development, disaster risk reduction and resilience, climate adaptation and mitigation, as well as conflict prevention and peacebuilding, are mutually reinforcing.

We know all too well that today’s crisis landscape is a set of interconnected phenomena. According to the International Monetary Fund, the COVID-19 pandemic pushed an additional 70 million people into extreme poverty – for the first time in years, we are off-track to end extreme poverty by 2030. The cost-of-living crisis since the start of 2021 has undermined human rights and endangered lives across the world, as people struggle to pay for food, energy, and basic goods and services. Global economic challenges are compounded by the war in Ukraine, an international food crisis, and more frequent and severe climate shocks.

Complex crises and limited resources require ambitious collaboration, new tools and multidisciplinary approaches. There is no denying more money is critically needed to save millions of lives each year. Yet the fundamental question is whether we can manage crisis risk collectively, today and for future generations.

One of the best examples in this regard is the Early Warnings for All Initiative launched by UN Secretary-General António Guterres at the Conference of the Parties 27 (COP27). The initiative foresees targeted investments of US$ 3.1 billion on disaster risk knowledge, observations, forecasting, prepared ness and response, and the communication of early warnings, with everyone on Earth covered by an early warning system by the end of 2027. The Secretary-General has convened leaders of UN agencies, multilateral development

Part Two — The big picture: International flows banks, humanitarian organisations, civil society, insurance and information technology companies to inject the required political, technological and financial clout. He has also tasked the World Meteorological Organization and the UN Office for Disaster Risk Reduction (UNDRR) with leading a multi-agency coalition to fast-track action on the ground. Expanding coverage of early warnings will allow governments and international organisations to pre-arrange more financing and tie its release to earlier trigger points, ideally ahead of disasters.

Increased humanitarian funding needed

The stakes have never been higher. According to UNDRR, based on current trends the world is expected to face 560 disasters per year by 2030 – 154 more than in 2022. During the lifetime of the Sendai Framework for Disaster Risk Reduction (2015–2030), yearly disasters will have increased by 40%. Relative to gross domestic product, these disasters are expected to cost low-income and lower middle-income countries up to ten times more than it will cost high-income and upper middle-income countries.⁵ In the absence of immediate climate action, the number of people requiring humanitarian assistance and protection owing to climate-related disasters could increase to over 200 million by 2050, and related funding requirements for responses could increase to US$ 20 billion annually by 2030.⁶

The world is getting dangerously close to high levels of need that not long ago seemed distant and improbable. Financing and action cannot wait. The humanitarian response system is being tested to its limits. It is estimated that 339 million people – a number larger than the population of the United States – will need help to survive in 2023.⁷ The lives of one in 23 people hang in the balance due to hunger, displacement, disease, violence and climate change. Humanitarian agencies have targeted 230 million people in 69 countries and calculated US$ 51 billion is required to meet their needs.⁸ As in previous years, we can expect to mobilise half of the funding requirements.

During 2022, the humanitarian system received US$ 24 billion in funding – 47% of our goal. Though this fell far short of what was needed, humanitarians used the funding to reach 145.2 million people, or close to 80% of the target.⁹

The humanitarian system is increasingly delivering more value for money. For example, while the number of people in need has more than doubled in five years, funding requirements have increased by only one-and-a-half.

Conclusion

Pooled funds like CERF and CBPFs play an important role in all the efforts outlined above. As financing instruments and coordination tools, they enable partners to swiftly anticipate, respond and scale up by providing US$ 1.7 billion for principled risk-informed and needs-based programming.

Increasingly, humanitarian financing is more local. All Human-itarian Country Teams rely on the participation of local and national organisations, which receive more than a third of country-based pooled funding directly. The system is also nimbler. Cash assistance is preferred wherever possible. In 2022, more than 6 million people received US$ 1.7 billion in transfers. Moreover, it is more accountable to affected people. Humanitarian programmes prioritise the most vulnerable and capture the lived realities and expectations of the people we serve in order that they can meet disaster on their own terms, with the help they want, when they need it. Finally, and crucially, the system is more collaborative. It works in coordination and complementarity with development agencies, international financial institutions and governments across areas like disaster risk management, crisis risk financing, public health, social protection and peacebuilding. This is the direction we need to accelerate towards in order to save more lives with coordinated financing.